Superannuation and Pension-CONFUSED.

[Aussiebird]

Hi everyone,

I am quite confused between the UK pension and the Australian pension and how they both work?

I hope to be living permanently again in Australia in the next 1-2 years.  I am an Australian Citizen and I will be 50 in November.

Once I arrive, is the Australian pension like the UK pension, (deducted from your wages then when retired, you claim it?)

I have read you have to be resident in Australia for 10 years prior to retirement,  but is that living and working in Australia in that 10 year period? (Plus any other time resided and working in Australia in previous years?

I dont really understand about superannuation in Australia.

 

Many thanks in advance.

[newjez]

Superannuation is just like a contribution pension scheme in the UK. 

Both countries have government pensions.

I didn't think the Australian required ten years, I thought you just needed to be resident and a citizen.

The UK government one will depend on how long you have worked.

Not an expert, but I'm sure one will be along.

Edited July 18, 2019 by newjez

[Aussiebird]

7 minutes ago, newjez said:

Superannuation is just like a contribution pension scheme in the UK. 

Both countries have government pensions.

I didn't think the Australian required ten years, I thought you just needed to be resident and a citizen.

The UK government one will depend on how long you have worked.

Not an expert, but I'm sure one will be along.

So the super is deducted from your earnings?

I suppose if i only work for the remaining 16 years + in Australia  then i would have not paid much super towards a pension and therefore not a great deal to live on in retirement!

[newjez]

2 hours ago, Aussiebird said:

So the super is deducted from your earnings?

I suppose if i only work for the remaining 16 years + in Australia  then i would have not paid much super towards a pension and therefore not a great deal to live on in retirement!

Have you not been paying into a UK pension scheme?

[Nemesis]

2 hours ago, Aussiebird said:

So the super is deducted from your earnings?

I suppose if i only work for the remaining 16 years + in Australia  then i would have not paid much super towards a pension and therefore not a great deal to live on in retirement!

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension

That link has details for the Aged Pension (equivalenttoUK State Pension.

All employers must pay into a Super fund for you, and contributions are also made by you, from your salary

[Aussiebird]

15 minutes ago, newjez said:

Have you not been paying into a UK pension scheme?

Yes i do, it's an NHS pension and ive got 30/35 national insurance contributions. 

[Aussiebird]

17 minutes ago, Nemesis said:

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension

That link has details for the Aged Pension (equivalenttoUK State Pension.

All employers must pay into a Super fund for you, and contributions are also made by you, from your salary

Thank you. I would be refering to couples as I'm married.

[Aussiebird]

Also, as my husband has just mentioned, if you do not work in Australia, there would be no super, so would you just get the age pension at retirement.  We are hard working but he is referring to not working through ill health or disability?

[Amber Snowball]

The aged pension in Australia is means tested a well. Worth noting.

[Aussiebird]

9 minutes ago, Amber Snowball said:

The aged pension in Australia is means tested a well. Worth noting.

Does that mean if for example, you own your property with no mortgage, that would be an asset and that would be taken into account as means tested? Is your income means tested too? So the more you earn, the less age pension you get?

[Amber Snowball]

Just now, Aussiebird said:

Does that mean if for example, you own your property with no mortgage, that would be an asset and that would be taken into account as means tested? Is your income means tested too? So the more you earn, the less age pension you get?

Yes.

If you look at the link that nemesis posted above it explains all of it.

[Parley]

10 minutes ago, Amber Snowball said:

Yes.

If you look at the link that nemesis posted above it explains all of it.

Your own home is exempt from the assets test.

[Amber Snowball]

3 minutes ago, Parley said:

Your own home is exempt from the assets test.

Yes, it’s assets over and above that. The link has a table with the amounts. 

ETA. Lazy typing on my part, the touch screen on my iPad is not responding very well!

Edited July 18, 2019 by Amber Snowball

[Aussiebird]

So basically, we would get age pension, plus super, plus our uk state and nhs pensions. These factors are so important in planning a future in Australia, its not just a case of up sticks and move, its about how you are going to survive financially in the future. 

Thank you for all the replies, i appreciate it.  Xx

[Amber Snowball]

You’ll get your NHS Pension, UK state pension, Australian superannuation and then you may qualify for the Australian state pension depending on how much the first 3 are worth.

[Aussiebird]

8 minutes ago, Amber Snowball said:

You’ll get your NHS Pension, UK state pension, Australian superannuation and then you may qualify for the Australian state pension depending on how much the first 3 are worth.

This could be tricky, if our uk ones are not worth much and i think they will be frozen once we leave the UK,  we will only get what they are worth at the time of leaving, so we may get age pension in Oz. So our uk ones will be regarded as an income.

Edited July 18, 2019 by Aussiebird

[Quoll]

1 hour ago, Aussiebird said:

This could be tricky, if our uk ones are not worth much and i think they will be frozen once we leave the UK,  we will only get what they are worth at the time of leaving, so we may get age pension in Oz. So our uk ones will be regarded as an income.

Only your UK age pension is frozen at the rate at which you leave UK. Private pensions are treated however they are treated in UK.

You will need to have been resident in Australia for at least 10 years of which at least 5 must be continuous. 

Your income from UK pensions may well put you beyond the means test threshold.

The Australian Age benefit isn't an entitlement but a welfare payment, quite different from UK age pension.  If you have any working years left you can maximise any superannuation by putting more into the pot than the minimum, and if you salary sacrifice you can make it worth even more. 

[Marisawright]

2 hours ago, Aussiebird said:

So basically, we would get age pension, plus super, plus our uk state and nhs pensions. These factors are so important in planning a future in Australia, its not just a case of up sticks and move, its about how you are going to survive financially in the future. 

At a guess, if you've still got 16 years to go before official retirement age, you're in the best possible position. 

16 years is still a good amount of time to be putting money into superannuation and you can choose to ask your employer to pay in extra from your salary (called "salary sacrifice"), if you can afford it - which also lets you reduce your tax bill.  

You've got money from a private pension in the UK which you can get paid as a pension in Australia.

You'll be able to claim your UK state pension when you reach retirement age, though it will stay at the same rate forever (being overseas, the amount is fixed and you don't get any increases).

With all that in hand, it's quite likely you'll have too much in superannuation and pensions to qualify for the Australian state pension - but if you run short in your old age, you'll be able to claim it, because you only need 10 years residency to be eligible (provided you don't go and live overseas again).

 

[newjez]

4 hours ago, Marisawright said:

At a guess, if you've still got 16 years to go before official retirement age, you're in the best possible position. 

16 years is still a good amount of time to be putting money into superannuation and you can choose to ask your employer to pay in extra from your salary (called "salary sacrifice"), if you can afford it - which also lets you reduce your tax bill.  

You've got money from a private pension in the UK which you can get paid as a pension in Australia.

You'll be able to claim your UK state pension when you reach retirement age, though it will stay at the same rate forever (being overseas, the amount is fixed and you don't get any increases).

With all that in hand, it's quite likely you'll have too much in superannuation and pensions to qualify for the Australian state pension - but if you run short in your old age, you'll be able to claim it, because you only need 10 years residency to be eligible (provided you don't go and live overseas again).

 

Is the ten years any ten years Marisa, or ten years prior to making your claim?

[newjez]

6 hours ago, Aussiebird said:

This could be tricky, if our uk ones are not worth much and i think they will be frozen once we leave the UK,  we will only get what they are worth at the time of leaving, so we may get age pension in Oz. So our uk ones will be regarded as an income.

You will need to consider exchange rate variations, as these can affect your 'fixed income'. There are ways of reducing this risk, ie moving your UK pension into your super, but these would be best discussed with a financial advisor.

[Aussiebird]

16 hours ago, Marisawright said:

At a guess, if you've still got 16 years to go before official retirement age, you're in the best possible position. 

16 years is still a good amount of time to be putting money into superannuation and you can choose to ask your employer to pay in extra from your salary (called "salary sacrifice"), if you can afford it - which also lets you reduce your tax bill.  

You've got money from a private pension in the UK which you can get paid as a pension in Australia.

You'll be able to claim your UK state pension when you reach retirement age, though it will stay at the same rate forever (being overseas, the amount is fixed and you don't get any increases).

With all that in hand, it's quite likely you'll have too much in superannuation and pensions to qualify for the Australian state pension - but if you run short in your old age, you'll be able to claim it, because you only need 10 years residency to be eligible (provided you don't go and live overseas again).

 

Thanks Marisawright. Very informative. If one doesn't work though (for example) there's no superannuation so does that mean no state pension? How do pensioners live if they havent worked? (Even for a period of time).  You never know whats round the corner in life, so have to think of all eventualities. 

[Marisawright]

7 hours ago, Aussiebird said:

Thanks Marisawright. Very informative. If one doesn't work though (for example) there's no superannuation so does that mean no state pension? How do pensioners live if they havent worked? (Even for a period of time).  You never know whats round the corner in life, so have to think of all eventualities. 

The state pension is based on number of years residence in Australia, not the number of years worked.  

If you're living in Australia, then you only need to have lived in Australia for ten years before you are eligible.  If you decide to go back overseas, the requirement shoots up to 35 years.

The state pension is means-tested, it's only meant for people who can't afford to support themselves in retirement.  Even in Australia that's widely misunderstood, and a lot of people see their superannuation as a nest egg to pass on to their kids, rather than the money that's supposed to give them their pension.  

[DT55]

On 19/07/2019 at 08:21, Quoll said:

Only your UK age pension is frozen at the rate at which you leave UK. Private pensions are treated however they are treated in UK.

You will need to have been resident in Australia for at least 10 years of which at least 5 must be continuous. 

Your income from UK pensions may well put you beyond the means test threshold.

The Australian Age benefit isn't an entitlement but a welfare payment, quite different from UK age pension.  If you have any working years left you can maximise any superannuation by putting more into the pot than the minimum, and if you salary sacrifice you can make it worth even more. 

Is your age pension frozen when you leave the Uk or is frozen when you first claim it ie when you turn 67? Could make a big difference. Thanks

[Gbye grey sky]

12 minutes ago, DT55 said:

Is your age pension frozen when you leave the Uk or is frozen when you first claim it ie when you turn 67? Could make a big difference. Thanks

When you claim it.