10.34 Agreement with Serbia

On this page

• History
• Benefits and individuals covered by the Agreement
• Double coverage of employees
• Claiming payments under the Agreement
• Totalisation
• Requirement to claim a benefit from Serbia
• Rate calculation
• Portability of payments
• Appeals
• Information that can be exchanged
• Duration of the Agreement
• Serbian social security system

History

The Agreement between Australia and the Republic of Serbia (the Agreement) is a formal treaty under international law and is included in the SS(IntAgree)Act as Schedule 33.

The Agreement started on 1 February 2024.

Benefits & individuals covered by the Agreement

Benefits Covered

Article 2 of the Agreement lists the Australian and Serbian benefits covered by the Agreement.

For Australia, the Agreement covers Age.

For Serbia, the Agreement covers old age, disability and survivor pensions.

Individuals covered

Article 3 of the Agreement with Serbia specifies the people to whom the Agreement applies, that is:

• people who are or have been an Australian resident
• people who are or have been subject to the legislation of Australia
• people who are or have been subject to the legislation of Serbia, and
• where applicable, people who derive an entitlement to payment from a person who is covered by one or both of the above points (for example, partners, dependants or survivors).

Note: For the purpose of the Agreement, an Australian resident is as defined in subsection 7(2) of the SSAct – see 3.1.1.10.

Article 4 of the Agreement provides that people covered by the Agreement will be treated equally under the laws of Australia and Serbia regarding eligibility for and payment of benefits.

Double coverage of employees

Part II of the Agreement (Articles 6 to 10) includes provisions that address double coverage. Double coverage can arise where an employee is sent from one country to the other and compulsory superannuation (or equivalent) contributions are required under the laws of both countries in respect of the same work.

In general, the Agreement provides that Australian and Serbian employees sent to work temporarily in the other country will remain subject only to the relevant laws of their home country, in Australia's case, the Superannuation Guarantee Scheme.

In Australia, the Treasury and the ATO are responsible for Part II of the Agreement.

More information on double coverage is available from Bilateral social security agreements on the ATO website.

Claiming payments under the Agreement

Who can claim?

Article 11 of the Agreement covers claim lodgement for Australian benefits. Normally, under Australian domestic legislation, a person must be both an Australian resident and present in Australia to claim an Australian payment. Article 11 allows a person to lodge a claim for an Australian benefit under the Agreement if they are residing in Serbia and/or present in Serbia.

Note: For the purpose of the Agreement, an Australian resident is as defined in subsection 7(2) of the SSAct – see 3.1.1.10.

If the person is not an Australian resident and/or present in Australia at the time of claim (that is, they are residing in Serbia and/or present in Serbia), they must have a minimum of 12 months AWLR to use the claim lodgement provisions.

Note: In accordance with Article 1, AWLR for the purposes of the Agreement is defined in the SS(IntAgree)Act. It is the number of months between the ages of 16 and Australian age pension age (working life), or the aggregate of those periods, which a person has been an Australian resident. Periods deemed Australian residence for the purposes of totalisation under Article 12 (see below) are not included in this calculation.

Where can benefits be claimed

Under Article 16, claims for benefits covered by the Agreement can be lodged:

• in Australia, with any Services Australia office, or
• in Serbia, with the Republic Fund for Pension and Disability Insurance.

Each country is responsible for processing claims and determining eligibility for its particular benefits. Where a claim for the Age is lodged in Serbia, the Republic Fund for Pension and Disability Insurance will transmit the claim to Services Australia for processing and determination. The equivalent process applies to claims for pension and disability insurance lodged in Australia.

Date of lodgement

Under Australian domestic legislation, the day on which a claim for an Australian benefit is lodged can affect the date from which payments start. Under Article 16, the date on which a claim form is lodged with any of the above-mentioned authorities is the official date of lodgement for all purposes.

For example, a claim for the Age is lodged with the Republic Fund for Pension and Disability Insurance in Serbia. The claim lodgement date when determining the payment start date is the date the claim was lodged with the Republic Fund for Pension and Disability Insurance, not the date that claim was received by Services Australia for processing.

Totalisation

Totalising for an Australian benefit

Article 12 of the Agreement covers totalisation in order to qualify for an Australian benefit under the Agreement.

Totalisation means that a period of insurance completed under the legislation of Serbia can be added to periods as an Australian resident (at any time) to meet the minimum residence requirements for the Age under the SSAct.

Note: Article 1 of the Agreement defines period of insurance to mean a period of paid contributions and equal periods regarded as such under the legislation of the Republic of Serbia.

The Agreement allows non-continuous periods of insurance completed under the legislation of Serbia to be added together and considered continuous for the purpose of the 5 year continuous residency requirement for the Age.

When periods of Australian residence (at any time) and periods of insurance completed under the legislation of Serbia coincide, the overlapping period shall only be taken into account once.

A person must have a minimum of 12 months AWLR (6 months of which must be continuous) in order to use Article 12 to totalise to qualify for an Australian benefit.

Totalising to qualify for a Serbian benefit

Article 14 of the Agreement covers totalisation in order to qualify for a Serbian benefit under the Agreement.

Periods of AWLR can be counted as periods of insurance completed under the legislation of Serbia if a person does not qualify for a Serbian benefit based solely on their periods of insurance completed under the legislation of Serbia. However, before a person is able to totalise for a Serbian benefit, they must have a minimum period of insurance completed under the legislation of Serbia of 12 months.

Note: In accordance with Article 1, AWLR for the purposes of the Agreement is defined in the SS(IntAgree)Act. It is the number of months between the ages of 16 and Australian age pension age (working life), or the aggregate of those periods, which a person has been an Australian resident. Periods deemed Australian residence for the purposes of totalisation under Article 12 are not included in this calculation.

Requirement to claim a benefit from Serbia

The Agreement does not contain special provisions that make it compulsory for people claiming an Australian benefit under the Agreement to also claim a benefit from Serbia. However, under Australian domestic legislation, all claimants (including those claiming under an Agreement) are required to take reasonable action to claim any foreign pension entitlements. This requirement is covered by the CFP legislation, which is explained further in 7.3.1.

Rate calculation

General rate calculation

The rate calculation processes to be used for the purpose of Australian benefits under the Agreement are outlined in Article 13, and are to be read in conjunction with provisions in the SS(IntAgree)Act and the SSAct. There are 2 methods by which a person’s Australian benefit can be calculated, which will generally depend on where they are located. The 2 ways are:

• outside Australia rate (proportional rate), and
• inside Australia rate (direct deduction rate).

See the ‘Portability of payments’ section below which outlines the method used when a recipient moves between Australia and Serbia, either permanently or temporarily.

Outside Australia rate (proportional rate)

Where a person is eligible for an Australian benefit under the Agreement, and is located outside Australia (for example, they are residing in Serbia), their rate of payment will generally be calculated in accordance with paragraph 1 of Article 13. The person’s rate of payment is proportionalised, based on their period of AWLR according to the following formula:

Where:

P = the person’s total annual notional (means-tested) rate payable in Australia

Q = the person’s period of AWLR in months or 540 (whichever is lower).

Note: When determining P, no additional child amount is included. Any other additional amount or supplement is only included for the period for which that amount/supplement is payable outside Australia under the SSAct. For example, the energy supplement is only payable outside Australia for a maximum of 6 weeks and only if the absence is temporary. The pension supplement is reduced to the basic amount after 6 weeks’ temporary absence or immediately for permanent departures.

Note: When determining Q, in accordance with Article 1, AWLR for the purpose of the Agreement is defined in the SS(IntAgree)Act. It is the number of months between the ages of 16 and Australian age pension age (working life), or the aggregate of those periods, which a person has been an Australian resident. Periods deemed Australian residence for the purposes of totalisation are not included in this calculation. If the person’s AWLR period is a number of whole months, the period is increased by one month; if the period is a number of whole months plus a day or days, the period is increased so it is equal to the number of whole months plus one month.

Inside Australia rate (direct deduction)

Article 13 specifies that where an Australian benefit is only payable to a person in Australia by virtue of the Agreement (for example, they have to totalise under the Agreement in order to qualify for an Australian benefit), their rate of Australian benefit will be calculated as follows:

1. calculate the person’s income in accordance with the SSAct but disregard any Serbian benefit to which the person is entitled
2. deduct the amount of Serbian benefit to which the person is entitled from the maximum rate of Australian benefit payable, and
3. apply the relevant means-test rate calculation set out in the SSAct to the Australian benefit amount remaining after step 2, using the income calculated at step 1.

Where a person is a member of a couple and they and/or their partner are receiving a Serbian benefit, each member of the couple will be deemed to be in receipt of one-half of either the amount of the person’s Serbian benefit or the total of both Serbian benefits.

A person living in Australia who is totalising under Article 12 and subject to the inside Australia rate calculation as a result will change to the normal autonomous rate calculation under the SSAct as soon as they meet the usual qualifying residence period, for example, once they reach 10 years residence in Australia and no longer need to totalise under the Agreement.

Arrears of Serbian benefits

When a person is granted a Serbian benefit that includes the payment of arrears, the rate of any Australian benefit paid to the person (and/or their partner) during the period covered by the arrears is reassessed retrospectively to determine whether they have received a higher rate of Australian benefit than they were entitled to.

A debt can be raised against the person (and/or their partner if applicable) under section 1228A of the SSAct and recovered through the same methods as other debts. See 4.3.6.10 for more details.

Portability of payments

Portability refers to a person’s continuing entitlement to a social security payment while outside Australia.

The portability of payments paid under the Agreement is covered in Article 5.

Note: A person who qualifies autonomously for a payment under Australian domestic legislation is covered by domestic portability rules. This is outlined further in 7.1.1.

Moving between Australia & Serbia

Australian benefits paid under the Agreement are portable indefinitely where the person travels between Australia and Serbia.

Rate payable when moving between Australia & Serbia

The rate of Australian benefit payable under the Agreement is covered in Article 13 and depends on whether the person is inside Australia or outside Australia. These rate calculation methods are covered in the ‘Rate calculation’ section above.

People paid under the Agreement who reside in Australia and travel to Serbia temporarily will have their rate calculated using the inside Australia rate for a period of 26 weeks or less. Once they have been in Serbia for more than 26 weeks, their rate will be calculated using the outside Australia rate.

People paid under the Agreement who leave Australia permanently for Serbia will have their rate calculated using the outside Australia rate as soon as they leave Australia.

People paid under the Agreement who reside in Serbia and travel to Australia temporarily will continue to have their rate calculated using the outside Australia rate for a period of 26 weeks or less. Once they have been in Australia for more than 26 weeks, their rate will be calculated using the inside Australia rate.

People paid under the Agreement who come to Australia from Serbia permanently and who do not qualify for an Australian benefit in their own right (that is, they are totalising under the Agreement to meet the qualifying residence period) will have their rate calculated using the inside Australia rate as soon as they arrive in Australia. Provided they are still living in Australia, their rate will change to the normal autonomous rate calculation as soon as they meet the usual qualifying residence period (10 years residence in Australia for Age).

People who travel to a third country

Australian benefits paid to people under the Agreement are not portable to third countries.

Portability for former Australian residents

SSAct section 1220 provides that former Australian residents who return to Australia to live and are granted Age after their return are not entitled to portability of their payment for any absences that occur within 2 years of resuming residence in Australia.

However, former residents who return to Australia and claim a benefit under the Agreement can subsequently leave Australia within 2 years and be eligible for portability, provided they travel to Serbia. Autonomous pensioners can transfer to a benefit under the Agreement to maintain qualification and portability if they travel to Serbia. In both these cases, the Agreement will determine the rate payable while they are outside Australia.

Appeals

People paid under the Agreement have the same appeal rights as those people paid under domestic legislation.

Article 16 of the Agreement covers lodgement of appeals. Under Article 16, appeals and related documentation may be lodged in either Australia or Serbia, and will be subject to the relevant country’s legislation. That is, an appeal in relation to an Australian benefit will be subject to the review and appeal processes specified in Australian domestic legislation. The date an appeal is lodged with one country will be taken as the date of lodgement with the other country.

Appeals by people paid under the Agreement can be lodged with Services Australia in Australia or with the Republic Fund for Pension and Disability Insurance in Serbia.

Information that can be exchanged

Article 18 of the Agreement allows Australia and Serbia to exchange information needed for the administration of the Agreement.

The information exchanged is confidential and can only be used for the purpose of administering the Agreement and the domestic legislation to which the Agreement applies.

There is no requirement under the Agreement for either Australia or Serbia to undertake administrative measures that would conflict with their respective laws or administrative practices or to provide information, which is not obtainable under the laws or the normal course of administration of either party. This means that all information provided or received by Australia is subject to the same privacy principles as information obtained under domestic legislation. Information received by Serbia is subject to privacy legislation relevant to Serbia.

Duration of the Agreement

Duration

Commencing from 1 February 2024, the Agreement will remain in force indefinitely, unless it is terminated by either side.

Termination

Under Article 25, if the Agreement is terminated, the Agreement will remain in force for 12 months following the date on which either Australia or Serbia advises the other, through diplomatic channels, that they intend to terminate the Agreement.

Following any termination, those people who were being paid, or had lodged a claim and were entitled at that time, under the Agreement prior to its termination will continue to receive that benefit as per the provisions in the Agreement.

Serbian social security system

The Serbian social security system is based on a contributory scheme (social insurance) that is financed on a pay-as-you-go basis. Entitlement for most benefits is based on meeting minimum social insurance contribution requirements.

More information on the Serbian social security system is available from the Republic Fund for Pension and Disability Insurance.