surfersj Posted March 31, 2021 Share Posted March 31, 2021 We are a married retired couple from Scotland who migrated to Queensland on a CPV 18 months ago. Much as we knew the situation about our UK state pensions being frozen I think this is a disgrace - because we moved to Australia and not for example Spain or Florida where we would benefit from annual pension increases. More so having contributed to NI for 47 years. However I guess rules are rules! I have read on this forum that we are entitled to the Australian age pension after 10 years of permanent residency but subject to income and assets assessment. Can this really be true?? Why should Australia help us out when our UK government cannot? In a reverse situation would the UK government consider giving an Australian expat living in the UK, a pension in retirement? Quote Link to comment Share on other sites More sharing options...
Marisawright Posted March 31, 2021 Share Posted March 31, 2021 7 minutes ago, surfersj said: I have read on this forum that we are entitled to the Australian age pension after 10 years of permanent residency but subject to income and assets assessment. Can this really be true?? Why should Australia help us out when our UK government cannot? Australians don't pay the equivalent of NI contributions towards a pension. The Australian age pension is a welfare benefit, like the dole, designed only for retirees who need a hand in their old age. Once you've been here 10 years, you're entitled to the same level of assistance like any other Australian. 2 Quote Link to comment Share on other sites More sharing options...
Parley Posted March 31, 2021 Share Posted March 31, 2021 (edited) And we pay a lot more than the UK does. Bear in mind you may not get a full Australian Age Pension. Your UK pension will be taken into account. But you will be better off than just getting one. Edited March 31, 2021 by Parley 1 Quote Link to comment Share on other sites More sharing options...
LindaH27 Posted March 31, 2021 Share Posted March 31, 2021 Australia aged pension is a bit like Income support / pension credit in UK. But I “think” Australia is more comprehensive in looking at what you have - eg I “think” it also takes the house/car into consideration as well as income and savings. Up till a few years ago Australia had a reciprocal agreement with UK for them to top up each other’s citizens pensions . However UK ended this so that’s why you don’t get your pension increased now. Also heard that if you do get Australia Aged pension they reduce it by 50% on whatever you get from UK but obviously I don’t know enough about it and would advise getting proper information. 2 Quote Link to comment Share on other sites More sharing options...
Marisawright Posted March 31, 2021 Share Posted March 31, 2021 9 minutes ago, LindaH27 said: Australia aged pension is a bit like Income support / pension credit in UK. But I “think” Australia is more comprehensive in looking at what you have - eg I “think” it also takes the house/car into consideration as well as income and savings. Up till a few years ago Australia had a reciprocal agreement with UK for them to top up each other’s citizens pensions . However UK ended this so that’s why you don’t get your pension increased now. Also heard that if you do get Australia Aged pension they reduce it by 50% on whatever you get from UK but obviously I don’t know enough about it and would advise getting proper information. It’s more than a few years. It was 2001 1 Quote Link to comment Share on other sites More sharing options...
LindaH27 Posted March 31, 2021 Share Posted March 31, 2021 35 minutes ago, Marisawright said: It’s more than a few years. It was 2001 Thanks Marisa! Time seems to fly past quicker as you get older! Is the rest of the tentative info I put up correct? TIA Quote Link to comment Share on other sites More sharing options...
surfersj Posted March 31, 2021 Author Share Posted March 31, 2021 We are more than 8 years away from this even being relevant for us! But in the meantime having looked further on Centrelink website and other internet sources it looks like two separate calculations are done - one for income and one for assets - and the one that gives the lowest result (least pension) is the one that is used. For assets, the home that you live in is not included. Your car and other possessions are included but at a value much below market value. And, more for Aussies, your Superannuation value is included. So unless you are a millionaire or have a property portfolio etc for most UK expats it would likely be the income test that is used to calculate entitlement. For savings, Centrelink will calculate income from interest earned together with UK state pension and any private pension income before arriving at a figure. From what I can see, the maximum age pension for a couple is $37,000 but you would only receive the maximum if your income as a couple was below $8,200 per year. So, effectively you will get nowhere near this amount as a couple on the UK state pension earn about $30,000 plus potentially a private pension. The income level whereby you are entitled to zero age pension is $82,000 for a couple. I am not totally clear how they calculate your entitlement when earnings amounts between the lower and upper limits of $8200 and $82000 The above is my own interpretation and as usual, need to do your own research or get professional advice to be sure. Quote Link to comment Share on other sites More sharing options...
Skani Posted April 1, 2021 Share Posted April 1, 2021 18 hours ago, surfersj said: I am not totally clear how they calculate your entitlement when earnings amounts between the lower and upper limits of $8200 and $82000 For a couple the pension will be reduced by 50 cents for each dollar of other income over $316 per fortnight. Quote Link to comment Share on other sites More sharing options...
surfersj Posted April 1, 2021 Author Share Posted April 1, 2021 Thank you Skani. Are you aware of the "work bonus" and how this may affect the calculation? Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 1, 2021 Share Posted April 1, 2021 On 31/03/2021 at 19:58, LindaH27 said: Thanks Marisa! Time seems to fly past quicker as you get older! Is the rest of the tentative info I put up correct? TIA @LindaH27, not quite. A lot of countries have reciprocal agreements, which (if I'm understanding it correctly) means that when you move countries, you're eligible for a pension in your new country, but all the years you lived/worked in your old country count towards that pension. So if you move from Australia to Italy, say, you actually get an Italian pension, (not an Australian one), but based on your whole work history. I'm not quite sure which country pays how much towards it, if you know what it mean. The UK and Australia used to have an agreement but it lapsed in 2001 and they've never managed to agree another one. The result is different in each country. For Brits, if you move to Australia, your British aged pension is frozen at the rate on the day you leave. You can apply to get the full amount while you're on holidays in the UK but it goes back to normal when you come back to Oz. You can imagine how little a frozen pension is worth 20 years down the track. For Australians, if you move to the UK before you're receiving the Australian aged pension, you're out of luck - you can't claim a new Australian pension while you're overseas, so you'll never be able to get it. You'd have to return to Australia at pension age AND live there for at least 2 years to be eligible. This is a big trap for Brits who'd like to retire back in the UK. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 1, 2021 Share Posted April 1, 2021 On 31/03/2021 at 20:57, surfersj said: We are more than 8 years away from this even being relevant for us! But in the meantime having looked further on Centrelink website and other internet sources it looks like two separate calculations are done - one for income and one for assets - and the one that gives the lowest result (least pension) is the one that is used. I don't think that is correct. It is a combination of the two, AFAIK. This calculator is a good one: http://yourpension.com.au/APCalc/index.html Quote Link to comment Share on other sites More sharing options...
JetBlast Posted April 1, 2021 Share Posted April 1, 2021 19 minutes ago, Marisawright said: @LindaH27You can imagine how little a frozen pension is worth 20 years down the track. This is what I was thinking about last light. I left the UK when I was 28. I paid a pension since is was 16, so only 12 years of contributions. I am wondering it it's worth keeping up with NI payments? Quote Link to comment Share on other sites More sharing options...
Skani Posted April 1, 2021 Share Posted April 1, 2021 11 hours ago, surfersj said: Thank you Skani. Are you aware of the "work bonus" and how this may affect the calculation? Some income from active employment is exempt from Centrelink's "other income" calculation for the pension. Currently it's the first $300 per fortnight from employment income. Quote Link to comment Share on other sites More sharing options...
ramot Posted April 1, 2021 Share Posted April 1, 2021 36 minutes ago, Marisawright said: The UK and Australia used to have an agreement but it lapsed in 2001 and they've never managed to agree another one. The result is different in each country. For Brits, if you move to Australia, your British aged pension is frozen at the rate on the day you leave. You can apply to get the full amount while you're on holidays in the UK but it goes back to normal when you come back to Oz. You can imagine how little a frozen pension is worth 20 years down the track. Reference freezing the UK state pension, I am 16 years down the track from initially receiving it, of course it’s frozen, but it’s still a welcome amount. The injustice? Of freezing the pension has sadly been challenged several times, with no success so far. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 5, 2021 Share Posted April 5, 2021 On 02/04/2021 at 09:07, JetBlast said: This is what I was thinking about last light. I left the UK when I was 28. I paid a pension since is was 16, so only 12 years of contributions. I am wondering it it's worth keeping up with NI payments? I only had 12 years and I've since done a back payment to double that. Provided I live another 5 years, even at the frozen rate, I will be in profit. 2 Quote Link to comment Share on other sites More sharing options...
ramot Posted April 5, 2021 Share Posted April 5, 2021 1 hour ago, Marisawright said: I only had 12 years and I've since done a back payment to double that. Provided I live another 5 years, even at the frozen rate, I will be in profit. Might depend on how old you are and how many years before you are eligible for the pension, as the retirement age keeps getting older as to how long you will wait to be in profit. I could only pay a back payment for the maximum amount allowed over the 2 years before I was eligible for the pension, and that was 16 years ago, and it only took me 2 years then to be in profit. You could say any money received in retirement helps. I don’t know anything about the different classes of payment if you are younger. 2 Quote Link to comment Share on other sites More sharing options...
LindaH27 Posted April 5, 2021 Share Posted April 5, 2021 35 years are needed for a full UK state pension and at least 10 years to get a minimum pension. So it depends on how old you are as to how many years you can back pay. There used to be some condition that you can only back pay for 6 years as well. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 5, 2021 Share Posted April 5, 2021 2 hours ago, LindaH27 said: There used to be some condition that you can only back pay for 6 years as well. I thought that too, but I was wrong. It's actually "the most recent 6 years", which means you can do it more than once. When we were thinking of retiring to the UK in 2014, I decided to pay up my NI contributions. I got the letter telling me I could backpay the last 6 years and I did that. Fast forward to 2020 and I stumbled across a Which article about topping up your pension. Lo and behold, I could pay another 6 years. 1 Quote Link to comment Share on other sites More sharing options...
palaceboy1 Posted April 5, 2021 Share Posted April 5, 2021 2 hours ago, LindaH27 said: 35 years are needed for a full UK state pension and at least 10 years to get a minimum pension. So it depends on how old you are as to how many years you can back pay. There used to be some condition that you can only back pay for 6 years as well. And if you live in Australia it will be frozen at the date you first receive it 1 Quote Link to comment Share on other sites More sharing options...
Wanderer Returns Posted April 5, 2021 Share Posted April 5, 2021 2 hours ago, LindaH27 said: 35 years are needed for a full UK state pension and at least 10 years to get a minimum pension. So it depends on how old you are as to how many years you can back pay. There used to be some condition that you can only back pay for 6 years as well. That's what I used to think, but it's not correct. I opted out of SERPS back in the 90s and now I need 37 years for a full UK state pension (I currently have 26). You can also need as little as 30 years depending on the type (class?) of contributions you've been making. I believe that was the case for @Lavers when he asked this question some time ago. They say you can only back-pay 6-7 years, but again, it depends on your circumstances. If I log into my UK Government Gateway account I can see that I can still pay up tax years more than 10 years ago, if I wish. I've decided I'm not going to pay any more until I'm almost 67, and then pay as many years as I can then. If it's still 6-7 years then I will have a full UK state pension (or something close to that). It would be a tragedy to pay it now and then die in the next 14 years - my wife would never forgive me! Quote Link to comment Share on other sites More sharing options...
LindaH27 Posted April 5, 2021 Share Posted April 5, 2021 47 minutes ago, Wanderer Returns said: That's what I used to think, but it's not correct. I opted out of SERPS back in the 90s and now I need 37 years for a full UK state pension (I currently have 26). You can also need as little as 30 years depending on the type (class?) of contributions you've been making. I believe that was the case for @Lavers when he asked this question some time ago. They say you can only back-pay 6-7 years, but again, it depends on your circumstances. If I log into my UK Government Gateway account I can see that I can still pay up tax years more than 10 years ago, if I wish. I've decided I'm not going to pay any more until I'm almost 67, and then pay as many years as I can then. If it's still 6-7 years then I will have a full UK state pension (or something close to that). It would be a tragedy to pay it now and then die in the next 14 years - my wife would never forgive me! Not sure why you think you need 37 years? According to government site it says 35 Quote Link to comment Share on other sites More sharing options...
Ken Posted April 5, 2021 Share Posted April 5, 2021 On 31/03/2021 at 15:24, surfersj said: Why should Australia help us out when our UK government cannot? In a reverse situation would the UK government consider giving an Australian expat living in the UK, a pension in retirement? Why would the UK government help you out when you are going to spend their money in Australia and not in the UK? The UK government does give social security benefits (although not the old age pension itself) to people who have worked their entire lives overseas (e.g. in Australia) but now live in the UK. Note that they would need UK residency (so be British citizens or have some equivalent of a CPV) and to have been resident for at least 2 years for most benefits. The UK government can afford to pay those social security benefits as they are going to be spent in the UK and so the government will recover much of it from VAT and taxes on the companies and employees of those companies that it is spent on even if there is no multiplier effect - it's not like when a pension is sent overseas and never seen again. The UK government has long attempted to confuse UK voters by calling one of it's taxes "National Insurance" rather than the more accurate "Additional Income Tax" that it really is, leading many British tax payers they are getting their own money back when the pension is paid rather than the social security benefit that it actually is. In Australia in comparison they make it very clear that the Aged Pension is a social security benefit. There is no ring fencing of National Insurance, it all goes in to exactly the same Treasury account as Income Tax. It doesn't get invested for your retirement and the pension is paid out from current tax (and NI) receipts. The UK government could decide to stop paying pensions to anyone overseas it it wanted to (well technically anyone in the UK too - but those pensioners live in their constituencies and vote) and might have to as the whole system has always been one huge Ponzi scheme. 3 Quote Link to comment Share on other sites More sharing options...
surfersj Posted April 5, 2021 Author Share Posted April 5, 2021 Only looking for the same annual increase in the state pension that I have earned just as someone retiring in Florida or Spain would get 1 Quote Link to comment Share on other sites More sharing options...
Ken Posted April 5, 2021 Share Posted April 5, 2021 2 minutes ago, surfersj said: Only looking for the same annual increase in the state pension that I have earned just as someone retiring in Florida or Spain would get The US and Spain have mutual agreements with the UK whereas Australia refuses to pay anything for people who worked for 30 years in Australia but then retired in the UK. 1 Quote Link to comment Share on other sites More sharing options...
Tulip1 Posted April 5, 2021 Share Posted April 5, 2021 14 minutes ago, LindaH27 said: Not sure why you think you need 37 years? According to government site it says 35 There is something about when you opt out of serps you get less state pension/it effects it in some way. I’m not sure exactly what but there is definitely something like you can potentially get less (which would perhaps fit with needing more years to get the same) 1 Quote Link to comment Share on other sites More sharing options...
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