AUSTRALIAN PENSION NEWS
www.centrelink.gov.au email@example.com Volume 22 – April 2008
In this issue Funeral bonds | News from Australia | Swiss Agreement | UK contributions | Rates | Payment dates
I am Senator Joe Ludwig, and I am honoured to have been appointed Minister for Human Services responsible for
Centrelink, following the recent change of Government.
I look forward to working with Centrelink staff to continue providing quality service to all Australians and expatriate
I have represented Queensland in the Australian Senate since 1998. I have previously served in a number of positions in
the Federal Opposition, including Shadow Minister for Justice and Customs, Shadow Minister for Citizenship and
Multicultural Affairs and Shadow Attorney-General.
Before entering Parliament I worked as an industrial inspector, training consultant and industrial advocate and I am a
barrister. I have also served in the Australian Army Reserve for many years.
The Australian Government is committed to providing services and pensions to all eligible people living outside
Australia. We will continue to negotiate social security agreements with countries making it easier for people to claim
Australian pensions while they are away from Australia, and make it easier for Australians to claim pensions from other
countries in which they have lived and worked.
Details of the new agreement with Switzerland are included in this edition. Agreements have also been signed with
Greece, Japan and the Republic of Korea. These agreements will come into effect subject to the passing of legislation
by the Parliaments of both countries. As new agreements are signed, details will be provided in Australian Pension
I urge you to contact Centrelink International Services if you have any questions about your Australian pension. You can
call them at no charge from anywhere in the world, using the telephone numbers on page 4. Centrelink International
Services has a number of interpreters available, speaking a total of 16 languages, and can arrange a telephone
translator for most other languages.
Senator Joe Ludwig,
Minister for Human Services
What is a ‘proportional’ Australian pension?
Many Centrelink customers living outside Australia receive a ‘proportional’ rate of
Australian pension. This means that the rate of pension paid to those customers is based on
their Australian residence, as well as on the amount of their income and assets.
People who are granted an Australian pension under the terms of an international agreement will usually receive a
proportional rate. In addition, many other pensioners who were granted while they were in Australia but have since left
Australia, will find that their pension rate is reduced to a proportional rate after they have been outside Australia for 26
A proportional rate is generally based on the length of time the person was an Australian resident during their ‘working
life’. This is defined as the period between 16 years of age and age pension age during which the person was legally
entitled to remain in Australia (i.e. was an Australian citizen or the holder of an appropriate visa which allows for
permanent residence) and was actually residing in Australia. This length of time is calculated in whole months. If the
person was an Australian resident for at least 300* months (25 years) during their working life, then the full rate of
pension is payable (unless reduced under the income or assets test). However, if the person was an Australian resident
for less than 300 months during their working life, then their rate of pension is generally reduced.
Working life residence is based purely on permanent and legal residence in Australia – it does not matter if the person
was employed or paid taxes for any or none of the period they lived in Australia.
*it is possible that under some future international agreements this figure may be varied.
1. Hayward was granted permanent Australian residence and then lived in Australia for 185 months (15 years
and 5 months) during his working life. His proportional rate of Australian pension would be 185/300ths of his
2. Penni, who is an Australian citizen since birth, lived in Australia for 48 months (4 years) during her working
life. Her proportional rate would be 48/300ths.
A new Social Security Agreement between
Australia and Switzerland
The Social Security Agreement between Australia and Switzerland commenced on 1 January
The Agreement can help people who worked in Switzerland and also lived in Australia to meet the requirements to
qualify for an Australian pension, and overcome the citizenship requirements to qualify for a Swiss pension.
The payments that can be claimed under the Agreement are:
> Australian and Swiss age pensions
> Australian and Swiss disability pensions
> Australian carer pensions
> Australian pensions payable to widowed persons and
> Swiss survivors’ pensions.
If you already receive a pension from either country you do not need to reclaim under the Agreement.
For more information visit the Centrelink website www.centrelink.gov.au for the factsheet Social Security Agreement
between Australia and Switzerland. Claim forms can be obtained from the Centrelink website, from Centrelink
International Services, or from Swiss Social Insurance offices.
Australian funeral bonds are investments that only mature at death, when a payment is
made to cover your funeral expenses.
Changes that took effect on 1 January 2008 will help people make better provision for their funeral arrangements, by
increasing the level of investment in Australian funeral bonds that is excluded from the assessment of your Australian
You can now have one or two Australian funeral bonds that cost up to A$10 000 in total, and the value of these funeral
bonds will not be considered under the assets test, as long as you have not also prepaid your funeral expenses.
The A$10 000 limit will be indexed annually in line with the Australian Consumer Price Index.
Prepaid funeral expenses exist only where you have a contract with a funeral director for agreed funeral services to be
provided. In exchange, you prepay a sum directly to the funeral director or invest it in a funeral bond and assign the
proceeds to the funeral director. In either case, Centrelink does not include any amount of prepaid funeral expenses in
Australian funeral bonds that are not being used to prepay funeral expenses and are not exempt are treated like any
other financial investment. Your share of the current value, including interest, is included in your financial assets and is
considered to be earning income under Australian ‘deeming’ rules (see page 4 for rates and thresholds).
For more information go to www.centrelink.gov.au for the Funeral Expenses - Preparations You Can Make factsheet,
or contact Centrelink International Services (contact details are on page 4).
News from Australia
Here’s some information about events that have happened in Australia or to prominent
Australians over the past few months.
• The Australian federal election on 24 November saw the election of a new Labor Government, led by Prime Minister
Kevin Rudd. The previous Prime Minister, Mr John Howard, was in office for 11 years.
• The Melbourne Cup was won by Efficient, trained by Graeme Rogerson and ridden by Michael Rodd.
• Australia won the Netball World Championship, defeating New Zealand in the final.
• 80 000 fans turned up in Sydney to watch David Beckham’s LA Galaxy football team lose 5-3 to Sydney FC in an
• The Australian Government ratified the Kyoto Protocol on climate change.
• Australia’s cricketers defeated the touring Sri Lankan and Indian Test teams.
• Cyclone Helen and associated severe storms and flooding hit New South Wales, Queensland and Victoria, causing
millions of dollars worth of damage.
• Australian film actor Heath Ledger died in New York, aged 28.
• Australian actress Cate Blanchett was nominated for two Academy Awards.
• The Australian Government opened the first sitting of the Federal Parliament since the election with an apology to the
Indigenous people of Australia for past mistreatment, in particular the mistreatment of those who were the stolen
Prime Minister Rudd apologised for “the laws and policies of successive Parliaments and governments that have
inflicted profound grief, suffering and loss on these our fellow Australians.
We apologise especially for the removal of Aboriginal and Torres Strait Islander children from their families, their
communities and their country”.
• Australia’s A League football (soccer) competition was won by the Newcastle Jets, who defeated the Central Coast
Mariners in the final.
From the Editor’s desk
Welcome to the 22nd issue of Australian Pension News.
At Centrelink we are always striving for improvement and welcome your comments and suggestions. If you write to us
we will try to provide you with an individual reply. In every issue of Australian Pension News we share customer
feedback that demonstrates important issues affecting you. Here are some letters we have received recently.
Letters to the Editor
“When I die, how will Centrelink know to stop sending my pension?” (Y.B., Israel)
While no-one wants to think too much about dying, it is important that your next of kin, or the person who will be
responsible for finalising your affairs, knows that you are getting an Australian pension and remembers to tell Centrelink
as soon as practical after your death. We ask all customers to write down their Customer Reference Number (CRN) and
our contact details, and leave it with their important papers with instructions that we should be contacted when you pass
away. Alternatively, write your CRN on this magazine and leave it with your papers. Payments received after death
should generally not be used by your family or heirs, and should be returned to Centrelink. If there is any doubt about
whether a payment can be used, contact Centrelink International Services to check. If any payments are due to your
beneficiaries, we will send them a new payment.
“I want to be sure Centrelink pays me the right amount of pension, but how do I check that you have recorded
all my income and assets correctly?” (J.C., England)
If you contact Centrelink International Services, we can prepare a detailed statement of your income and assets as we
have them recorded, and send it to you to check. If there is anything that needs to be changed, please ensure you let us
know as soon as possible. You must tell Centrelink of any changes in your income and assets within 28 days.
“Now that Australia has a new Prime Minister, will this affect my Australian pension at all?”
The rules relating to Australian pensions are always under review by the Australian Government, regardless of which
political party is in power. If any changes to pension rules occur that may affect our customers living outside Australia,
we will tell you about the changes in future editions of Australian Pension News. If any major change is made that will
directly affect you, Centrelink will send you a letter explaining the changes and what they might mean for you.
UK voluntary contributions
If you have worked in the United Kingdom (UK) you may be eligible for a British Pension.
The amount you get is based on your National Insurance contributions, and is calculated on the number of full years
contributions you have. This means contributions must have been made for every week of the tax year.
To qualify for a full state pension, men need 44 full years contributions and women need 39 full years. However, anyone
who reaches pension age on or after 6 April 2010 will only need 30 full years to qualify.
In some cases you may find spending a relatively small amount on voluntary contributions will lead to a significant
increase in your State Pension.
To pay voluntary contributions you must have lived in the UK continuously for three years at any time (although time
spent in a country in the European Economic Area or in Turkey may count), and have paid a set amount in contributions
for three years or more.
Most voluntary contributions must be paid within six years of the missing years. It is usually better to pay voluntary
contributions whilst you are working, if you have the opportunity.
If you are considering making additional voluntary contributions to boost your State Pension entitlement, you should
check the full implications of this with both the UK authorities and Centrelink. Increasing the amount of your UK pension
may reduce the amount of Australian pension payable under the Australian income test, however as only a proportion of
any income is considered under the income test, you may be better off by increasing your UK pension rate.
For more information and a downloadable claim form (CF83), see www.hmrc.gov.uk or call the UK Residency Helpline
on +44 191 203 7010.
This information is provided by the UK authorities as a general guide only and should not be treated as a complete and
authoritative statement of the British law.
What you must tell us
There are a number of events and changes in circumstances that you need to tell Centrelink about. You have 28 days to
let us know about the change, starting from the day after the change happens. We need to know about changes for both
yourself and your partner, if you have one. If you are unsure about whether to tell us about an event in your life, please
contact us to find out (our contact details are on page 4).
We need to know about changes to your or your partner’s:
• financial investments
• marital status
• school age dependants
• bank accounts
• international travel plans
• compensation claims
• criminal charges resulting in imprisonment (or if held in custody awaiting trial)
If you do not tell us of changes you may receive too much Australian pension, and will have to repay the amount you
were overpaid. If there has not been any change in your circumstances as outlined above, you do not need to contact
Do you receive a Danish pension?
Centrelink customers receiving a Danish ATP or DSS pension were sent a letter in January requesting that they provide
their 2008 Danish pension statement. This is required so that your Australian pension rate can be correctly calculated. If
you have not provided this information you may receive more or less Australian pension than you should. If you receive
too much Australian pension, you will be required to repay the debt to Centrelink.
If you have not provided your 2008 Danish pension statement to Centrelink International Services you should do so now.
Our address details are on page 4.
Changes in European banking procedures
From June 2008 changes to international banking procedures will be introduced in some European countries. In these
countries we will be using your IBAN (International Bank Account Number), rather than your bank account number, to
pay your Australian pension.
You do not need to contact Centrelink. We will write to you if we need any information.
Centrelink is obtaining IBANs in affected countries from the information we already hold, and from general information
provided by European banks.
Your Australian pension payments will not be affected by this change.
Contacting Centrelink International Services
Want to make contacting us even simpler?
When you contact us by telephone or mail, please state your Customer Reference Number (CRN). This way we can
answer your query faster. Your CRN can be found on all letters from Centrelink. During calls, if your personal file is
accessed, you may request a receipt number as a record of your call.
Contact details for Centrelink International Services are on page 4.
Pension SINGLE COUPLE COUPLE COUPLE
both eligible one eligible separated due to
partner ill health
How much pension1, 2 Per Year Per Year Per Year Per Year
Maximum rate pension3 $14 066.00 $23 602.80 $11 801.40 $14 066.00
Allowable Income Per Year combined combined combined
(no dependent children) $3 432.00 $6 032.00 $6 032.00 $6 032.00
(no dependent children) $39 351.00 $65 793.00 $65 793.00 $77 870.00
Extra allowable income
per dependent child $639.60 $639.60 $639.60 $639.60
Allowable Assets combined combined combined
Full pension5—Home owner $166 750 $236 500 $236 500 $236 500
Full pension5—Non-home owner $287 750 $357 500 $357 500 $357 500
Part pension—Home owner $535 250 $849 500 $849 500 $973 500
Part pension—Non-home owner $656 250 $970 500 $970 500 $1 094 500
Deeming Rates and Thresholds Rates effective from 1 July 2007
combined combined combined
Threshold $39 400 $65 400 $65 400 $65 400
Rate below threshold 4.0% 4.0% 4.0% 4.0%
Rate above threshold 6.0% 6.0% 6.0% 6.0%
These figures are a guide only. Effective 20 March 2008 unless otherwise stated.
1. Rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) is
the one that applies. Blind customers are exempt from the income and assets tests. Some assets are deemed to earn
income, and there are special rules for other types of income.
2. In addition to the rates specified, seniors raising children may be entitled to a range of payments to assist with those costs.
3. Since July 2000, the rate has included a pension supplement. It is currently: single A$481 per year, couples A$806 per
year combined, couples separated due to ill-health A$481 per year each.
4. Income over these amounts reduces the rate of pension payable by 40 cents in the dollar for single pensioners and 20
cents in the dollar each for couples.
5. Single and combined couple rates are reduced by $1.50 per fortnight for every $1000 of additional assets above the limit.
Certain assets are not included in the assets test.
Information about your payments
You will receive 13 payments from Centrelink over the year. Each payment is for a 28-day period (see payment calendar
above for more information).
Direct deposit payments
If you receive your payment by direct deposit into your bank account it will be available two to six days after issue. If your
payment has not arrived within ten days of being issued, you should check with your local bank before contacting
Centrelink as the bank has probably received the payment, but has not yet deposited it into your account.
Cheque payments are available between 14 and 20 days after issue.
Cheques are sent in local currency for many countries, or in US Dollars.
Cheques are sent through the international and local mail systems and there are often delays before the cheque arrives
at your address. These delays are beyond Centrelink’s control.
When you receive your cheque, deposit it into your bank account. You will have to wait for the cheque to clear before you
can access the funds. Clearance delays can be around two weeks if the cheque is in local currency, or four weeks for US
Dollar cheques. Clearance delays vary depending on your local bank.
If you do not receive your cheque, it may be due to mail delays. You should check with the postal authorities in your
country before contacting us.
Generally, if your cheque has not arrived within 20 days of being issued please contact us. We will send you a new
cheque, but the new cheque may also take some time to reach you.
If a cheque is received after you have asked us to cancel it, you should not cash it as you may incur penalty bank
charges. You may also have problems with your bank when you next want to cash a cheque. Please contact us if you are
unsure which cheque to cash.
Centrelink can pay pensions directly into bank accounts in most countries, and encourages this method of payment as it
is safe, quick and reliable. The number of countries to which we can pay by direct deposit is always increasing, and it is
likely that we can now change your payments from cheque to direct deposit. Please call us if you would like to discuss
changing to direct deposit payments.
Your four-weekly pension payments
Your payment will be Direct deposit Cheque customers Payment covers
issued by Centrelink customers should should receive the period:
on: receive payment by: payment by:
24 April 30 April 14 May 27 March to 23 April
22 May 28 May 11 June 24 April to 21 May
19 June 25 June 9 July 22 May to 18 June
17 July 23 July 6 August 19 June to 16 July
14 August 20 August 3 September 17 July to 13 August
11 September 17 September 1 October 14 August to 10 September
9 October 15 October 29 October 11 September to 8 October
6 November 12 November 26 November 9 October to 5 November
If you need to talk to us
Need to talk to us?
Please call between 8am and 5pm Hobart Time, Monday to Friday. Hobart time is approximately two hours behind New
Zealand, three hours ahead of Singapore, eight hours ahead of Greece, nine hours ahead of central Europe, ten hours
ahead of the United Kingdom, 15 hours ahead of eastern USA/Canada and 18 hours ahead of western USA/Canada, as
at 1 April 2008.
Outside these times, you will be able to leave a message with our answering service and we will return your call. Please
include your name, Customer Reference Number (CRN), country you are calling from, telephone area code and
number, together with a brief summary of your question.
Phone calls from the following countries are a free call*
Austria 0800 295 165
Canada 1888 2557 493
Denmark 8088 3556
Germany 0800 180 2482
Greece 0080 0611 26209
Italy 800 781 977
The Netherlands 0800 0224 364
New Zealand 0800 441 248
Philippines 1800 1611 0046
Portugal 800 861 122
Spain 900 951 547
Turkey 00 800 6190 5703
The United Kingdom 0800 169 5865
The United States of America 1866 3433 086
Other countries—you can reverse the charges +61 3 6222 3455
If you are in one of the countries, you should use the number listed, as it is cheaper and easier.
This free call may not be available from every location within the country and may not be free from mobile or
If using a pay telephone, you will need to insert coins or a card as for a local call and this may not be refunded at
the end of the call.
If you are in a country not listed, or if you are not able to use the free-call number listed above, contact your local
operator and ask them to reverse the charges to our number: +61 3 6222 3455. You will not have to pay for the
If you cannot use either the free-call or reverse-charge options, you may still ring us and leave your name, the
country you are calling from, and the telephone area code and number. We will return your call.
+61 3 6222 2799
or from New Zealand only +61 3 6222 3690
GPO Box 273
Do you speak another language?
This magazine is available in Croatian, Dutch, English, German, Greek, Italian, Macedonian, Portuguese, Serbian, Spanish
and Turkish. If a magazine in any of these languages suits you better than the one you received, please contact us.
DISCLAIMER: The Commonwealth of Australia has attempted to ensure the information in this publication is accurate. However, the Commonwealth does not warrant that the
information is accurate or complete nor will it be liable for any loss suffered by any person because they rely in anyway on it. You should contact Centrelink for full details of any
entitlements and services to which you may be eligible or how any pending changes in legislation, programs or services may affect you.