10.1.100 General Principles Glossary

Introduction

This section contains a list of terms used in and applicable to agreements.

Administrative Arrangement

The way in which the parties to an agreement will administer the agreement is agreed to in a document called the administrative arrangement. This document, unlike the agreement, is not a legally binding treaty under international law. However, it is a record of the procedures that the parties prefer to follow when applying the agreement.

Age Pension Age

This is defined in SSAct section 23(5A), 23(5B) and 23(5C).

Act reference: SSAct section 23(5A) A man born during the period specified, section 23(5B) A woman born before 1 July 1935…, section 23(5C) A woman born within the period specified…

Agreement Country/Agreement Countries/Agreement Country's

An agreement country is a country with which Australia has a current social security agreement.

Agreement Pension/s

Agreement pensions are those pensions where qualification, payability or retaining qualification (e.g. short term portability cases) relies on one or more provisions of a Scheduled International Social Security Agreement. In some agreements, partner related benefits (wife and carer pensions) are deemed to be agreement pensions when granted in Australia (without the help of an agreement) to partners of agreement pensioners.

Agreement Pensioner/s

An agreement pensioner is a person who receives an agreement pension.

Australia

Australia is defined in the Acts Interpretation Act 1901 as including the Territory of Cocos (Keeling) Islands and the Territory of Christmas Island so it is not necessary for Australia to be defined in an agreement. Most agreement partners have their territory already defined in their internal legislation but, if not, it is defined in the Interpretation Article of the agreement, especially if the country has external territories or borders under contention.

Australian Resident/s

Australian resident is defined in SSAct section 7(2).

Act reference: SSAct section 7(2) An Australian resident is…

Australian Working Life Residence

AWLR refers to a person's period of residence in Australia between age 16 and age pension age. If the rate of an agreement pension is calculated on a proportional basis the proportion to be paid is generally based on an AWLR up to a maximum of 35 years (420 months). A person's AWLR is calculated in whole months and a full month is added for odd days.

Note: The Agreements with Greece and the former Yugoslavian Republic of Macedonia have provision for a maximum of 44 years (528 months) and New Zealand has 45 years WAR requirements.

Using a partner's AWLR

From 1 July 2014, a person receiving an agreement Age, DSP, WP or CP pension (with the exception of New Zealand Agreement CP) will have their pension calculated on the basis of their own individual AWLR, rather than utilising their partner's or former partner's AWLR, which may be longer.

Pensioners already in receipt of an agreement pension and overseas at 1 July 2014 will not have their pension calculation changed from using a maximum AWLR of 25 years (300 months) unless they return to Australia for at least 26 weeks. A person already in receipt of WP or CP can move to the new assessment if it will result in a higher rate of payment.

A person who gets an agreement pension as a de jure widow or widower will continue to have the benefit of using their late partner's period of AWLR if it is longer than their AWLR.

Autonomous/ly

Autonomous pensions are pensions that are paid under domestic social security legislation without any help from the provisions of a Scheduled International Social Security Agreement.

Ceiling/Ceiling Rate/Ceiling on the Rate of Australian Pension Paid Overseas

With effect from 1 August 2000, the rate of an Australian pension paid under an agreement or otherwise to a person outside Australia is not to exceed the notional rate otherwise payable to that person in Australia. The introduction of a ceiling on the rate of Australian pension paid overseas ensures that people outside Australia, who are entitled to an income test concession on their contributory foreign pension cannot receive a higher rate of Australian pension than they would if they were in Australia.

Note: This has always been the case under the Agreement with Italy.

This will usually only occur when the combination of high foreign pension and low working life residence produces a rate of pension higher than the inside Australia income tested rate.

Act reference: SS(IntAgree)Act section 13(2) Overall calculation process

Cooperation

Some agreements provide for cooperation in respect to the implementation of agreements on social security entered into by either of the parties with third states. Refer to the relevant administrative arrangements to determine to what extent each party has agreed to cooperate.

Direct Deduction/Direct Deductions/Direct Deduction Rate

Direct deduction refers to the special rating arrangement where pensioners in Australia who get accelerated access to Australian pensions through totalisation have any pension which is received from an agreement country deducted from the Australian entitlement on a dollar for dollar basis (rather than under the ordinary income test) until they can qualify for an Australian autonomous pension. The chapter for each agreement should be checked to ensure this is not modified in any way.

Domestic Law

For Australia, domestic law means the SSAct, unaffected by a Scheduled International Social Security Agreement. Pensions granted under domestic law are referred to as autonomous pensions, while pensions granted by using any provision of a Scheduled International Social Security Agreement are referred to as agreement pensions.

Embargo/Embargoes

Embargoes are the special provisions in agreements that allow one country to recover, from the arrears of benefit due from the other, any overlapping payments it has made pending the grant of the other country's benefit.

Entitled Person/s

A wife pensioner is an entitled person if she is a woman who is or was the partner of a man who was affected by the so-called 'Greek conspiracy' or a woman who was an Australian resident for at least 10 years.

A widow B pensioner is an entitled person if she is:

  • a woman who is or was the partner of a man who was affected by the so-called Greek conspiracy,
  • a woman who was an Australian resident for at least 10 years, or
  • a woman who is receiving a WidB because her legal husband died.

These women are entitled to indefinite portability of autonomous pension.

Policy reference: SS Guide 10.1.10.60 WP & Widow Pension - Entitled & Not Entitled Persons

Equivalent Periods of Residence

Equivalent periods of residence are those periods in the agreement country which are converted to Australian residence (in Step 2 of the totalisation process in 10.1.5.30).

Government Employee

Means a person employed by the Australian Government or by a political subdivision or local authority of Australia, that is, a state, territory and local government.

Government Employment

Means employment by the Australian Government and also includes employment by a political subdivision or local authority of Australia, that is, a state, territory and local government.

Legislation

Legislation means the laws referred to in Article 2 of individual agreements and means, for Australia, those parts of the Social Security Law dealing with the pensions and allowances listed in the Article.

Lodgement

Each agreement has provisions for the lodgement of claims. Some agreements allow people residing in other countries that also have an agreement with Australia to lodge claims for Australian benefits.

Refer to the relevant agreement country for specific requirements.

Overlap/Overlapping

When periods of Australian residence and social insurance periods in the agreement country overlap, the country applying the totalisation provisions will count the overlapping periods once only.

Example: Where contributions were made to the Italian scheme from 1980 to 1994 and the claimant for Australian pension was an Australian resident from 1992 to 1996, Australia will use only the Italian contributions from 1980 to 1991 in the totalisation process. These will be added to Australian residence from 1992 to 1996.

Period as an Australian Resident/Periods as an Australian Resident

Where an agreement refers to Australian residence at any time in a person's life, the expression 'period as an Australian resident' is used.

Period of Residence in Australia/Periods of Australian Residence

This term has the same meaning as working life residence as defined in SSAct section 1221-B1.

Act reference: SSAct section 1221-B1 Working life

Portability

Portability is the term used to describe a person's right to be paid a pension or allowance while outside the territory of the paying country. Pensions and allowances are described as being PORTABLE or NON-PORTABLE.

Proportional/Proportionality

Proportionality means that the pension rate to be paid overseas is based on the pensioner's Australian working life residence, or, in some cases, on the partner's working life residence.

Pro-rata

Pro-rata is the term used by countries with contributory social security systems to describe the amount of benefit to be paid to a person who qualifies for that benefit through totalisation. The pro-rata usually involves a fraction, consisting of the period of actual contributions as the numerator and the totalised period as the denominator.

Protocol/s

A Protocol is a formal document which both parties to an agreement sign and pass into their laws so that it can become part of the agreement. Protocols let minor amendments be made to the original agreement without having to renegotiate and redraft the entire agreement.

Reciprocity

Reciprocity refers to the situation that can be achieved under agreements when each country agrees to offer comparable social security coverage and benefits to the people affected. Reciprocity can be achieved on a benefit-to-benefit basis (e.g. Australian age pension matched with Irish retirement pension) or more globally (e.g. Australian wife pension and additional payments for children of pensioners matched with Italian family allowance).

Scheduled International Social Security Agreement

A Scheduled International Social Security Agreement is an agreement on social security matters between Australia and a foreign country, the text of which has been included as a Schedule in the SS(IntAgree)Act.

Totalisation/Totalise

Totalisation refers to the process used in agreements by which periods of residence or contributions in one country are added to periods in the other country in order to meet minimum residence or contribution requirements to qualify for benefits.

Example: A claimant for Australian Age who has 7 years as an Australian resident (including 5 years continuously) and 4 years of contributions to the Italian social security system, could totalise those periods to meet Australia's minimum 10 year residence requirement.

Working Life Residence/Period of Australian Working Life Residence/Periods of Australian Working Life Residence

Working life residence means Australian working life residence.

Last reviewed: 21 September 2015