7.3.2 CFP Exemptions

Summary

If there is a possibility that a person may not be entitled to a CFP, it should be considered before the person is issued a notice so that ongoing foreign claim action can cease at an early stage. Once a person is issued a notice, non-compliance with the requirement to take reasonable action to obtain CFP can only result in:

  • suspension or cancellation of the Australian payment,
  • rejection of claim for Australian payment, and
  • exemption from the CFP requirement.

Reasons for an exemption

Once a notice has been issued the reasons for granting an exemption to claim a CFP are as follows:

  • The delegate is satisfied that a person is not entitled to claim a comparable foreign pension under the law of the claim country or that the pension cannot be paid in Australia due to foreign exchange restrictions or other economic or political restrictions.
  • The delegate is satisfied that a person would be entitled to a CFP but the person's state of health is such that they could not reasonably be expected to provide the information needed to assess entitlement and there is no other person available to assist with the claim process.
    • Example: Persons with dementia or other serious ongoing illness.
  • The delegate is satisfied that the person would be entitled to a CFP but the person would be traumatised, or there would be other adverse health effects on the person from any requirement necessitating contact with the authorities in the CFP claim country. The person may object to contacting the authorities of the CFP claim country on the grounds that such contact may lead to persecution, by the authorities of the CFP claim country and thus jeopardise their safety or the safety of another person. In all circumstances, the person's objection must appear reasonable.
    • Example: A person who fled the CFP claim country for political reasons and insists that all ties with that country have been severed.
  • The delegate is satisfied that the person would be entitled to a CFP but the person is elderly and the claim would be likely to yield a CFP at a rate that would not materially affect their Australian pension entitlement.

Person has a serious illness

Any request for an exemption from the requirement to claim a CFP, on the grounds of ill health should be supported by a certificate a statement or a letter from a health care professional.

Examples: A doctor, a social worker, the manager of a health care facility or a trained nurse.

Person is elderly with a minimal CFP amount

If a person is over 80 years of age, consideration should be given to exempting them from the requirement to claim but ONLY if the CFP entitlement arises from contributions of:

  • 5 years or less, AND the extra income needed to affect the rate of Australian pension is $500.00 a year or more, or
  • between 5 and 10 years and the extra income needed to affect the rate of Australian pension is $1,000 a year or more. In this case the person must be advised of the possibility of CFP entitlement and that Centrelink can help them claim it if they want to, or
  • between 10 and 15 years and the extra income needed to affect the rate of Australian pension is $1,500 a year or more. In this case people must be advised of the possibility of CFP entitlement and that Centrelink can help them claim it if they want to. If they still do NOT claim the CFP, they will be required to sign an authority for Centrelink to obtain information about possible entitlements from the authority in the agreement country.

Explanation: An authority for Centrelink to obtain information should contain the following information:

  • 'I, (name of person) authorise (name of overseas authority, {e.g. the Maltese Department of Social Security}) to give Centrelink in Australia the information it needs to determine my entitlement to Australian pension.'

If a person IS EXEMPTED from the requirement to claim a CFP and an authority is obtained, full details, together with the authority, should be forwarded to CIS in Hobart with a request for CIS to check that the person does not already receive a payment from the CFP claim country.

If a person is considered for exemption from the CFP provisions under the last situation, BUT declines to claim the CFP voluntarily and refuses to sign an authority, the CFP provisions must be applied in accordance with normal procedure. If an exemption is to be considered in line with those procedures, it can only be considered because of illness or political reason.

Political reasons

A person CANNOT be exempted from the CFP requirements on the basis of:

  • a claim that the person has severed all ties with the agreement country, or
  • not recognising the validity or existence of that country.

However, if the Secretary's delegate is satisfied that a person has a well founded fear of persecution if they were to lodge a claim for a CFP, then the delegate CAN decide not to require the person to claim or pursue the CFP.

Explanation: 'Persecution' is when a country or an organised group breaches a person's basic human rights.

Example: If by claiming a CFP the person would risk immediate and serious threat to life, health or well being, of the person or that person's immediate family (other than economic wellbeing), the person should be exempted from the CFP requirement.

Fear must be well founded

The fear of persecution must be well founded to be a valid reason for exemption from the CFP requirements. There must be sufficient evidence of actual or likely persecution to satisfy an objective third person.

If the fear of persecution is NOT well founded, but the person believes so strongly that persecution is likely that their health would be seriously affected if required to comply with CFP requirements, consideration should be given to granting an exemption. Exempting a person from the requirement to claim CFP on medical grounds is subject to a statement or certificate being provided.

Notifying the person of an exemption

A person should be advised as soon as a decision is made to exempt them from the requirement to claim a CFP.

Duration of exemption

The exemption is not indefinite. If the reason for which the exemption was given ceases to apply, the person may then be required to take reasonable steps to claim the CFP.

Last reviewed: 21 September 2015