Foreign pensions

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This page explains what foreign pensions are, the requirement to lodge a claim for any foreign pension to which you may be entitled, how they are assessed, and your obligations in relation to foreign pensions.

The rates on this page are effective from 1 July 2024.

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What is a foreign pension?

A ‘foreign pension’ is a payment that is:

  • available from a foreign country
  • similar to a Service Pension, Income Support Supplement or a Social Security Age Pension.

If you have lived and worked in another country, or have made contributions to a social security system or superannuation scheme in another country, you may be entitled to receive a foreign pension.

These pensions are known as ‘comparable foreign pensions’.

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Requirement to apply for any foreign pension owing to you

Anyone claiming or in receipt of a Service Pension, Income Support Supplement or Social Security Age Pension is required to also claim any foreign pensions to which they may be entitled. If you have a partner who is eligible for foreign pension, they are also required to claim any foreign pension to which they may be entitled, even if they are not claiming or in receipt of a pension in Australia themselves.

This is to ensure that pensioners maximise their income by claiming any entitlements they may have from an overseas social security system or superannuation scheme.

Eligibility for any foreign pension depends on the requirements of the particular country, such as length of residency or employment. Although we may be able to advise you in general terms about the eligibility requirements, we cannot decide whether you are eligible.

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Agreement countries

Australia has agreements with a number of countries to share responsibility for social security coverage. These countries are known as ‘agreement countries’. For example, Australia has an agreement with New Zealand to share responsibility for social security coverage.

A claim for a comparable foreign pension with an ‘agreement country’ can be lodged with and processed by Centrelink. For any other country, a claim for a comparable foreign pension must be lodged directly with the country involved.

Claim forms for pensions from the agreement countries are available from Centrelink offices. Centrelink will ensure that you have completed the appropriate forms and provided the necessary documents for the claim, and will lodge the claim with the agreement country on your behalf.

For more information about these pensions contact Centrelink International Services.

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Other countries which pay foreign pensions

There are a number of countries that will pay pensions to former residents now living in Australia that do not have an international social security agreement with the Australian Government. These are referred to as non-agreement countries.

To claim a pension from a non-agreement country you need to write a letter to the relevant authority in that country. You should include as much information as possible about your working life in that country.

Contact details for the relevant authority in non-agreement countries are available through Centrelink International Services.

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Travelling overseas

If you are travelling to a country where you may have an entitlement to claim a foreign pension, you are required to make a claim for that foreign pension while you are in the paying country. If you have previously applied and your claim was declined because of location restrictions, you are also required to apply while you are in the paying country.

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Exemptions from claiming a foreign pension

You are not required to claim a foreign pension if there is a risk of danger to you or your family, for example, if you are a former refugee.

Also, if a country is in a state of civil war, or is politically or economically unstable, you do not have to apply. This is because your claim would have little chance of being processed.

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What if you are granted a foreign pension?

The country you are claiming a pension from will advise you directly if you have been granted a pension. They will also advise you of the payment details. If you are granted a foreign pension, and you receive a income support pension from DVA, you need to tell us within 14 days (28 days if you live overseas or receive remote area allowance) of receiving advice that you have been granted an overseas pension.

You need to provide evidence of the kind of payment granted, the amount (in the currency of the country granting the payment) and how often the payment is made. If the relevant document is not in English, it should be accompanied by a translation by an appropriately qualified translator.

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Foreign pensions counted as income

Foreign pensions (except foreign war disability compensation pensions) are counted as income in the assessment of your income support pension. If you receive a lump sum payment representing a period of retrospective foreign pension entitlement, your Australian pension will be reassessed over that period which may result in an overpayment.

Foreign war disability compensation pensions are not counted as income in the assessment of Service Pension. However, they are counted as income in the assessment of Income Support Supplement and Social Security Age Pension paid under the Social Security Act 1991.

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How are foreign pensions assessed for Social Security Age Pension?

The assessment of foreign pensions for Social Security Age Pension purposes differs, depending on whether the Age Pension received by you is an ‘autonomous’ or an ‘agreement’ pension.

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How are foreign pensions assessed for an autonomous Age Pension?

An autonomous Social Security Age Pension means that the age pensioner meets the required residency criteria.

Foreign pensions received by a person paid an autonomous Social Security Age Pension, are assessed under the ordinary income test. This means that a foreign pension, converted to Australian dollars, reduces your income support pension by 50 cents for every $1 of comparable foreign pension received that is over the income free area. For more information about how income is assessed refer to the Income test.

Pensions received from New Zealand are always treated like agreement pensions (see next section).

Example 1: John is a single Social Security Age pensioner who receives a foreign pension of $312.00 per fortnight. They are paid an autonomous Age Pension, have no other income, and their assets are below the assets value limit.

The daily amount of Social Security Age Pension that John will receive is calculated as follows:

1. Total income (foreign pension) $312.00
2. Less ordinary income free area-$212.00
Total excess=$100.00
3. Multiply by 0.50x0.50
Total amount to be deducted=$50.00
   
Maximum rate of pension $1,116.30
4. Less total amount to be deducted-$50.00
 =$1,066.30
5. Divide by 14÷14
Daily entitlement rounded to 4 decimal places $76.16
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How are foreign pensions assessed for an agreement Age Pension?

An agreement Social Security Age Pension means that the Age Pension is paid under an international agreement, because the person does not meet the relevant residency criteria.

The assessment of a foreign pension received by a person paid an agreement pension varies, and depends on which country is making the payments.

Foreign pensions received by agreement pensioners in Australia reduce Social Security Age Pension by a dollar for every dollar of foreign pension received before the income and assets tests are applied.

Example 2: John is a single agreement age pensioner in Australia, who receives a foreign pension of $200 per fortnight from Portugal. John has no other income, and his assets are below the assets value limit.

The amount of Social Security Age Pension that John will receive is calculated as follows:

Maximum singles rate$1,116.30
less foreign pension$200.00
Equals: Amount of fortnightly pension$916.30

For more information about assessment of foreign pensions from these countries contact Centrelink International Services.

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Exchange rates for British income

DVA monitors the market exchange rate for pounds sterling so you dont have to tell us about exchange rate variations. 

The exchange rate used during the monitoring period is the ‘On Demand Air Mail Buying Rate’ as supplied by the Commonwealth Bank. This rate has been used to convert pounds sterling to Australian dollars since the passage of the Social Security and Veterans' Affairs Legislation Amendment Act (No.4) in 1989. If the exchange rate varies by plus or minus 2.5%, that new rate will be reflected in your next pension instalment.

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Exchange rates for other currencies

The exchange rates used to convert the current gross rate of other foreign currencies into Australian dollars are the ‘telegraphic transfer buying rates’ as supplied by the Commonwealth Bank. For infrequently traded currencies not available from the Commonwealth Bank, an appropriate exchange rate is obtained from foreign currency sites on the internet.

Exchange rates are updated on the Friday prior to the DVA payday for all currencies.

Updated exchange rates are applied:

  • in March and September each year
  • when you ask for a re-assessment
  • when you notify a change for any foreign pension
  • when you notify a change for any managed investment or share.

While we update the exchange rate, the actual foreign currency amount of the pension or annuity is only updated when you notify of a change in the amountpaid to you.

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Failure to apply for a foreign pension

If you or your partner do not apply for a foreign pension for which you might be eligible, DVA can decline your claim for an income support pension. If you are already being paid an income support pension, you and your partner may be required to apply for a foreign pension. If either of you do not do so within a reasonable time, your income support pension may be suspended or cancelled.

If you or your partner are eligible for a foreign pension and refuse it, we may consider you are depriving yourself of income you are entitled to receive and count the amount as income for pension purposes. For more information refer to Giving Away Income or Assets.

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Overseas Annuities

Overseas annuities are assessed under the ordinary income and assets test. Because they are not subject to Australian prudential regulation, overseas annuities are not subject to the income streams rules. They are assessed in the same way as private annuities. That is, the gross amount of income is taken into account under the ordinary income test. For asset test purposes, overseas annuities or income stream type products are assessed in a similar way as Australia products that do not comply with the income stream rules.

If you establish an overseas annuity, and you or your partner receive an income support pension, you would need to tell us within 14 days (28 days if you live overseas or receive remote area allowance).

You would need to provide a copy of the contract outlining the purchase price, commencement date, term and payment rate (in the currency of the country granting the payment). If the relevant document is not in English, it should be accompanied by a translation by an appropriately qualified translator.

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Obligations

When you are granted an income support pension, and periodically after that, you will be notified of your obligations. You will be required to tell us within 14 days (28 days if you live overseas or receive remote area allowance) of changes to your circumstances that might affect the rate of income support pension you receive or your eligibility to receive that pension. These obligations apply equally to trustees.

In relation to your foreign pension, you need to tell us within 14 days (28 days if you live overseas or receive remote area allowance) of receiving advice that you have been granted a foreign pension, or if the amount of your payment has varied. You do not need to tell us of changes to the exchange rate.

Usually an overpayment of pension will not occur when you have met your obligations. However, sometimes even if you have met your obligations, an overpayment can occur because we have not been able to process the change before the next payday. We do our best to avoid this occurring, but it is not always possible. To provide you with your exact entitlement we are obliged to recover overpayments of pension where they do occur.

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