Age Pension Portability Rules

11 February 2016
The Federal Government has tightened age pension portability rules. From January 2017, pensioners will only be able to remain absent from Australia for six weeks before facing possible cuts to their age pension.

Legislation recently passed by the House of Representatives has reduced the amount of time that an Australia receiving the age pension can be absent from Australia befor facing a reduction in benefit. The new time period is six weeks (down from 26 weeks) and the legislation is estimated to affect approximately 190,000 pensioners.

Under current legislation, pensioners can be absent from Australia for 26 weeks before pension benefits are affected. After this amount of time, thepension is reduced to a rate that depends on the number of years they have worked in Australia. The Social Services Legislation Amendment (Budget Repair) Bill 2015 reduces this length of time to six weeks. The exception is residents who have lived in Australia longer than 35 years, who will continue to receive the pension even if they are away for longer than 26 weeks.

Background on age pension portability

An income support payment is ‘portable’ when a recipient can continue to receive the payment when they are overseas. Portability varies by payment type and the recipient’s circumstances. For most payments portability is temporary (usually limited to six weeks). However, in most circumstances, recipients of the Age Pension can continue to receive payment indefinitely. This is known as unlimited portability.

While income support recipients with unlimited portability can continue to receive a payment indefinitely while overseas, those who have not resided in Australia for at least 35 years (between the age of 16 and pension age) currently receive a reduced amount after they have been overseas for more than 26 weeks.

The proportion of Australians who were born overseas has hit its highest point in 120 years, with 28% of Australia’s population – 6.6 million people – born overseas, according to recent figures by the Australian Bureau of Statistics (ABS). And according to the Federation of Ethnic Communities’ Councils of Australia (FECCA), nearly 40% of those receiving the Age Pension were not born in Australia.

Unfair Targeting?

National Seniors is Australia’s largest consumer lobby for the over-50s, and National Seniors chief executive Michael O’Neill said the move unfairly targets migrant Australians.

“The government’s decision to cut Age Pensions for people who spend more than six weeks overseas will unfairly target many Australians who like to visit their family and friends abroad,’’ he said.

“Reducing the time allowed overseas from 26 weeks to just six weeks is a drastic change for a significant proportion of pensioners.

“The tightening of these portability rules is a step too far, especially as 18 months ago the rules were already tightened.”

The Labor government has also condemned the change, claiming that it is not unreasonable for someone to wish to spend some time overseas visiting family, particularly if that person has spent decades living and working in Australia.

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