Australian aged pension, new rules for portability payments (whilst living/travelling overseas)

[halloween]

2 hours ago, hellofagal said:

Unfortunately none of the comments seem to clarify portability of the aged pension! My husband has resided in Australia for the past 2 years. He is still working but will want to claim the aged pension when he retires next year. I cannot claim the pension unless I return to Australia for 2 years. What is unclear is this; Does my husband qualify to receive the pension and leave permanently or does he have to reside in Australia for two years after he receives the pension? He meets the requirements of residency but the two year requirement is confusing.   

If he had been resident for the last 2 years, his pension is immediately portable when he qualifies for OAP.

[4MyEgo]

3 hours ago, halloween said:

If he had been resident for the last 2 years, his pension is immediately portable when he qualifies for OAP.

 

Hold up there !!!!

 

Only if he can satisfy Centrelink that he intends to reside in Australia and not piss off with the OAP, once he is approved, he can skip and go live overseas, he will only lose some benefits.

[4MyEgo]

4 hours ago, halloween said:

If he had been resident for the last 2 years, his pension is immediately portable when he qualifies for OAP.

 

Only if he can satisfy Centrelink that he intends to reside in Australia and not piss off with the OAP, once he is approved, he can skip and go live overseas, he will only lose some benefits.

 

Having made the above reply, I am assuming he returned to Australia to get the OAP and has not been living in Australia for more than 2 years, because anyone that has been living in Australia and reaches the OAP as far as I understand, can up and go with only the benefits being lost, unless someone can lead me to a site that says otherwise.

Edited September 4, 2016 by 4MyEgo

[halloween]

On 04/09/2016 at 7:34 PM, 4MyEgo said:

 

Only if he can satisfy Centrelink that he intends to reside in Australia and not piss off with the OAP, once he is approved, he can skip and go live overseas, he will only lose some benefits.

 

Having made the above reply, I am assuming he returned to Australia to get the OAP and has not been living in Australia for more than 2 years, because anyone that has been living in Australia and reaches the OAP as far as I understand, can up and go with only the benefits being lost, unless someone can lead me to a site that says otherwise.

 

AFAIK, you can leave once your OAP is approved, but it will stop if outside Oz for more than 6 months per year, unless portability has been granted.

BTW NZ pensioners do not get portability, and the 6 month rule applies. Will this come to Oz?

Edited September 9, 2016 by halloween

[4MyEgo]

5 minutes ago, halloween said:

 

AFAIK, you can leave once your OAP is approved, but it will stop if outside Oz for more than 6 months per year, unless portability has been granted.

BTW NZ citizens do not get portability, and the 6 month rule applies.

 

Its not all that bad based on the facts below:

Age Pension rate after 26 weeks

After 26 weeks your rate will be based on how long you have lived in Australia as anAustralian resident between the age of 16 and age pension age.

You will usually need to have lived in Australia as an Australian resident for 35 years to get a full means tested rate of Age Pension after 26 weeks overseas. If you have lived in Australia for less than 35 years, you will generally get a proportional rate.

For example, if you lived in Australia for 10 years between the age of 16 and age pension age, you will generally receive 10/35ths of the full means tested rate.

If you were receiving Age Pension, or another Australian social security pension, outside Australia on 1 July 2014 and you have not returned and stayed in Australia for 26 weeks or more, you will usually need to have lived in Australia for 25 years to get your full means tested rate.

Link for your convenience:

 

https://www.humanservices.gov.au/customer/enablers/age-pension-while-travelling-outside-australia

[halloween]

9 minutes ago, 4MyEgo said:

 

Its not all that bad based on the facts below:

Age Pension rate after 26 weeks

After 26 weeks your rate will be based on how long you have lived in Australia as anAustralian resident between the age of 16 and age pension age.

You will usually need to have lived in Australia as an Australian resident for 35 years to get a full means tested rate of Age Pension after 26 weeks overseas. If you have lived in Australia for less than 35 years, you will generally get a proportional rate.

For example, if you lived in Australia for 10 years between the age of 16 and age pension age, you will generally receive 10/35ths of the full means tested rate.

If you were receiving Age Pension, or another Australian social security pension, outside Australia on 1 July 2014 and you have not returned and stayed in Australia for 26 weeks or more, you will usually need to have lived in Australia for 25 years to get your full means tested rate.

Link for your convenience:

 

https://www.humanservices.gov.au/customer/enablers/age-pension-while-travelling-outside-australia

I am using Centrelink's own rule, that an OAP can be out of the country for up to 6 months, to maintain residence status while living here nearly 6 months per year. While in Oz, I work (as an ATO ruled resident), maintain the same address, telephone number and bank a/c, have a Medicare card, registered to vote, own a registered vehicle, and even a few club memberships.

Have been doing this for 3 years with 18 months to go before OAP. I intend to claim portability but NOT declare that I am living o/s, as I may be returning and even working for shorter periods. Let them sort that lot out.

[4MyEgo]

8 hours ago, halloween said:

I am using Centrelink's own rule, that an OAP can be out of the country for up to 6 months, to maintain residence status while living here nearly 6 months per year. While in Oz, I work (as an ATO ruled resident), maintain the same address, telephone number and bank a/c, have a Medicare card, registered to vote, own a registered vehicle, and even a few club memberships.

Have been doing this for 3 years with 18 months to go before OAP. I intend to claim portability but NOT declare that I am living o/s, as I may be returning and even working for shorter periods. Let them sort that lot out.

 

So what you are saying is that you are maintaining residency so that you can get the OAP and once you have it, take off overseas, without the need to go back and forth for 6 months at a time, I can appreciate that, and it will work for you, good on you !

 

Me on the other hand at 56 years of age see no benefit for me to remain a resident for tax purposes, and to travel back and forth to hold out for the crumbs that they would give me at age 67, that is if they don't change the rules further again and wipe it altogether for non residents, besides the cost to return and stay for 2 years will take a hell of a lot of time to re-coupe that money from the pension Vs the outlay. 

 

Each to their own, the way I see it, having become a recent non resident, and accepted the fact that the Australian government has screwed me over on my right to get the OAP unless I return for 2 years prior and go through all of the bullshit to get it, noting that some will disagree that I am not entitled to it, yatta yatta yatta.

 

I have broken it right down and accept the fact that for the financial year that I exited Australia, the tax threshold is reduced from $18,200 to $15,437 on a pro-rata bases, e.g. I worked for 5 months prior to departing, so I am entitled to the pro-rata threshold, (they got that right), then I will pay a flat rate of tax of 32.5 cents up to $80,000, then 37 cents up to $180,000, what this means is that I miss out on paying 19 cent from the prorated threshold up to $37,000, after that, its the same for residents and non residence, e.g. 32.5 cents up to $80,000, then 37 cents up to $180,000, the difference being about $4,350 because I don't pay the medicare levy surcharge of 2% as a non resident, but I lose out on any medicare entitlement if I become ill, and when I do my tax return, (soon) the medicare levy surcharge would have worked out to be over $2,000, so as I am not paying that, the money can go towards private cover over here.

 

I also don't get to vote, and I don't have to do tax returns anymore, because the money I have back in Australia is in bank term deposits for the next 12 months anyway and, (10% withholding tax on the interest) is taken out by the banks and forwarded to the ATO and the shares I have are not subject to any capital gains tax with the dividends (fully franked) tax already taken out.

 

I suppose I could have continued to work another 10 or so years and built up a further little nest egg, but having done the math, serious math, to live and work in Sydney to reach the OAP, it just isn't feasible and in lieu of the next 10 years of working, I think the decision I made to live here, to have a stress free life and an affordable one will pay off.

 

What I am trying to say is that non residency Vs residency isn't that bad after all, but if you have property back in Australia it is more than likely that you will be subject to capital gains tax from the day you leave and pay 32.5 cents for every $ earned, however there is a 6 year rule which may or may not come into play, so one should seek a good accountants advice.

 

 

Edited September 9, 2016 by 4MyEgo

[manfredtillmann]

On 5/14/2016 at 7:38 PM, halloween said:

Doing something similar, going back and working 6 months of each (financial ) year - make sure you have minimum 183 days in country. This makes you a tax resident with normal tax rules. If less than 183 days, 33% on every dollar earned.

I make sure medicare, voter registration, etc, all up to date. Even have a few club memberships.

interesting concept. i earn all my retirement income from oz rental property. so, i do pay taxes, land rates, insurances every month or quarterly through my BAS.

do you really think that will make difference?

 

[4MyEgo]

17 minutes ago, manfredtillmann said:

interesting concept. i earn all my retirement income from oz rental property. so, i do pay taxes, land rates, insurances every month or quarterly through my BAS.

do you really think that will make difference?

 

 

IMO having done the math and recently sold my place, you are better off letting your residency go, if you are in a position not needing to work, you can invest the proceeds from the sale of your property into bank term deposits, currently 3% for 12 months, although make you sure no more than $250,000 in one bank, because the government only guarantees $250,000 per bank, and if the banks fails as they did in the USA in 2008 GFC your up the creek so to speak, so spread the money into 2, 3, 4 or more banks and they say the interest rates will drop, I think the other way (hope), you only pay 10% withholding tax on the interest paid and the banks will take it out and forward it to the ATO, just make sure you give them your overseas address, then you have blue chip shares, for example CBA they are currently paying 5.6% on their fully franked (tax paid) dividends, but remember shares fluctuate, up and down, but if you don't need the $'s for a while, sit on the shares and sell when they are up if you want to trade, or just leave them there.

 

When you do let go and become a non resident, you can get a prorated threshold, an example is if you worked for 6 months in the financial year, you will get around $16,000 of the $18,200 threshold, after that its a straight 32.5 in the $, you only miss out on paying 19c per $ from the threshold up to $37,000, after that its the same for either residents or non residents and when you realise you don't pay the 2% medicare levy surcharge, its not that bad overall, and it balances out over the next few years, because you don't have to lodge tax returns or pay tax on any capital gains made from shares, and of course unless you are working outside of Australia you will have to lodge tax returns and pay taxes.

Edited September 9, 2016 by 4MyEgo

[louse1953]

On 4/13/2016 at 4:47 PM, shirtless said:

Well you guys should be happy you get a pension most Aussies now have to rely solely on Super.

55,if you are relying on Super Shirtless you'd have a few bob stashed away.

[louse1953]

On 9/4/2016 at 9:34 AM, hellofagal said:

Unfortunately none of the comments seem to clarify portability of the aged pension! My husband has resided in Australia for the past 2 years. He is still working but will want to claim the aged pension when he retires next year. I cannot claim the pension unless I return to Australia for 2 years. What is unclear is this; Does my husband qualify to receive the pension and leave permanently or does he have to reside in Australia for two years after he receives the pension? He meets the requirements of residency but the two year requirement is confusing.   

He is a resident of Aust. by the simple fact that he was there between 63 and 65 and will get portability straight away.I have to come back and re establish my residency.I can do this between 63 and half and 65 and half or as i choose 65 and half to 67 and half.

[louse1953]

On 5/14/2016 at 7:38 PM, halloween said:

Doing something similar, going back and working 6 months of each (financial ) year - make sure you have minimum 183 days in country. This makes you a tax resident with normal tax rules. If less than 183 days, 33% on every dollar earned.

I make sure medicare, voter registration, etc, all up to date. Even have a few club memberships.

I don't think that is correct.That was my former thinking but there is more than one way to skin a cat.You have to self declare you are a non resident.You are not moving os permanently.Do not declare your self a non resident as my former tax did.My new agent is claiming back the wrongly collected money.

[watcharacters]

On 4/10/2016 at 7:14 AM, Inquisitorial said:

Attached in the link to the govt web site

https://www.humanservices.gov.au/customer/enablers/age-pension-while-travelling-outside-australia

 

I don't generally agree with the usage of "nanny state" as TVF members express it but in this instance I have to wholly go along with it.

 

Seeing this annoyed me even though it doesn't apply to me:

 

"You need to tell us you’re leaving Australia if you:

• are going to live in another country
• "will be away for more than 6 weeks"
• get payments under a social security agreement with another country
• came back to live in Australia within the last 2 years and started getting Age Pension since then"

I hope that attitude isn't contagious for other countries.

 

T0 add: It's the requirement of having to tell the government  about leaving for longer than 6 weeks that I find offensive.  If a government wants to know such things it can find out by checking the arrival and exit of a person's passport.

Edited April 27, 2018 by watcharacters

[Expatthailover]

On 13/04/2016 at 5:47 PM, shirtless said:

Well you guys should be happy you get a pension most Aussies now have to rely solely on Super.

Utter rubbish. Most aussies do not have to rely on super.

Maybe in 20 years but right now...

[David Walden]

On 4/10/2016 at 7:30 AM, bdenner said:

OK, that is a better explanation and I now hear what you are saying. The old age pensioners reward for busting his/her guts their working life is an extra 2 years confinement within Australian boarders no matter their situation when applying! = Pricks - TTF I'm a self funded retiree.

Not quite so.  You may have to ensure that you are resident in Aus and are just out of Aus for an extended holiday, perhaps 3 or 4 times during the 2 years period.  If you live in W A a return ticket to Aus can be as low as $300 a bit more over east.  The information about living overseas  implies you can do this without Centrleink spelling it out all in concrete detail.  They have left a few holes.

 

I do make regular trips back to Aus but I am well past the age when this a problem.  When I return the pension supplement gets restored so you gain about $180. (half the air fare) I usually see my doctor once or twice.  Go back with a $1000 worth of scrips from the chemist (almost FREE).  Catch up with the daughters and grand kids.  If living in Thailand for medium length periods and being put off with some of those Thai silly (no)driving and  rules a trip back home is a blessing.  Yes they do have driving rules ...opps recommendation rules, no one takes any notice of them.

 

For older people living in Aus it can just boring.  Not much to do.  I could fill 3 pages about the contacts I've made in Thailand.  I make sure I say home in my room at least 2 nights a week to recover from Monday Club,  The Tuesday free curry after into the night gathering,  Wednesday night the market 2 hundred farangs social night out and a few? drinks and German sausages etc  Thursday night I try not to be sociable and look forward to some rest, but the bloody phone rings a bit and I sometimes I fail.  Friday night AFL or other footy,  I limit myself to 4 beers. Saturday and/or Sunday watch  2 games of AFL usually with a dozen or more other blokes at the Red Lion Hotel ( owned by an Aussie, I help him with his profits).  Sunday usually a sensible party around town which I am under pressure to attend...Sunday night I go to church to see if I can be forgiven.  Hard to find any Western Churches in Thailand.  But the Pink Lady at the Western Bar forgives me my sins, I need to be forgiven for my sins from time to time (no never).

 

After a few months of this back to Aus for some well earned boring rest and recharge my batteries and lots of BS with my 6 grandsons (no girls)  and see the doc again...and start all over again.  He says I'm gunna live another 15 years.  I've told him I'm gunna sue him if he wrong. he says "OK"....I know this all sounds like BS but never a truer word spoken...go get it is your for the asking.

[David Walden]

On 4/27/2018 at 4:49 PM, Expatthailover said:

Utter rubbish. Most aussies do not have to rely on super.

Maybe in 20 years but right now...

If you have contributed to the Australian compulsory super levee over the last 25/30 years and are single you are likely to have about $100,000 in a retirement fund ( could be more). If you down load 6 or 7% only of this each year, after 65.5 years when you get the pension you will get about $1040 p/f including rent assistance plus your download of about $260 p/f  (or a bit more if needed) to a total of $1280 p/f.  You can live quite comfortable with this money even in Aus.  Unfortunately you will loose the rent assistance if not in Aus and the "Pension Supplement".  If living in Thailand this loss will bring you back to about $1100 p/f.  Still an OK amount to live well in Thailand.  You can get a very nice Condo room for about $350 per month including power and water as I do,  34 sq/m furnished 13th floor overlooking Cha-am beach, a/c, small kitchen, ensuite.  And $1100 p/f after rent. This is a very handsome amount to live on in Thailand. That leaves you with $2100 p/m. 

Edited May 22, 2018 by David Walden

[David Walden]

On 11/5/2016 at 2:48 PM, louse1953 said:

I don't think that is correct.That was my former thinking but there is more than one way to skin a cat.You have to self declare you are a non resident.You are not moving os permanently.Do not declare your self a non resident as my former tax did.My new agent is claiming back the wrongly collected money.

You all appears to be discussing the tax requirements for those who retire well below the retirement age.  When you get to 65 y/o and retire taxation requirements are different (long story).  There is nothing I can see on the Australian taxation web site that says  "if you live overseas on the pension you will be taxed at 1/3 rd of all your income and I've been looking for years, never seen it...so where does it say that?....anyone????...please give me a link.