Foreign income and assets 108-05020050

The gross current rate of overseas income is treated as income for social security purposes whether the payments are made from overseas, or through an Australian agent. No amount is deducted for any bank charges, tax paid at source, exchange rate changes, etc. Note: deductions may be allowed for business or real estate income.

See Assessing and coding real estate details, for more information on how to code and assess overseas real estate.

A separate procedure explains assessment of foreign income for family assistance and Paid Parental Leave scheme payments. From 1 July 2008, foreign income includes separate components for foreign income and tax exempt foreign income.

Compensation payments received from another country must be assessed and coded by the Compensation Recovery Team.

A foreign lump sum may be made for various reasons:

• A customer who is granted an ongoing foreign pension may also receive a lump sum due to a backdated start date
• The treatment and coding of these lump sum arrears are covered in Comparable foreign payment lump sum arrears debts
• Arrears of an income stream-like payment are assessed as if the income were received for the arrears period, not as a lump sum. See Other foreign income below
• For the assessment and coding requirements of other lump sum payments (including exempt lump sums, remunerative lump sums, non-remunerative lump sums) from another country, see Treatment of lump sums

This may be reduced by allowable deductions for social security purposes. Generally, expenses allowed as a deduction against gross business income are those necessarily incurred in earning the income. Expenses allowed as a deduction against gross rental income are those that relate to the property.

These are generally treated as income, except some restitution payments or blocked foreign pensions, which are exempt income. Foreign pensions may also be treated as direct deductions instead of income or exempted under an International Agreement. Foreign war and war widow pensions are treated as ordinary income for all customers.

Where a customer is granted either a survivor's (widow's) pension or an increase in their own payment following the death of a partner, the survivor's pension income or additional surviving spouse payment is not assessed during the bereavement period.

See Foreign pensions.

Foreign savings accounts, bonds, managed investments and shares are assessed as financial investments and therefore, subject to the deeming provisions.

Foreign superannuation-like funds are not assessed the same way as Australian superannuation investments. These are treated as managed investments provided the person can access the funds.

Overseas income stream products are not subject to the income stream rules. The gross amount of income is recorded on Foreign Income/Asset Detail (FID) and the asset value of the product is assessed as for Australian assets that do not comply with the income stream rules. Lump sum arrears of a foreign income stream-like product are assessed and coded as if the payment was received throughout the arrears period. A debt may occur because of the coding, see Categories of debt raised under subsection 1223(1).

Foreign employment income is employment income paid in a foreign currency regardless of whether the customer is in Australia or overseas.

Variable reporters normally have to advise their employment income at the end of every entitlement period but this can be unrealistic for customers who reside outside of Australia. Unless these customers have a partner in Australia on an income support payment, Centrelink will assess all overseas customers as notification reporters and make use of their 28 day notification period.

Customers who reside outside of Australia will have all income maintained as an ongoing amount and are obliged to notify Centrelink of any change to their circumstances within 28 days of the customer becoming aware of this event. It would be reasonable to expect a customer to wait a month to see if their employment income had changed over that period but if the change becomes evident before then, they should advise at that time.

All target foreign income is used when calculating the accrual of Working Credits. The customer is unable to deplete their Working Credit balance to offset ordinary foreign income. Working Credits can be used to offset foreign employment income only.

For customers over Age Pension age, if eligible, Work Bonus may apply to:

• foreign employment income, and
• from 1 July 2019, overseas farm or business income from self-employment where the income has been earned from personal exertion

For more information, see Work Bonus and balance for pensioners of Age Pension age.

The Work Bonus is applied prior to any Working Credit calculations.

Any asset a customer owns, whether it is located in Australia or overseas, is assessed at net market value (less any allowable loans or liabilities) or as an exempt asset.