Can I Take My Age Pension Overseas?

According to new figures released by the Australian Bureau of Statistics, residents are leaving Australia at record levels—almost 85,000 people departed Australia in the final three months of last year.

Many Australians are choosing a lower-cost, more exciting retirement overseas but there’s a lot of uncertainty as to whether Baby Boomers can go with their Age Pension intact. And it can be difficult to get the answers all in the one spot.

So, let’s clear the air on this.

“You can take your age pension overseas indefinitely,” says Janet Nisted, International Living AustraliaEditor. “It will not be cut off unless there is a change in your circumstances (such as a change in your income and/or assets) that disqualifies you for the pension. Same as if you were in Australia.”

However, there are some things you need to be aware of.

“After six weeks overseas, your Age Pension will switch to the ‘outside Australia rate’,” Janet notes.

“All this means is that your Pension Supplement stops. The Pension Supplement is a combined payment of Pharmaceutical Allowance, Utilities Allowance, GST Supplement and Telephone Allowance. If you receive the Energy Supplement, that will stop also.

“The Pension Supplement is around $80 per fortnight for a couple and is designed to help Age Pensioners living in Australia cope with the high cost of these services. So fair enough that you don’t continue to get the Supplement if you’re not living in Australia. Although, keep in mind that in many low-cost retirement destinations overseas you can pay your utilities, phone and pharmaceuticals with your spare change.”

The Australian Working Life Residency rule or AWLR, is another one to note. If you’ve lived most of your life in Australia, the AWLR will probably not affect you. If, however, you migrated to Australia during your adult life or spent a substantial proportion of your adult life overseas, a move overseas may mean that your Age Pension amount is reduced after you’ve been gone for 26 weeks.

Here’s how it works.

“The AWLR measures the number of years you’ve lived in Australia between the ages of 16 and 65,” says Janet. “Note that you do not have to have worked any or all of this time; simply living in Australia is enough. If you have 35 years or more living in Australia between the ages of 16 and 65, you are entitled to the full amount of Age Pension as determined by the income and asset tests.

“And if you haven’t, then after 26 weeks overseas, your pension amount will be proportional to the number of years of your working life you lived in Australia. For example, if you have, say 20 years of Working Life Residency, then you’ll be entitled to 20/35ths of your current Age Pension after 26 weeks.”

So, the good news is that Australian Age Pensioners can go overseas for 26 weeks and still receive their regular Age Pension (less the Supplement as discussed above). And the majority of Aussie pensioners can stay overseas indefinitely and continue receiving their current Age Pension into either an Australian bank account or foreign bank account.

Who knows when and if the rules will change—but for now, the going is good.

But before you pack your bag, make sure to understand the current rules as they apply to your own situation. Seek financial advice from an independent qualified financial advisor and take advantage of the free information services offered by Centrelink.

Once that’s handled the only question left is, “Where to?”

Read more in a special report by International Living Australia on the Age Pension Overseas, here:What You Need to Know About Taking Your Age Pension Overseas