How do Centrelink assess my foreign pension?
Age Pension for foreign applicants
Many Australians were born overseas or have lived and worked overseas for extensive periods. This can have important implications if and when the time comes to apply for the Age Pension.
Upon meeting the age requirement, applicants must also meet residency criteria to be eligible for the Age Pension. Centrelink generally require Age Pension applicants to have been an Australian resident for at least 10 years.
If you do not meet this requirement you may still be eligible for the Age Pension if you have lived and worked in a country Australia has a social security agreement with. Australia currently has 31 bilateral international social security agreements. Further details of these agreements can be found here. For example, Joe lived and worked in Canada for most of his life. He moved to Australia 5 years ago and became a resident. Whilst he doesn’t meet the initial 10 year residency requirement to be eligible for the Age Pension, his time in Canada, with which Australia has an agreement, contributes towards his eligibility.
In these circumstances, if applying for the Age Pension, Centrelink also require applicants to claim the equivalent pension in the foreign country they lived and worked – if they have not already.
Centrelink will generally have access to the appropriate paperwork to apply for the foreign pension and, if you are eligible, Centrelink will generally receive confirmation directly from the foreign body.
To determine the impact of your foreign pension, Centrelink will first calculate your maximum benefit without including your foreign pension. Once they have determined the maximum Age Pension you are eligible for, they will reduce your payment by whatever you are receiving from the foreign agreement pension.
For example, consider Joe who is single and in receipt of a $850 pf foreign agreement pension from Canada. When applying for the Age Pension, based on having very little other income or assets, Joe is assessed as being eligible for the maximum single Age Pension of $944.30 pf.
Given Joe also receives the Canadian Pension, Centrelink will reduce his Australian Age Pension payment dollar for dollar to $94.30 pf. In total he still receives the equivalent maximum Australian Age Pension rate which is partly made up of his Canadian Pension.
| Centrelink assessment – Maximum Age Pension payment | $944.30 |
| Less Foreign Agreement Pension from Canada | $850.00 |
| Age Pension payable by Centrelink | $94.30 |
These rules do not apply to all foreign pensions. You may be eligible for a foreign pension with which Australia does not have a social security agreement. These are known as Autonomous Foreign Pensions. These foreign pension payments are assessed as regular income when determining your rate of payment under the income test.
If you would like to understand your eligibility for Age Pension please call or email our office to have us assess your circumstances.
Photo by Ethan Wilkinson on Unsplash
Hello,
I have been looking for a clear explanation related to the situation of a foreign pension and an age pension in Australia which Australia does have a social security agreement. Very helpful article, thank you.
I receive a very small pension from Romania.(270$ AU a month) Does this count to my Australia age pension? thank you
Hi Lidia,
Australia do not have a financial agreement with Romania therefore your Romanian pension is assessed as income when determining your Age Pension payment.
All the best
Muirfield
I will receive a UK pension of approximately $600 a f/night. How will this affect my Australian pension?
Hi Rob,
UK pension payments count towards the income test. Without knowing your full financial background we cannot tell you the exact affect on your Age Pension payment.
Thanks
Muirfield
My ex partner lived in uk and now in aussy gets a aussy pension has no assets other than a Ute can he claim for the uk pension he did work in uk for roughly sixteen years
Hi Christine,
There is a chance your ex-partner may be eligible for a UK pension based on his work and residency status.
It’s worth contacting the relevant UK authority for more information.
All the best.
Muirfield
Hello, I get a partial New Zealand pension and a very small English pension Australia top up my pension to meet the full Australian pension as per the agreement, I have no other assets or income, my question is, is the English pension classed as income therefore being part of the $180 i am allowed to earn before anything is deducted thank you
Hi Annie,
The English pension is assessed dollar for dollar when determining your payment under the income test.
The income free area you refer to only applies to employment income.
Thanks for the question.
The Muirfield Team.
I have an Australian pension. Would I benefit from claiming a NZ pension as well?
Hi Sharelle,
Typically speaking, Centrelink will require you to apply for a foreign pension if they believe you are eligible.
If you do receive a New Zealand pension, your Centrelink Age Pension will reduce in a commensurate manner.
For example, if you are eligible for an Age Pension of $700pf and you receive $200pf from New Zealand, Centrelink will only pay $500pf.
I trust this answers your question.
All the best.
We are now resident in UK, Centrelink assess our uk pensions as income against our Australian pension.
My wife has just started receiving additional UK DWP Disability Attendance Allowance. Is this considered income by Centrelink and do I need to inform them or will the Gov bodies exchange the info?
Hi Norman,
The Government bodies do relay information, however, it can’t always be relied on.
I suggest contacting Centrelink yourself to avoid any unwanted debts.
All the best
Muirfield
Hello,
My understanding is that the UK doesn’t have an agreement with Australia anymore, so why would the UK pension be assessed dollar for dollar, rather than as income?
Regards,
David Brennan
Hi David,
Please refer to the bottom paragraph of the article which I believe answers your question.
As you noted, the UK does not have an agreement with Australia and a UK pension is assessed as income rather than dollar for dollar.
All the best.
The Muirfield Team
How would the reverse apply if my foreign (Finnish) pension is higher than the maximum Australian pension payable? How would Centrelink assess this and will I receive the higher amount regardless of living here in Australia?
Hi Trevor,
I this situation you would receive no Age Pension and continue to receive your full Finish Pension.
All the best
Muirfield
Hi, I will be 67 next year and will have reached retirement age. I emigrated to Australia in 1988 from the U.K. having worked there from age 16.
I plan to continue to work as a professional dog walker but will be reducing my workload to below the allowed amount each fortnight.
I own my own home with my partner and do not own any other properties.
What can I expect my pension to roughly be per fortnight?
Hi Steve, thanks for your enquiry.
Your eligibility for an Age Pension is based on a number of factors and we require much more information before we can make comment.
One of our advisers will happily help you determine your eligibility, and if needed, apply for the Age Pension.
Please call us on 03 5224 2700.
Hi my husband is 77 years of age and receives a US social security pension (currently approx $750 USD /$1134 AUD) per month. From February I reach pension age and will cease paid employment and we believe that we will both be eligible for the aged pension. Does Centrelink include the US pension when it calculates my husband’s income – and does this reduce the Centrelink pension dollar by dollar as the UK pension does?
Hi Shirley, thanks for the question.
Australia does have a social security agreement with the US meaning they share the responsibility in paying a retirement/old age pension.
As a result, your husbands US pension will count towards the income test dollar for dollar as you pointed out.
We can offer you assistance in determining your eligibility and applying for the Age Pension.
Please call our office on 03 5224 2700.
Take care.
Hi I am 71 years of age and my Wife is 69 years of age, we are paid a full Australian Aged Pension, we have been residents since 1986(and Australian Citizens since 1994) i believe we therefore have an Autonomous Australian Aged Pension. We applied for the UK pension as required by Centrelink. My wife did not qualify which we new she would not as she had worked full time less than 10 years in the UK. My paperwork has been completed and we are waiting to find out the amount to be paid, UK pension have also confirmed that it will be backdated to 2017. Am i right in assuming that the UK pension will be classed as income and therefore any amount above the ordinary income free area will be deducted by multiplying the excess by 0.5 if single or in our case by 0.25 as a couple
Hi David, you are correct. Because Australia no longer has a social security agreement with the UK, all foreign pension income is assessed as ordinary income.
All the best.
Muirfield
Hello Muirfield,
I’m a single age pensioner with my own home and assets that exclude my home of value less then 2OOk. I receive Polish age pension, and my Australian age pension got reduced by $50 a fortnight. I was under the assumption if I keep my assets under 300k and other annual incomes under 11K I would be still eligie for full Australian pension. Are there any options I can take in my circumstances to recive full Australian age pension.
Hi Mark, with the limited information you provided we cannot make comment about your eligibility for the full Age Pension.
I suggest you call our office on 03 5224 2700 and we can help you out.
All the best.
The Muirfield Team
Hi
I have just been informed I will receive the uk state pension of $325 pw how much will it reduce my Australia pension.
Hi Nicholas, unfortunately we cannot answer a question specific to your situation without knowing your full background.
It is best you seek advice from a suitably qualified adviser to understand the impact.
All the best
Hi I have just been approved for a partial French pension. Because Australia has no social agreement with France, am I right in assuming that this French pension will fall under income earned?
Hi Jeanne, you are correct in saying your French pension will fall under income earned.
If you need help calculating the impact it may have on your Australian Age Pension, please reach out to our office on 03 5224 2700.
I have lived in Australia for almost 30 years now, and I will be eligible for the SSS pension in the Philippines. Will my pension in Australia be deducted once I claim my pension overseas?
Hi Carna, your Philippines may have an impact on your Australian payment.
It depends on the size of your overseas payment and your financial standing in Australia.
Hi I am an Australian citizen, living in Australia. I’m entitled to a German pension. How does this affect my Aussie Age Pension? Is it dollar fo dollar?
Hi Robin, thanks for the question. Each country has a slightly different agreement with Australia.
The Department of Social Security have created a great resource for Age Pension applicants also receiving a German Penion.
Click on the following link for more information.
https://www.dss.gov.au/about-the-department/international/international-social-security-agreements/current-international-social-security-agreements/australia-and-germany-frequently-asked-questions
All the best,
The Muirfield Team
I am an Australian pensioner. I am trying to get my SSS pension (equivalent to Australian Super pension) from the Philippines. Will that affect my Australian pension? This is an updated comment.
Thank you
Chrissie
Hi Maria, thanks for the question.
It is our understanding the Australia does not have a social security agreement with Philippines. These are known as Autonomous Foreign Pensions. These foreign pension payments are assessed as regular income when determining your rate of payment under the income test. We cannot make a judgement whether it will impact your Australian Pension without knowing your full circumstances.
If you would like to discuss this matter further, please call our office on 03 5224 2700.