How overseas travel impacts Age Pension payments
For many of our clients, retirement opens the door to a new kind of freedom, the opportunity to travel more, stay longer, and fully immerse themselves in the places they’ve always wanted to experience.
As you plan your next trip, it’s worth taking a moment to consider how being overseas may impact your Age Pension. In many cases, you can continue receiving your payments while you’re outside Australia. However, the amount you receive can be affected by how long you’re away, any changes to your income or assets, and whether your entitlements are linked to a social security agreement with another country.
How long you plan to be away is the key consideration that determines whether you need to advise Services Australia of your travel plans, and how those plans may impact your pension payments.
Less than six weeks:
In most cases, short trips of less than six weeks won’t affect your Age Pension payments. However, depending on your circumstances, you may still need to notify Services Australia. As a guide, you’ll generally need to let them know if your trip extends beyond six weeks or if your situation changes before or during your travel.
More than six weeks:
If you plan to be away for more than six weeks, or are moving overseas, your payments may change. After six weeks, your Pension Supplement is reduced to the basic rate and your Energy Supplement generally stops. Your ongoing payments will continue at what’s known as the “outside Australia” rate.
More than 26 weeks:
If you plan to be away for longer, your Age Pension rate will depend on how long you were an Australian resident between age 16 and the age you qualified for the Age Pension.
If you were an Australian resident for 35 years or more, your rate will generally remain unchanged. If you were a resident for less than 35 years, your payment may be reduced proportionally.
In some cases, special rules may apply. For example, if you were already living overseas and receiving an Australian payment on 1 July 2014, and had at least 25 years of Australian residency, your rate may not be reduced under the current rules.
Your Age Pension continues to be assessed under the income and assets tests while you are overseas, so your rate may also change if your financial situation changes.
Exceptions to look out for:
- If you come back to live in Australia from another country and start getting the Age Pension, your payment stops if you go overseas during the next two years
- This rule also applies if you received payments under a social security agreement with another country while outside Australia.
- If you leave Australia temporarily but stay an Australian resident, this normally counts as part of the two years.
- If you go to a country where Australia has a social security agreement, you may still get the Age Pension during the two years.
Key takeaways
- While short trips often won’t affect your payments, it’s important to let Services Australia know if your circumstances are more complex, such as working overseas, travelling under a social security agreement, or if your personal situation changes.
- Information about when you leave and return to the country is generally shared across government, including Services Australia (Centrelink).
- You can use your Centrelink online account, visit your nearest Centrelink centre or call the older Australians line on 132 300 to share your plans to travel or live overseas.
Deciding to travel for a long period is an important financial decision that requires careful planning. Speak to your FMD adviser if you have any questions about how overseas travel may impact your finances.
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General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977. Rev Invest Pty Ltd is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977.