Australian pensions paid outside Australia, the proportional rate 061-02010020

As of 1 July 2021, legislation passed to allow for a discretionary extension for customers receiving Age Pension or DSP, where they are not able to return to Australia within 26 weeks due to certain circumstances. This allows the customer to remain overseas without their payment rate affected by working life residence (WLR) rules, and may allow certain add-on payments to continue for the period of the extension. These add-on payments are Incentive Allowance, Pharmaceutical Allowance and Rent Assistance.

This change also allows for a discretionary extension for customers receiving Age Pension or DSP, subject to portability savings under the pre 20 September 2000 portability rules, or 1 July 2014 portability rules. This allows customers who normally live overseas and who are in Australia and unable to depart Australia due to specific circumstances to not lose their grandfathered status by being in Australia for a continuous period of 26 weeks or more.

Age Pension customers paid by virtue of the New Zealand Agreement, and who are temporarily in third countries and unable to travel due to unforeseen circumstances, may also be able to be paid beyond 26 weeks.

For New Zealand Agreement-affected customers (autonomous and those paid by virtue of another agreement) it also means the New Zealand Agreement rate can continue for the extension period. This applies to customers who have left:

• Australia (i.e. direct deduction rate if ordinarily present long-term in Australia), or
• New Zealand (i.e. proportional rate, if ordinarily present long-term in New Zealand)

To determine whether the customer may be extended and paid under the discretionary portability extensions, see Discretion to extend portability period.

A customer long-term outside Australia is generally paid a rate based on their residence in Australia. This rate is called a proportional rate.

A proportional rate may be paid to:

• a customer receiving payment using an international agreement
• an autonomous customer who remains payable after 26 weeks outside Australia, or
• a customer who is present long term inside New Zealand

A customer may be saved from being paid a proportional rate if:

• the continuing inability to work or permanent blindness occurred while the customer was an Australian resident (DSP only)
• the customer is saved under the 20 September 2000 savings provision
• the customer is saved under the 1 July 2004 savings provisions, or
• the customer is assessed under the discretionary portability extension provisions

As well as customers who are paid using an international agreement, the following customers may be payable for more than 26 weeks after departure from Australia:

• All customers paid Age Pension, unless paid by virtue of the New Zealand Agreement
• DSP customers paid using the 'no future work capacity' portability provisions
• DSP customers paid using the terminally ill provisions
• DSP customers saved under the pre 1 July 2004 portability rules

Note: customers paid DSP by virtue of the New Zealand Agreement can only be paid a maximum of 4 weeks in a rolling 28 day period. There is no indefinite portability for this customer cohort. See New Zealand Agreement and foreign pension information.

If the customer is paid using an agreement, then payment will become proportional according to the terms of the particular Agreement.

• If the customer is paid using an agreement which includes the temporary departure/return provisions, then the rate will generally become proportional:
• immediately on departure from Australia when the customer is leaving Australia to live in the agreement country (permanent departure), or
• after 26 weeks absence from Australia for temporary absences
• If the customer is paid using an agreement which does not include the temporary departure/return provisions, the rate will generally become proportional immediately on departure

Note: there are different arrangements for travel to New Zealand. See Departures to New Zealand below.

Generally, there are no savings provisions from a proportional rate for customers outside Australia who are paid using an international agreement. However, if a customer has the equivalent of or more than the maximum working life residence for that agreement, they will be unaffected by this rule.

If a customer is autonomous and is transferred to an international agreement after their autonomous entitlement ceases after leaving Australia then payment will become proportional on the date of effect of the transfer.

Working life residence (WLR) refers to a customer's period of residence in Australia between the ages of 16 and Age Pension age. It is used in the proportional rate calculation for departures to countries other than New Zealand.

For more information, see Working Life Residence.

Working age residence (WAR) is used for departures to New Zealand and refers to a customer's period of residence in Australia between the ages of 20 and Age Pension age.

For more information, see Departures to New Zealand below.

A person's proportional rate is generally calculated by multiplying their income and asset tested rate by their working life and dividing the result by the applicable denominator.

For customers paid according to their working life residence the applicable denominator is the maximum working life residence amount required to receive the full income and asset tested rate. Before 1 July 2014, this was generally 300 months. On 1 July 2014, this amount changed and is now generally 420 months. Some exceptions apply, for example, customers who are 'saved' (grandfathered) from the 1 July 2014 AWLR changes.

Customers paid using either the international agreement with Greece or the Republic of North Macedonia, may have an applicable denominator of 528 months or 44 years. Customers paid under the international agreement with India may have an applicable denominator of 540 months.

For example, an autonomous customer who is paid $300.00 per fortnight under the means test who has 150 months working life residence will be paid $300 x 150/420 or $107.15 per fortnight. If the same person was living in Greece and paid under that agreement, they would be paid $300 x 150/528 or $85.22 per fortnight.

For those paid according to their working age residence, the applicable denominator depends on the payment type being received. For more information, see New Zealand Agreement and foreign pension information.

The New Zealand Agreement is similar to other agreements in that a proportional rate may be payable to customers who are outside Australia, however there are key differences:

• a proportional rate is payable to someone present long term in New Zealand, rather than after 26 weeks,
• the proportional rate calculation is based on working age residence (WAR), rather than working life residence (WLR), and
• this proportional rate applies to customers present long-term in New Zealand who are:
• paid by virtue of the New Zealand Agreement,
• receiving Age Pension, DSP or Carer Payment autonomously, and
• receiving Age Pension, DSP or Carer Payment by virtue of any other agreement

For more information, see New Zealand Agreement and foreign pension information.

The Department of Home Affairs generally advises when a customer or child leaves or returns to Australia. The Centrelink system uses the information to assesses the portability of payments and concession cards. The assessment will happen regardless of whether the customer has told Services Australia their travel details. Note: do not cancel Department of Home Affairs datalink activities.

Where the customer gives evidence they travelled on different dates, the agency should consider using those different dates, if both the following apply:

• the new dates are logical
• the results will be a better outcome for the customer

This most often happens if a customer passes through Australian customs on one day but the flight leaves the next day.

In many cases, customers do not have to tell the agency if they are leaving Australia temporarily for less than 6 weeks, or when they have returned from a temporary absence.

When customers do need to tell us about a departure before leaving Australia or when they have returned to Australia they can use the Travelling outside of Australia service. This service is in their Centrelink online account. If the travel or portability assessment is complex the online service will ask them to contact the agency.

Services Australia website lists when customers must tell the agency they are leaving or returning to Australia. The Resources page has a link.