7.1.4 Requirements for former residents of Australia receiving a portable pension

Summary

A person must satisfy the SSAct definition of Australian resident in order to lodge a proper claim for a pension. Generally, this means they must be residing in Australia and physically present in Australia when they lodge their claim.

A claim for pension can be lodged by a former resident who has resumed residence in Australia only if, on the evidence available, there is a clear intention to remain permanently in Australia. A person who intends to return to Australia for a defined period only (for example, 2 years) would not be an 'Australian resident' as per SSAct subsection 7(2).

Specific portability rules apply when a person who was formerly an Australian resident returns to Australia and becomes an Australian resident again and is successful in claiming Age or DSP. These are known as the 'former resident rules'.

Portability for former residents - Age, DSP

Since 20 September 2000, a former resident who returns to Australia and is granted Age or DSP, or who transfers to Age under SS(Admin)Act section 12, cannot take that pension outside Australia if they leave within 2 years of having resumed residence in Australia. The purpose of this legislation is to discourage people from travelling to Australia just to get an Australian pension to take back overseas.

This rule also applies to someone who has residence in an external territory, comes to Australia for the first time and is granted a pension within 2 years of taking up residence in Australia.

The 2-year period includes, as separate full days, the day on which the recipient returns to Australia to resume Australian residence and the day on which they leave again.

There is no discretionary power to allow portability of Age or DSP during the 2-year period (note, some exceptions to the 2-year rule apply - see below).

Payment may be suspended for short overseas absences during the 2-year period and does not have to be reclaimed on return to Australia. A short absence from Australia (as long as the person is still classed as an Australian resident) will not impact on the end date of the 2-year period (that is, the absence still counts towards the person's 2-year period).

Note: This rule also previously applied to WP, WidB and BVA. These payments ceased from 20 March 2020 and recipients transferred to another payment where eligible, such as Age.

Exceptions

Former residents who were granted their pensions before 20 September 2000 are subject to the old rules of 12-months restriction on portability (unless there are unforeseen circumstances).

The 2-year former resident waiting period does not apply if the person is eligible for financial assistance under the Medical Treatment Overseas Program in respect of their absence from Australia or needs to accompany such a person.

International social security agreements

If a pension is granted under an international social security agreement or a recipient is transferred to an agreement pension, that pension is subject to the portability rules in the agreement.

People who reside outside Australia and are paid under an agreement and who later return to Australia for residence and are transferred to autonomous (domestic) payment arrangements are not subject to the ‘former resident rules’, provided there is continuity of payment. The person’s payment rate may vary as a result of domestic legislation applying to calculate the person’s payment rate instead of the agreement.