While the Australian Government is prepared to provide a pension to retirees in Australia, they can’t just hand money out haphazardly to everyone of pension age. There are specific residency requirements that you must meet to be eligible to receive the Age Pension. These requirements exist to ensure the social security system isn’t taken advantage of and helps the taxpayers’ dollar to go further when supporting retirees.
What are the Age Pension residency requirements?
Simply living in Australia doesn’t mean you’ll necessarily tick all of the boxes. Firstly, you need to be an Australian resident to qualify for the pension. Services Australia classifies you as being an Australian resident if you reside in Australia and have permission to stay permanently because you are either:
- an Australian citizen
- a permanent resident visa holder
- a protected special category visa holder (this is a visa granted to New Zealand citizens who arrived in Australia before 2001).
If you’ve checked off the Australian residency requirement, you must also meet at least one of the following criteria to qualify for the Age Pension:
- you have been an Australian resident for at least ten years — at least five of those years must have been consecutive.
- you have been a female Australian resident for the past two years, and you are the widow of an Australian resident.
- you were receiving an Australian widow’s pension or allowance (or a partner allowance) immediately before reaching your pension eligibility age. If you are in this situation, you can simply apply to transfer to the Age Pension once you reach the eligibility age.
If you have moved to Australia later in life, keep in mind that the ten-year period doesn’t count until you’ve been granted permanent residency. For example, if you’ve been living in Australia without permanent residency status, this period does not count toward the ten-year requirement. You must live in Australia for ten years after becoming a permanent resident to meet the residency requirements.
Living in Norfolk Island and Lord Howe Island are considered as living in Australia.
Are there any exceptions to the residency requirements?
Yes. It is possible to get around the ten-year residency requirement if you have lived in countries that Australia has an international social security agreement with. The years spent in those countries may count towards the ten-year Australian residency requirement. For example, Australia and New Zealand have an agreement that New Zealand citizens who are Australian residents can receive an Australian Age Pension, provided that they also meet the age eligibility requirement and they pass both the income and assets tests. Basically, if you are from New Zealand and move to Australia to live, you may be eligible for the Age Pension without living here for ten years.
It is also possible for refugees to qualify without meeting the residency requirements. This means they can flee their country and receive the Age Pension as long as they meet all of the other eligibility requirements.
Can you claim the Australian Age Pension if you live overseas?
Yes, but there are a few factors that affect your pension amount. Your amount may change depending on how long you’re away from Australia, whether your income and asset levels change while you’re away, and whether you receive your pension through an international social security agreement that Australia has with another country — for example, if you receive your pension through New Zealand’s social security system, the pension amount you receive may vary depending on the details of the specific agreement.
If you are leaving Australia temporarily for a short holiday or any period less than six weeks, there will be no change to your pension. However, if you’ll be away for longer than six weeks, whether you’re going on an extended trip or planning to move overseas permanently, then you must contact the Services Australia to let them know. Being outside of Australia for more than six weeks will see your Pension Supplement drop to the basic rate, and your Energy Supplement will stop until you return.
You will still receive the Age Pension if you leave Australia for more than 26 weeks, but the amount you’ll receive will depend on a calculation based on how long you were an Australian resident between the ages of 16 and the date you reached your pension age. The amount generally won’t change if you were an Australian resident for 35 years or more. If you were an Australian resident for a shorter period, your pension payment would be proportionally reduced. For example, if you were an Australian resident for 20 years, your amount will be calculated as 20/35ths (57%) of the amount you would normally receive. 35 years is the qualifying length of time needed to receive the full amount. 20 years is 57% of the time required, so you would receive 57% of your usual pension amount.
For anyone who has lived outside Australia since 1 July 2014, the residency requirement is 25 years rather than 35. However, if you were to return to Australia for more than 26 weeks, the 35 years would apply if you were to leave Australia again.
Will I continue receiving the Age Pension the whole time I’m living overseas?
If you are aged over 80, to continue receiving the Age Pension, you must provide a Proof of Life certificate every two years to an Australian embassy in the country you are residing. If you do not lodge this certificate, your pension could be suspended or even cancelled.
If you are under 80 years, you will simply continue to automatically receive your Age Pension during your time overseas.
When applying for the Age Pension, there is a range of eligibility criteria that must be met. In addition to residency requirements, you must be of pension age and pass the income and assets tests. You can still be eligible to claim an Australian Age Pension if you move overseas, provided you satisfy specific conditions. You must inform Services Australia if you’re receiving the Age Pension and you move overseas for longer than six weeks, as this could have an impact on your entitlements.
The information in this article is general in nature.