Imagine you want to retire in a beautiful place like Bali or the historic streets of Europe. It’s a dream come true for many Australians. But, before you pack your bags, let’s talk about how retiring overseas can affect your age pension.
In this blog post, we’re going to explain what happens to your age pension when you decide to spend your retirement years in another country.
Can you get the Age Pension entitlements overseas?
In simple terms, yes, you can still get the Age Pension even if you move overseas for good. However, the amount you receive and the rules you must follow depend on how long you’ve lived in Australia and how long you plan to be abroad.
How long you’ve lived in Australia matters
The main thing that affects your pension when you’re overseas is how long you’ve been a resident in Australia. To keep getting the Age Pension while you’re abroad, here’s what you need:
- You must have been living in Australia for at least 10 years in total.
- Or, you need to have been an Australian resident for at least five years in a row during your working life (from age 16 to the age when you can get the Age Pension).
How long you stay overseas and your pension
The length of your stay in another country affects how much Age Pension you’ll get:
- If you’re on a short trip (up to 6 weeks), your pension stays the same.
- For longer trips or if you move permanently: If you’ve lived in Australia for over 35 years, you’ll receive the full Age Pension. But if you’ve been an Australian resident for 10 to 35 years, your pension will be a bit less. For example, if you’ve lived in Australia for 20 years, you’ll get 20/35ths of the full Age Pension.
Remember the assets and income test
Even when you’re in another country, the assets and income test still matters. This test can change how much pension you get. So, keep Centrelink updated about changes in your situation, like exchange rates, assets in foreign countries, and pensions from overseas.
Waiting period after moving
If you move overseas and stay there for more than 26 weeks, your pension amount will depend on how long you lived in Australia. When you return to Australia, there’s a two-year waiting period to get back the previous Age Pension rate you had while living in Australia. This waiting time only applies if you’ve been overseas for more than 26 weeks.
Tell Centrelink and stay informed
Always let Centrelink know before you move or travel overseas. If you don’t, your pension could be reduced or even stopped if you don’t tell them within 28 days of leaving. Also, stay updated about the rules and your obligations, as they can change over time.
Think about healthcare
While you can get the Age Pension overseas, you might not have access to Australian Government health benefits. So, it’s a good idea to get health insurance in your new country and understand how the healthcare system there works.
Conclusion
Retiring in another country can be wonderful, but it’s important to understand how it affects your age pension. We recommend seeking advice from experts who can help you with your unique situation. At Wealth Factory, we’re here to guide you, so you can make informed choices for a peaceful and fulfilling retirement, no matter where you decide to spend it.