7.1.1.10 Overview of portability legislation

Introduction

General portability (1.1.P.310) of pensions started on 8 May 1973. The legislation for portability is in SSAct Part 4.2 and in the SS(IntAgree)Act, which give effect to international social security agreements (1.1.A.120).

Full details about each of Australia's Social Security Agreements are in Part 10 of the SS Guide.

Where do I find …?

If you need to refer to:

• portability under International Social Security Agreements see 7.1.1.20
• portability of benefits in New Zealand see 7.1.3.10 and 7.1.3.20
• requirements for former residents receiving a portable pension see 7.1.4, and/or
• a comprehensive table listing conditions for payment overseas see 7.1.2.20.

Development of portability legislation

Since general portability of Australian pensions began in 1973, there have been a number of important changes including:

• introducing, with savings provisions (1.1.S.40), AWLR (1.1.A.340) and proportional portability for pensions granted after 1 July 1986
• ceasing the portability of carer pension from 1 October 1987, except under some international social security agreements, but re-introducing short term portability in 1992
• limiting portability of sole parent pension (SPP) to the first 12 months of an absence from 1 July 1988, except for 'special widows', or people who were receiving the payment under an international social security agreement that provided extended portability
• introducing departure certificates from 1 February 1989
• limiting the portability of WP and WidB to the first 12 months of an absence from 1 July 1990, except for 'entitled' WP or WidB recipients (1.1.E.120) who retained access to indefinite portability
• limiting the portability of certain DSP payments to 12 months from 12 November 1991
• introducing amendments to departure certificate provisions providing for a post-departure review when no departure certificate had been issued for departures on or after 1 January 1995
• amalgamating parenting allowance (PgA) and SPP into PP from 20 March 1998. Upon introduction, PP was portable for temporary absences of up to 26 weeks, compared with 12 months for SPP and 13 weeks for PgA. Savings provisions existed for former recipients of SPP who were overseas when PP was introduced
• repealing departure certificate provisions from 20 September 2000
• introducing standardised and simplified portability rules, giving most payments up to 26 weeks of portability for temporary absences from 20 September 2000, with a savings provision for some pension recipients (see below)
• reducing the portability for temporary absences overseas from 26 to 13 weeks for some DSP recipients and CP and CA recipients from 1 July 2004
• providing discretionary portability extension to severely disabled DSP recipients who were dependent on their carer posted overseas for work from 1 July 2011
• providing discretionary unlimited portability for certain DSP recipients assessed as severely impaired and no future work capacity or an extension of payment where a DSP recipient is overseas and has a serious accident or hospitalisation, from 1 July 2012
• reducing the general portability period for most payments from 13 weeks to 6 weeks for temporary absences from 1 January 2013 (see below)
• changes to the AWLR rules for proportional portability (see below)
• reducing the general portability period for DSP recipients from 6 weeks to 4 weeks in a 12-month period for temporary absences from 1 January 2015 and removing general portability for YA student and ABSTUDY (see below)
• allowing portability extensions for certain recipients of payments with indefinite portability to ensure their payment rate/conditions are not affected at 26 weeks if they are unable to return home due to certain specified reasons, from 1 July 2021 (7.1.2.10).

1 January 2015 change - limited portability for DSP & student payments

From 1 January 2015, DSP is generally portable for up to 4 weeks in a 12-month period unless the person has been granted indefinite portability, an exemption or undertaking approved full-time overseas study as part of their Australian course.

From 1 January 2015, general portability of YA (student) and Austudy was removed. YA (student) and Austudy is still portable where the recipient is undertaking approved full-time overseas study as part of their Australian course, an Australian Apprenticeship, or are travelling overseas for approved medical treatment or an acute family crisis.

Recipients overseas immediately before 1 January 2015 were subject to the rules under which they departed until they returned to Australia.

1 July 2014 changes - AWLR period

From 1 July 2014, the AWLR period increased from 25 years (300 months) to 35 years (420 months). Age recipients and certain other pensioners with unlimited portability are required to have been Australian residents for 35 years during their working life (from age 16 to age pension age) to receive their full means-tested pension after 26 weeks absence from Australia.

The change also applied to all pensioners paid under social security agreements outside Australia, except those paid under a social security agreement with Greece and New Zealand due to the specific terms of those agreements.

Pensioners living overseas immediately before 1 July 2014 continue to be paid under the current 25 year rule, unless they return to Australia for longer than 26 weeks and leave again, when the new rules will start to apply to their pension calculation.

1 July 2014 changes - calculation of AWLR (individual or partner)

From 1 July 2014, members of a couple or former members of a couple paid outside Australia under a social security agreement have their pensions calculated on the basis of their own AWLR, rather than their partners' AWLR.

Widows/ers receiving PPS, BVA or WidB can continue to use their former partner's AWLR if it is higher than their own AWLR.

Note: This provision applied to BVA and WidB, however, these payments ceased from 20 March 2020. Recipients who transitioned from WidB to Age without a gap in entitlement retained this savings provision.

Existing Age or DSP recipients outside Australia immediately before 1 July 2014 are exempt from this change unless they return to Australia for 26 weeks or more.

Existing recipients of CP under an agreement who have a higher AWLR than their partner may use their own AWLR from 1 July 2014 and retain the 25 year AWLR (except for CP recipients paid under the New Zealand Agreement) subject to the 26 week return to Australia rule.

Note: This provision also applied to WP, however, this payment ceased from 20 March 2020. Recipients who transitioned to Age without a gap in entitlement retained this savings provision.

1 July 2014 changes - summary of savings provisions

Recipients of CP under an agreement and outside Australia immediately before 1 July 2014 whose partner's AWLR is higher than their own, can continue to receive a rate based on their partner's AWLR.

Note: This provision also applied to WP, however, this payment ceased from 20 March 2020. Recipients who transitioned to Age without a gap in entitlement retained this savings provision.

Pensioners paid under an agreement and in Australia temporarily on 1 July 2014 continue to be paid based on the 25 year AWLR and use of their partner's AWLR if they depart Australia within 26 weeks.

Pensioners paid an AWLR rate under an agreement who were outside Australia immediately before 1 July 2014 and returned to Australia on or after this date retain the 25 year AWLR and use of their partner's AWLR, provided they did not remain in Australia for 26 weeks or more from their return date. Pensioners not paid under an agreement who were outside Australia immediately before 1 July 2014, including those who transfer to an agreement pension at the end of their domestic portability period, are assessed using the 25 year AWLR.

Social security agreements with Austria, Belgium, Canada, Italy, Norway, Switzerland and the USA contain comparison rate provisions, i.e. the higher of the outside Australia or inside Australia rate can be paid to a person receiving their pension under the agreement in Australia. Pensioners paid under an agreement and receiving a comparison rate pension and who were inside Australia on 1 July 2014 retain the 25 year AWLR and use of their partner's AWLR. If they depart Australia they will no longer be saved and will be subject to the 35 year AWLR rules.

Note: Pension recipients grandfathered under the pre 1 July 2014 rules can request a portability extension if they have temporarily returned to Australia and are unable to leave Australia before the end of the 26-week period because of certain specified reasons.

1 January 2013 changes - general portability rules

From 1 January 2013, the general portability period reduced from 13 weeks to 6 weeks. From this date, generally all payments are portable for up to 6 weeks (and, for most payments, only for temporary absences). Specific conditions must be met for some payments.

The 6 week portability period is subject to continuing qualification for the relevant payment and nothing in the portability rules confers a right on a recipient to continue to be paid if the recipient is not qualified for the payment. This means that qualification for the payment overrides any portability provisions.

Recipients overseas immediately before 1 January 2013 were subject to the rules under which they departed until they returned to Australia.

The following payments continue to be indefinitely portable and are not affected by the 1 January 2013 changes:

• age pension
• DSP recipients who are severely disabled with a terminal illness and are departing permanently to their country of origin to be with or near a family member, or who have a permanent and severe impairment and no future work capacity.

Recipients with unlimited portability may have their payments proportionalised after 26 weeks of absence (there are special rules if the recipient is departing to New Zealand). Some recipients may also retain the 20 September 2000 savings provision (see below).

1 July 2012 changes - indefinite portability of DSP

From 1 July 2012 DSP recipients with a severe impairment and no future capacity to work are eligible for indefinite portability of their pension. DSP recipients applying for portability under the 'severely impaired' provisions are required to undergo an assessment of their impairment and their future work capacity.

To be eligible for indefinite portability under this rule:

• the recipient must have a severe impairment - that is, be assessed as having an impairment rating of at least 20 points under the Impairment Tables introduced on 1 January 2012, of which 20 points or more are assigned under a single table, and
• the level of impairment is considered long-term - that is, the impairment will persist as a severe impairment (no prospect of significant improvement) for at least the next 5 years, and
• the impairment will prevent the recipient from doing any work independently of a program of support in the next 5 years, OR
• the recipient is assessed as manifestly qualified for DSP under the manifest criteria in force at the time of assessment (these are the post-December 2002 criteria).

1 July 2011 changes - portability extensions for DSP

From 1 July 2011, severely disabled DSP recipients may be entitled to a discretionary extension of portability if they have a family member who is posted overseas for work on whom they depend and with whom they will be living throughout the period of absence.

1 July 2004 changes - portability provisions for DSP

From 1 July 2004, the portability period for DSP for temporary absences reduced from 26 to 13 weeks, including for people with a severe disability or blind who had previously had unlimited portability. Unlimited portability of DSP was retained for DSP recipients who were terminally ill, severely disabled and departing permanently to their country of origin, or to be with, or near, a family member. DSP recipients who were outside Australia immediately before 1 July 2004 with unlimited portability were entitled to keep their unlimited portability for any departure on or after 1 July 2004 providing they have not returned to Australia for permanent residence.

Under the savings provision for this change, if these recipients return temporarily to Australia, they are not entitled to ancillary payments such as RA and PhA, nor are they entitled to a concession card. This is because they are not Australian residents. If a recipient chooses to resume Australian residency (and therefore entitlement to ancillary payments, e.g. concession cards), then they lose the savings provision and any new absence will be under the new rules (note, there have been subsequent further changes to portability for DSP - see above). DSP recipients covered by this savings provision retain their previous proportional rate exemptions and rules (including pre 20 September 2000 rules if applicable).

20 September 2000 changes - general portability rules

From 20 September 2000, portability became a payability issue and simplified portability rules were introduced for all payments. 9 different portability periods were replaced with 2:

• temporary absences - 26 week portability for payments and recipients were required to be an Australian resident to maintain qualification, and
• permanent absences - indefinite portability for Age or DSP recipients with a severe disability. The rate of payment was determined by the length of contributions or residence in the paying country.

Recipients overseas on 20 September 2000 continued to be payable under the former rules until they returned to Australia for longer than 26 weeks.

20 September 2000 changes - portability extensions (continue to apply from 1 January 2013)

From 20 September 2000 if a recipient has a limited portability period and extreme circumstances beyond the recipient's control arise after departure and prevent the recipient from returning to Australia within their portability period, the portability period may be extended under the Secretary's discretionary power.

A pension granted to a former resident who resumes Australian residency is not portable for the first 24 months following their resumption of residence in Australia. There is no discretionary power to allow for portability in this period.

20 September 2000 changes - savings provision (continues to apply from 1 January 2013)

Age recipients who were overseas before 20 September 2000 and who have not since returned to Australia for a period of 26 weeks or more are paid their portable pensions under the pre 20 September 2000 rules.

Note: This provision also applied to entitled WP and entitled WidB pensioners, however these payments ceased from 20 March 2020. Recipients who transitioned to Age without a gap in entitlement retained this savings provision.

Age recipients who were granted before 2 July 1986 (or who were Australian residents on 8 May 1985, and left Australia for any country before 1 January 1996 or after that date for a country with which Australia does not have a social security agreement) do not have their rate proportionalised. In some circumstances Age recipients can use their partner's (or former partner's) AWLR in determining their proportional rate.

Note: This provision also applied to WidB recipients, however, this payment ceased from 20 March 2020. Recipients who transitioned to Age without a gap in entitlement retained this savings provision.

Note: The above savings provisions may also continue to apply to DSP 'saved' recipients overseas on 1 July 2004 (as above) for as long as they retain that 1 July 2004 saving.

DSP recipients granted on or after 12 November 1991 who are not severely disabled or severely impaired could access the 20 September 2000 savings provision (allowing them 12 months of portability) for absences that commenced prior to 1 July 2004. These recipients were overseas immediately before 20 September 2000 and had not returned for more than 26 weeks although they returned every year for a short period to 'renew' their 12 months portability period. Once these recipients return to Australia this savings provision will be lost and they will generally be limited to 4 weeks portability for any departure commencing on or after 1 January 2015.

Note: This provision also applied to WP and WidB recipients who were not entitled, however these payments ceased from 20 March 2020.

Note: Pension recipients grandfathered under the pre 20 September 2000 rules can request a portability extension if they have temporarily returned to Australia and unable to leave Australia before the end of the 26-week period because of certain specified reasons.

Note: DSP recipients entitled to indefinite portability, or who retained 12 months portability under the 20 September 2000 provisions, are exempt from the proportionality rules if they became unable to work or permanently blind while they were Australian residents. The exemption from proportionality for these DSP recipients were not affected by the 20 September 2000, 1 July 2004, or 1 January 2013 changes to portability.