Retiring Overseas? A Guide to the Australian Age Pension Abroad

Many Australian retirees are drawn to the idea of travelling or living overseas, seeking new experiences or a lower cost of living. But a common question holds many back: what happens to your Australian Age Pension when you leave the country?

Will your payment rate be reduced, or could it stop entirely? This guide will break down everything you need to know about how the Australian Age Pension works while you are overseas.

How Your Pension Changes Based on Your Time Away

How your pension is affected ultimately comes down to how long you plan to be overseas.

Trips of Less Than 6 Weeks

This one is simple: nothing changes. If you are just going on a short holiday, you don't need to notify Centrelink or Services Australia. Your payments will continue as normal.

Absences of 6 to 26 Weeks

If you are away for more than six weeks, some changes will kick in. You must tell Services Australia about your travel plans.

• Your basic pension rate will not change.
• After six weeks, your Pension Supplement will drop to the basic rate, and your Energy Supplement will stop completely.
• Your Pensioner Concession Card will be cancelled after six weeks.

The reduction in supplements can add up to $68.40 per fortnight for singles and $25.70 per fortnight for each member of a couple. When you return to Australia, your supplements and concession card will be restored.

The 26+ Week Rule: Understanding Your "Working Life Residence"

If you plan to be overseas for more than 26 weeks, the rules become more complex. Your pension rate will depend on two key factors: the nature of your absence (are you travelling temporarily or moving permanently?) and your Australian Working Life Residence (AWLR).

Your AWLR is the total time you lived in Australia as a resident for social security purposes between the ages of 16 and Age Pension age, as defined by the Social Security Guide. Despite the name, you do not have to have been working during this time; it simply refers to the years you have lived here.

• If you have 35 years or more of AWLR: Your basic pension rate will not change, even if you are moving overseas permanently.
• If you have less than 35 years of AWLR:
  • If you are just travelling temporarily, your basic pension rate will remain the same for the first 26 weeks. After that, your rate will become proportional. For example, if you have 25 years of AWLR, you will receive 25/35ths of your usual rate.
  • If you are moving permanently, the proportional rate applies as soon as you leave Australia.

Regardless of your AWLR, your supplements will still be reduced, and your concession card will be cancelled as described above.

It's important to notify Centrelink if you plan to be away for more than six weeks, as the reason for your absence affects when these reductions take place.

Applying for the Pension While Living Overseas

What if you're already living overseas and want to apply for the Australian Age Pension?

If You're in a Country with No Social Security Agreement

In this case, you must return to Australia to apply for the pension. Once your claim is granted, the two-year portability rule applies.

This rule is specifically for former residents returning to claim the pension. It means you must remain in Australia for two years after you resume residency before your pension is considered "portable" and can be taken overseas. As noted in the portability rules, if you leave within those two years, your pension will stop, and you will have to reapply when you return. This rule is in place to discourage people from briefly returning just to claim the pension and then leaving again.

The Exception: International Social Security Agreements

The rules can work differently if you live in a country that has a social security agreement with Australia. Australia has agreements with over 30 countries, including New Zealand, the UK, the USA, and many nations across Europe.

In many cases, the two-year portability rule does not apply under these agreements, and you might even be able to apply for the Age Pension while still living in that country. Each agreement has its own unique terms, so it's important to check the specifics for your situation.

How Overseas Pension Payments are Made

If you are eligible to receive your pension while overseas, payments are handled in one of two ways:

• If you are away for less than 12 months: You will continue to be paid every two weeks into your Australian bank account.
• If you are away for more than 12 months: Centrelink will pay you every four weeks into either your Australian or an overseas bank account, in the local currency or US dollars.