Travelling and your pension: know the risks
Older Australians love to travel — and retirement is the perfect opportunity to visit loved ones, and see more of the world. If you receive the age pension, however, overseas travel could affect your payments, so it’s worth understanding the rules before you step onto a plane or cruise ship.
Domestic travel is straightforward: grey nomads can dizzy themselves with laps of Australia and their age pension will not be affected. But travel overseas — especially for a decent chunk of time — and your age pension may be reduced.
“Age pensioners can generally receive their payment for the whole time they’re outside Australia, even if they go to live in another country,” says Hank Jongen, General Manager of the Department of Human Services.
“However, the payment rate may change depending on how long a pensioner is away, whether their income and assets change, or if they receive their Australian age pension through a social security agreement with another country.”
The all-important six week mark
Travel for less than six weeks — 42 days and under — and your pension rate won’t change.
“After six weeks travelling outside Australia, the pension supplement will reduce to the basic rate and the energy supplement will stop,” Jongen says.
However, if an age pensioner is moving overseas to live, the pension supplement will automatically reduce to the basic rate and the energy supplement will stop as soon as they leave Australia, he says.
“Migrant pensioners” and longer trips
After 26 weeks outside the country, a person’s age pension payment rate will depend on how long they have lived in Australia.
If an age pensioner has been an Australian resident for 35 years or more between the age of 16 and age pension age, their payment rate normally won’t change beyond what it already has at the six week mark.
Where an age pensioner has been an Australian resident for less than 35 years, they’ll receive a lower, proportional payment rate.
“Some other additional payments such as rent assistance will stop after 26 weeks outside Australia,” Jongen says.
Share your travel plans
Age pensioners need to tell the Department of Human Services if they are going to live in another country or will be overseas for longer than six weeks.
“The easiest way for age pensioners to tell the Department about their travel plans is by using their Centrelink online account through myGov,” he says.
A word of warning
If you have informed Centrelink about your sojourn, it’s worth keeping an eye on your payments to make sure you are receiving what you expect.
A WYZA member from Tasmania was recently left furious after informing Centrelink of her plans to travel overseas.
Not long after Julia Bestwick told Centrelink of her New Zealand travel dates via the myGov website, she received a call from a Centrelink representative saying her age pension would cease after 28 days away.
“I was astonished. He told me that my pension would cease to be paid two days before I returned to Australia because it was only payable for a total time overseas of 28 days in a 13-week period,” she said.
Not to be beaten, Ms Bestwick wrote a letter expressing her astonishment to prime minister Malcolm Turnbull and copied in several other members of parliament. She also sent her letter to WYZA.
Three weeks later, she received a call from a Centrelink representative who explained that the information she had received was incorrect.
“I was advised that my informant was completely wrong and there was no basis for him to contact me at all, and offered an apology,” said the 71-year-old.
“It was very distressing, as you can tell from my letter. Perhaps he was new and testing his wings.”
Fortunately, the misunderstanding was resolved but it’s a reminder to Centrelink customers that government departments do make mistakes. If you have a feeling that you’ve been given incorrect information, it’s worth double-checking.
And if you’re still not happy — you can always write a letter to “all and sundry” as Ms Bestwick did.
If you’re on a disability support pension, the rules surrounding overseas travel are different.
If you take an overseas trip, you can only be paid the disability support pension for up to four weeks in a 12-month period. It doesn’t matter if you make a single trip, or multiple trips — if you exceed 28 days overseas in total, you will not receive the disability support pension.
Prior to January 2015, travellers on the disability support pension could stay overseas for six weeks before their payments were cut.
There are exceptions to this rule, however. For example, if you are travelling abroad to receive medical treatment that you can’t get in Australia, you will still receive your payments.
The Department of Human Services website, humanservices.gov.au, has more information about pensioners travelling outside Australia.
Have you travelled overseas while receiving the age pension? Share your experiences in the comments below.