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 Guide to Social Security Law.

Act reference: SSAct Part 4.2 Overseas portability

Policy reference: SS Guide Part 10 Australian Social Security Agreements, 10.2 Agreement with New Zealand

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 or BVA 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 CP 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 (1.1.A.120) that provided extended portability
  • introducing departure certificates from 1 February 1989
  • limiting the portability of WP and WidB from 1 July 1991
  • limiting the portability of DSP 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
  • repeal of 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, and introducing a savings provision for some pension recipients from 20 September 2000 to enable them to continue under pre 20 September 2000 conditions until they return to Australia for a period of greater than 26 weeks
  • changes to DSP portability on 1 July 2011
  • reduction of general portability periods from 13 weeks to 6 weeks for temporary absences from 1 January 2013
  • reduction of general portability from 6 weeks to 4 weeks in a 12-month period for DSP recipients travelling overseas on a temporary absence from 1 January 2015.

Portability rules introduced on 1 January 2015

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.

General portability of YA (student) and Austudy has been 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 are subject to the rules under which they departed until they return to Australia.

Example: A YA (student) or Austudy recipient given 6 weeks portability on 20 December 2014 can remain overseas for up to 6 weeks and remain qualified for their student payments. However, any absence starting on or after 1 January 2015 will be under the new rules (generally no portability).

1 July 2014 changes - AWLR period

From 1 July 2014, the AWLR increased from 25 years (300 months) to 35 years (420 months). Age pensioners 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 will also apply 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 who are living overseas immediately before 1 July 2014 will 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 will now have their pensions calculated on the basis of their own AWLR, rather than their partners' AWLR.

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

Existing Age or disability support pensioners 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 WP or CP under an agreement who have a higher AWLR than their partner or carer may use their own AWLR from 1 July 2014 and retain the 300 month denominator (except for CP recipients paid under the New Zealand Agreement) subject to the 26 week return to Australia rule.

Act reference: SS(IntAgree)Act Part 3 Division 3 Residence factor

Policy reference: SS Guide 10.1.9.30 Working Life Residence for Agreement Payments

1 July 2014 changes - comparison rate provisions under certain agreements

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.

Recipients of pensions paid under an agreement that provides for a comparison rate will continue to receive a rate based on the existing 25 year AWLR and use of their partner's AWLR if applicable.

1 July 2014 changes - summary of savings provisions

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

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

Pensioners paid under an agreement and receiving a comparison rate pension and are inside Australia on 1 July 2014 will 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.

Portability rules introduced on 1 January 2013

From 1 January 2013 generally all payments are portable for up to 6 weeks (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 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.

Portability is defined in terms of payability, i.e. as long as a person qualifies for a payment the payment can be paid for temporary absences of up to 6 weeks. Ancillary payments such as RA and PhA are also portable for up to 26 weeks (6 weeks for TAL) for temporary absences only if the main payment is portable indefinitely.

Entitled WidB, entitled WP and Age are portable indefinitely. Terminally ill DSP recipients who are severely disabled and those who have a severe and permanent impairment and no future work capacity, may also have unlimited portability for permanent departures. These 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 of these recipients may also retain the 20 September 2000 savings provision (see below).

Act reference: SSAct section 1212D Part does not affect need for qualification

General provisions introduced on 1 January 2013

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

Example: A YA recipient given 13 weeks portability on 14 December 2012 can continue with that absence. However, any absence starting on or after 1 January 2013 will be under the new rules (generally 6 weeks).

1 July 2012 changes to 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).

Except for a manifest grant, DSP recipients applying for indefinite portability under these provisions are required to undergo a portability assessment which includes the JCA processes. For a person to meet the DSP portability work capacity test they need to be assessed as having no future work capacity. This requirement will be met, if the JCA indicates that, based on the evidence and the assessor's professional opinion, it is unlikely that the person will have any capacity to undertake work in the open employment market at or above the relevant minimum wage in the next 5 years, even with interventions.

DSP recipients who apply for portability under these provisions while in Australia, are required to undergo a portability assessment before departure. Generally, those recipients who apply while overseas will need to return to Australia to undergo portability assessment. An exception to the requirement to return to Australia for an assessment will apply where a DSP recipient is unable to return to Australia because they have had a serious accident, or been hospitalised, before the end of their current portability period.

Act reference: SSAct section 1218AAA Unlimited portability period for DSP-severely impaired disability support pensioner, section 94(3B) Severe impairment

Policy reference: SS Guide 7.1.2.10 General rules of portability, 7.1.2.20 Application of portability rules (portability table)

1 July 2011 changes to portability provisions 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.

Act reference: SSAct section 1218AB Extended portability period for DSP

DSP savings provisions introduced on 1 July 2004

DSP recipients who were outside Australia immediately before 1 July 2004 with unlimited portability may keep that unlimited portability for any departure on or after 1 July 2004 providing they have not returned to Australia for permanent residence.

If these recipients return temporarily, they will not be entitled to ancillary payments such as RA and PhA, or 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 will lose the savings provision and any new absence will be under the new rules.

If DSP recipients continue to be payable indefinitely under this savings provision, they will retain their previous proportional rate exemptions and rules (including pre 20 September 2000 rules if applicable).

Act reference: SSAct Schedule 1A clause 135 Unlimited maximum portability period for DSP

Provisions introduced on 20 September 2000 (continue to apply from 1 January 2013)

If extreme circumstances beyond the recipient's control arise after departure and prevent a recipient, who has a limited portability period, from returning to Australia the portability period may be extended under the Secretary's discretionary waiver 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.

Act reference: SSAct Schedule 1A clause 128 Saving provision-portability rules relating to rates of pension

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

Age, entitled WP and entitled WidB 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 to be paid their portable pensions under the pre 20 September 2000 rules.

Age and WidB 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) will not have their rate proportionalised. In some circumstances Age and WidB recipients can use their partner's (or former partner's) AWLR in determining their proportional rate.

Note: The above rules MAY also continue to apply to DSP 'saved' 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, and wife and WidB pensioners who are not entitled may still have their 20 September 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 have not since returned for more than 26 weeks although they have 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 6 weeks portability for any departure commencing on or after 1 January 2013.

Note: The following exemptions from proportionality were not altered by either the 20 September 2000, 1 July 2004 or 1 January 2013 changes:

  • recipients who are receiving DSP because they became unable to work or permanently blind while they were Australian residents (can only apply to DSP recipients who are actually payable long-term, e.g. terminally ill or severely impaired, or saved 1 July 2004, residing overseas), or
  • recipients who became qualified for BVA or WidB because of the death of the recipient's partner who was an Australian resident.

Act reference: SSAct section 1220B(2) Proportionality-DSP rate for a severely disabled person, section 1221(2) Proportionality-WP and WidB rate for entitled persons, Schedule 1A clause 128 Saving provision-portability rules relating to rates of pension

Former residents

People who reside outside Australia being paid under an agreement, who return to Australia for residence and are transferred back to autonomous are to be assessed as a 'former resident'. If they leave Australia again within 2 years (of resuming Australian residence) they will be considered former residents and autonomous entitlement stops on departure (they can be transferred back to an agreement if they're returning to an agreement country).

Act reference: SSAct section 1220 No portability where claim based on short residence

Policy reference: SS Guide 3.1.1 Residence Requirements

Last reviewed: 12 August 2019