International social security agreements and how they impact your pension

international social security agreements and their impact on the Australian pension

Governments seek to share the burden of social security support for people who have lived and worked in more than one country via the use of International Social Security Agreements.  Whether you are retiring overseas or in Australia, the International Social Security Agreements will determine your entitlement to an Australian and foreign pension.

What countries does Australia have an International Social Security Agreement with?

At the time of writing, Australia had entered into 30 international social security agreements. These countries are :

  • Austria
  • Belgium
  • Canada
  • Chile
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Finland
  • Germany
  • Greece
  • Hungary
  • India
  • Ireland
  • Italy
  • Japan
  • Korea
  • Latvia
  • The former Yugoslav Republic of Macedonia
  • Malta
  • The Netherlands
  • New Zealand
  • Norway
  • Poland
  • Portugal
  • Slovak Republic
  • Slovenia
  • Spain
  • Switzerland
  • United States of America
  • Details of each of these agreements can be found at Centrelink here.

    What is the purpose of International Social Security Agreements?

    International social security agreements share the burden of social security between two countries for people who may have lived in both countries.  The agreements help people to ascertain their entitlements to social security benefits in each country, and for some people this may mean entitlement to a part pension in two or more countries.

    The scope of the agreements varies between countries, but all cover the aged pension, and some will cover other social security payments such as disability support pensions, and carer payments

    How do the agreements impact your Australian pension?

    If you are moving between two countries, these agreements can ensure you maintain access to foreign and Australian pension payments.  The Agreement may :

    • enable you to submit a claim for your pension in either country
    • ensure continuity of pension payment when moving between two countries
    • enable you to meet minimum requirements to qualify for a pension in either country
    • override usual pension payment restrictions based on your citizenship or country of residence

    Application of the international social security agreements will usually mean :

    • each country will pay you a part pension
    • foreign pension amounts are usually proportional to the length of time you lived in that country or contributed to the social insurance of that country
    • if you are living outside Australia in your retirement then your Australian pension will usually be reduced proportionately to the time you spent working overseas
    • if you are living in Australia during your retirement, then your pension entitlement will be reduced by the amount you receive as a foreign pension

     

    The laws around access and entitlement to social security benefits are constantly changing.  For more information please refer to our article Can I access an Australian pension if retiring overseas?  Please refer to Centrelink’s website for the latest information.

    Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way.  We may receive referral commissions from companies referred in this article.

    About the author

    Craig

    Craig is an Australian Expat and the founder of The Australian Expat Investor. Craig is passionate about investing, and while Craig cannot give personal financial or tax advice, Craig enjoys sharing investing, tax, and other tips for Australian expats to help them to build their wealth while living abroad and get the most out of their time living overseas. Get his free ebook on 9 Financial Surprises That Could Cost Australian Expats Thousands of Dollars

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