Change to the working residence requirements for pensioners going overseas

Change to the working residence requirements for pensioners going overseas
Compliant financial advice

 

From 1 January 2014, age pensioners and certain other pensioners with unlimited portability who wish to remain overseas for longer than 26 weeks must have been an Australian resident, and worked in in Australia for at least 35 years to ensure that their pension does not decrease. The current requirement is 25 years.

It’s interesting to note that to actually get the age pension in Australia one only need have been a resident for 10 years – not 25 years. This will come about as the Social Security Amendments Bill seeks to amend the Social Security (International Agreements) Act 1999 (Cth).

The change will also apply to all pensioners paid under social security agreements outside Australia, except those with Greece and New Zealand due to the specific terms of those agreements.

Pensioners who are living overseas immediately before 1 January 2014 will continue to be paid under the current 25-year rule, unless they return to Australia for longer than 26 weeks and leave again, when the new rules will start to apply to their pension calculation.

The Bill also seeks to change the working life rule so that partnered pensioners will be assessed under their own residency rather than their partner’s working residency if their partner’s residency satisfies the 25 year rule. These changes are proposed to commence from 1 January 2014.

Brett Evans is the Managing Director and a Financial Planner with Atlas Wealth Management which is the first financial services firm in Australia to specialise in providing financial advice to Australian expatriates. With over 20 years of experience in the finance and investments industry, Brett has worked for blue chip companies which include the Australian Stock Exchange (ASX), HSBC, Suncorp and Citi Smith Barney.

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