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Age Pension and Travel Overseas

Age Pension and Travel Overseas

Age Pension and Travel Overseas

Now that Covid is no longer such a thread, international borders have opened, all airlines are just waiting for you to jump on the plane and cruises boats are awaiting new passengers, many retirees start thinking, how long can I actually be overseas and still continue receiving my Age Pension.

As anything to do with the Centrelink office, there are strict rules how travelling overseas may affect your payment, of Age Pension or Service Pension received from the DVA office (Department of Veteran’s Affairs), so it only makes sense to understand those rules before you jump on the plane or the cruise liner to enjoy your long-overdue overseas holiday.

So today, we are NOT talking about leaving Australia for good in order to live overseas, You can read about living overseas: “Retirement and Living Overseas” and “Retirement overseas and Age Pension

Today, we are talking about the situation when you are leaving Australia to go overseas maybe for trip of a lifetime, travel from one country to another, from one continent to another, to fly, to sail, to hike, to bike, whatever takes your fancy, this would be my dream overseas holiday travel.

But maybe you have a family overseas, for example your kids left Australia to pursue an incredible professional career in another country, of maybe you were born overseas, and you’ve always wanted to re-visit the country of your heritage, get to know its people and the culture.

Whatever the reason for your long overseas travel is, it pays to understand the rules if you are a recipient of any government retirement income, whether it is Age Pension or Service Pension or any other government benefit.

“You don’t choose the day you enter the world and you don’t choose the day you leave.  
It’s what you do in between that makes all the difference.”
 
Anita Septimus

I love this quote and you can apply it to anything you do in your life.

So now, let’s jump into our today’s topic: “How long can I travel overseas before it affects my Age Pension?”

1. Travel overseas for less than 6 weeks

If your plan is to be away from Australia for less than 6 weeks at the time, your Age Pension will not be changed and you will enjoy the full payment you are eligible for, as if you were in Australia all the time.

2. Travel overseas for more than 6 weeks but less than 12 months

If you stay outside of Australia longer than 6 weeks, the government will remove your payment of Pension Supplement and you will be receiving the basic rate. Also, the Energy Supplement will stop. Both of those payments will be reinstated on your return to Australia.

So as you can see, unlike the common believe, you can be overseas for quite some time and still enjoy your government pension payments going to your bank account every fortnight.

Things change however, if you are outside of Australia for a period longer than 12 months

3. Travel overseas for longer than 12 months (26 fortnights) 

If you wish to stay overseas for longer than 26 fortnights, your eligibility to continue your Age Pension payments will depend on how long you were an Australian resident between the age of 16 and Age Pension age. If you are unsure what Age Pension age means, read Age Pension explained where you will understand all the basic requirement of Age Pension eligibility.

So let’s discuss the Australian residency rules.

As mentioned above, your residency is based on your length of your “Australian Working Life Residency” and it is set at 35 years. Despite its name, it is not a requirement for you to be working all those 35 years.

If your Australian Working Life Residency is 35 years or longer, you can spend overseas longer than 26 weeks and your basic Age Pension rate will continue with no disruption. The only change could be that your payments might be made to the bank account every 4 weeks, rather than a fortnight, and you might be receiving payments in the local currency or US dollar, depending on the country you are in and the agreement between Australia and that country.

If you’ve lived in Australia for less than 35 years, then your Age Pension payment rate will be proportional, based on number of years of your residency in Australia.

So to make it clear, let’s look at some examples of pensioners receiving full Age Pension payments:

  • John is a single pensioner and has been living in Australia for 50 years. He is now 72 years old and wants to visit his daughter who moved to UK, married there and has the family and a successful career. Because John’s Australian Working Life Residency is longer than 35 years, after 26 weeks of stay in UK, his Age Pension will continue at the full basic Age Pension rate of $22,937pa.
  • Stefano is also single and in a similar situation having all his children in Italy, but he’s only been an Australia resident for 20 years. Therefore after 26 weeks in Italy, Stefano’s Age Pension will be reduced proportionally, down to $13,107pa.

Those calculations are correct based on the full basic Age Pension payment of $22,937 in April 2022

4. What happens to my Pensioner Concession card while I am overseas? 

If you leave Australia to live overseas, then your Pensioner concession card will be cancelled immediately upon your departure from Australia.

If however you leave Australia for a prolonged holiday, your Pensioner Concession Card will stay valid up to 6 weeks, after which time will be cancelled. However, it will be reissued to you once back in Australia.

If you don’t know the benefits of that card, see: “Pensioner Concession Card

5. Commonwealth Seniors Health Card

This card will also be cancelled if you are outside of Australia for longer than 19 weeks. When you return, just contact Centrelink, advise of your income level and as long as you continue to be within the income limit, your card will be reinstated. If you don’t know income limits and benefits of Commonwealth Seniors Health Card, check: “Centrelink concession Cards for your Retirement

6. What to do before you leave Australia?

It is recommended that you either:

  • register for a Centrelink online account via myGov or
  • provide a nomination to a third party to act on your behalf, this could be a member of your family or your financial planner. Keep in mind that not all financial planning offices provide such support, my practice does, but due to many changes that our government introduced to financial planning, and some of them are dreadfully unfair and virtually killing this profession, many older and very experienced financial planners left the industry, leaving many retirees with no support and advice, as younger generation is not equipped with knowledge or experience to deal with issues retirees face.
  • Also, don’t forget to update Centrelink of your income and assets before you leave to ensure that your payment is not delayed.

7. What to do on your return to Australia?

Generally you don’t need to contact Centrelink on your return to Australia, unless:

  • your payment was stopped while you were overseas and it hasn’t restored automatically
  • you were required to provide reason for the travel and you have not provided those details

Travel overseas can be a great fun, but my sincere recommendation is:

  • make sure that you have provided all details Centrelink requested of you to ensure you Age Pension payments will not stop.
  • ensure that you have sufficient cash backup in your bank account.
  • never, ever travel overseas without the Travel Insurance. In most cases people think about covering your luggage, or your camera and other personal items,. As important and dear to your heart those items could be, it is the medical cover and assistance that should be the most important, as well as cover of your cards and all your travel documents.

“Retirement is a Journey, not a Destination, so be well prepared for the Ride”

 

 

By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement

 

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