Understanding permanent residency rules to receive an Australian Age Pension—Part 2

Portrait of cheerful senior woman with gardening tools outdoors. Older woman standing with shovel in her backyard garden

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The Australian Social Security system ensures that citizens have the financial resources for at least a frugal, minimal standard of living when they’re unable to earn an income from work.

And there’s a willingness to support Australians too old to work or who have reached the Age Pension age and who may have no other income or limited income. However, Australian taxpayers are unwilling to support former Australian residents who choose to live elsewhere.

In this, the second, and final, post about the Australian Age Pension and residency, the focus is on checks that applicants are really part of the Australian community.

Currently living permanently in Australia

The final step in the residency test is to demonstrate that you’re actually living in Australia permanently when you apply for an Age Pension.

If you live in a home you own, you can show Centrelink your last municipal council rates notice as a proof of ownership. You can add to your rates notice, a driver’s license issued to you at that address and your last Income Tax Assessment showing that same address. Centrelink could accept from that evidence that you really are here permanently.

But what if you have been working overseas and have just returned to retire in Australia? If you own a home in Australia, you would be expected to be living in your own home by the time you apply for an Age Pension. You could show Centrelink that the electricity bill is in your name to prove you have moved back into your home.

If you have come home to Australia permanently, but do not own a house you will need to prove that you are renting a house with a signed lease for at least six months. Retrieving your furniture, household items and other personal items from commercial storage is also evidence that you mean to stay long term.

Be aware that if you leave Australia within two years of retiring, Centrelink could cancel your Age Pension.

Centrelink doesn’t accept short-term accommodation arrangements as evidence that you’re living in Australia permanently. For instance, staying with family, backpacker-style accommodation, or short-term rentals are unacceptable.

Similarly, maintaining a home overseas and arriving in Australia with just a suitcase is unlikely to convince Centrelink that you’re here permanently.

Living permanently in a country that has a Social Security Agreement with Australia 

Australian residents now living in another country that has a Social Security Agreement with Australia might be allowed to apply for an Age Pension while living permanently in that country.

Periods of permanent residency in the other country might also count for Australian Social Security residence. But you must have lived in Australia as a permanent resident for some time when you were aged between 16 years and your Age Pension Age.

You can only claim an Age Pension while living overseas if the country where you live has a reciprocal Social Security Agreement in force at the time you apply for an Australian Age Pension.

In March 2018, Australia had Social Security agreements in force with India, some economically developed countries around the Pacific Rim and many European countries. But the agreement with the United Kingdom (UK) ended on March 1, 2001.

Christine Hopper is the Director of Financial Care Services, an independent financial advisor.

Financial Care Services is focused on mature people considering a change of lifestyle including retirement and particularly new living arrangements in: retirement lifestyle community villages; granny flats; supported or assisted living; and Commonwealth regulated aged care. She can be contacted through https://financialcareservices.com.au.

Christine talks to Centrelink as a customer receiving a Carers Allowance and on behalf of clients. She understands the range of Department of Veteran Affairs and Centrelink income support benefits, their relevant means tests and eligibility conditions. She’s an actuary who also holds a Bachelor of Science, a Diploma of Financial Planning and a Certificate of Theology.

Category: Finances

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