The answer is simple, Yes and No.
Without being too obtuse, you cannot apply for and be granted an Australian Age Pension if you are not in the country at the time you apply.
However, if you already have an age pension, then by all means feel free to move to Ecuador, Portugal, Greece, or any other country that floats your boat. You will still get your pension, with a few caveats.
Myths and misinformation abound about the subject of the Australian Age Pension and overseas travel and lifestyle, so we wanted to clarify a few things in this blog.
Applying for Age Pension
To be eligible for Age Pension, you must be over 67, be an Australian resident and have lived in Australia for at least 10 years. (some exceptions apply with countries that have a Social Security agreement with Australia) Of course there is also an income and assets test which is variable depending on homeowner and couple/single status.
Given the backlogs that are common with Centrelink (Services Australia) it is worth knowing that you can lodge a claim up to 13 weeks before you turn 67. This can ensure that you start getting payments as soon as you are eligible.
You must be in Australia on the day your claim is lodged. This is important. If you complete your forms a few days before flying out of the country, you can expect problems. We don’t have a definition of ‘the day your claim is lodged’. Information from Centrelink has been conflicting on this issue. So it may be worth taking the delays into account. If you send paperwork and Centrelink don’t start processing it for two months, you might find the ‘day’ is the day they start putting it into the system. Lodging online may be a better option for certainty in this regard.
On the Age Pension – Leaving Australia for an extended period
This is where the misinformation abounds. We often hear concerns that people don’t want to leave Australia for more than 6 weeks out of fear of losing their pension.
Six weeks is an important period, but it only affects your Pension Supplement and Energy Supplement. If you are out and back within 6 weeks, nothing changes. After 6 weeks, your Pension Supplement will drop to the basic rate ($45.80 p.f.) from the maximum rate of $120.80 (for a couple)
Also, the Energy Supplement will stop. For an age pensioner couple, that means a loss of $10.60 p.f. each.
So all up, the loss for a couple will be $96.20 per fortnight if leaving the country for longer than 6 weeks. This reduces the current maximum age pension from $1,653.40 to $1,557.20.
On the Age Pension – leaving permanently
You have done the research, know the visa requirements, and spent weeks researching 1€ houses in Italy. Now, what about your income? How will a permanent, or longer than six months departure affect your ongoing Centrelink age pension?
As mentioned before, you will not get the Energy Supplement, and will only get the ‘basic’ rate of Pension Supplement.
However, you will still get your Australian Age pension.
The main issue is for people who have been a resident of Australia for less than 35 years.
For those people, the rate will be their years of residence divided by 35. So, if you have only lived in Australia for 15 years, but now decide to live overseas, then your pension rate will be 15/35 = 42.8% of the full pension rates.
For lifetime Australian residents however, there is no problem.
The full rate of pension for a couple living outside Australia is $40,487.20 per annum. This is only $2,501 less than the rate paid if you were in Australia. The payments are made every four weeks though, instead of fortnightly. So don’t stress if the payment doesn’t hit your bank account on the same day as before. Enjoy your $2.00 set menu lunch at your favourite Ecuadorean cantina, and don’t worry, be happy! (That was for you Bernie!)
Very interesting