7.3.1 CFP legislation & requirements

Summary

Recipients or claimants of certain Australian social security payments who are likely to be entitled to a CFP (1.1.C.230) from another country may be required to take reasonable action to claim the CFP at the highest rate available to them.

The CFP requirements are designed to ensure that Australian social security recipients access all available overseas income streams to reduce their dependence on Australia's social security system and generally improve their overall income.

CFP history

The CFP legislation was introduced on 20 March 1994 in relation to foreign payments from agreement countries only.

The relevant provisions were transferred to the SS(Admin)Act with effect from 20 March 2000, still for foreign payments from agreement countries only.

From 20 September 2000, the requirement to claim a CFP was extended to foreign payments from non-agreement countries.

Note: Former New Zealand residents, residing in Australia and who were in receipt of an Australian social security payment on 30 June 2002 are not required to lodge a claim for New Zealand CFPs as long as they continue to reside in Australia and continue to remain on an Australian social security payment. This also includes those who transfer to a new payment (for example, transfer from DSP to Age).

Former New Zealand residents, residing in Australia, who lodge a claim for Age or DSP (limited to those who are severely disabled) after 30 June 2002, are required to claim an equivalent New Zealand payment under the CFP requirements. The Social Security Agreement with New Zealand provides access to NZS, New Zealand Veterans Pension and New Zealand Supported Living Payment. Other New Zealand payments are not exported overseas and consequently a person is not required to claim them under CFP legislation.

For comprehensive information on agreement and non-agreement countries go to the International Services page on the Services Australia website.

CFP requirements

The requirement to claim a CFP may apply to people who claim or receive one of the following social security payments and/or to their partner, who may be a non-pensioner partner (1.1.P.85):

• age pension
• disability support pension
• carer payment, and
• parenting payment.

Note: The requirement previously applied to WP and WidB which ceased from 20 March 2020, and WA which ceased from 1 January 2022.

For agreement countries, recipients or claimants of any age may be required to claim any entitlement to a CFP.

For non-agreement countries, the requirement is limited to recipients or claimants of Australian age pension age. These recipients or claimants may be required to claim any entitlements to age, invalidity and survivor pensions, together with company pensions and superannuation from a non-agreement country. Recipients or claimants below Australian age pension age are encouraged (but not required) to claim any entitlements from a non-agreement country. They may be required to claim the CFP once they reach age pension age.

Note: Survivors' pensions may be paid to a person who has no direct affiliation with the social security scheme of the country in question. That is, a survivor pension may be paid to a surviving partner even if the partner has never been to the other country. Partner payments or supplements may also be paid even if the recipient has no connection with the country.

CFP requirements will only apply if Centrelink issues the recipient a legal notice to this effect (7.3.3). A person may be exempt from the requirement to claim a CFP in some cases (7.3.2).

Agreement embargo provisions

The embargo provisions in most agreements allow Australia to advise the agreement country, at the time an Australian person lodges a claim for a pension from that country, that Centrelink may have a claim on any arrears payment. This process is called embargoing the arrears.