Canada Agreement and foreign pension information 106-04008000

In Canada, the pension insurance legislation is the responsibility of the Canadian federal government.

The Old Age Security Act provides an income tested payment based on residence in Canada for people over 65 with low income.

The Canada Pension Plan (CPP) (Québec Pension Plan (QPP) for employees in Québec) commenced 1 January 1966 to provide coverage through the collection of compulsory contributions which insure the contributor, and their family, against disability and death and provide for income in the form of a pension once the person reaches retirement age.

Note: a person can receive a payment under the Old Age Security Act and CPP/QPP at the same time.

The collection of contributions and payment of pensions is the responsibility of the CPP and QPP. Service Canada is the service delivery arm that seeks to provide a central contact for government programs.

Employment insurance is managed separately, and each province/territory of Canada provides programs to cover residents.

Widow B Pension and Wife Pension were sunsetted in 1995 and, along with Bereavement Allowance, ceased to be paid from 2020. See:

• Widow B Pension
• Wife Pension
• Bereavement Allowance

The protocol in 1990 made minor amendments to the provisions for widowed persons and added portability but took effect from the start of the Agreement.

The original Agreement with Canada covered:

• Age pensions
• Invalid pensions (now Disability Support Pension)
• Wife Pensions
• Carer Pensions (now Carer Payment) for partners of Australian pensioners and
• pensions payable to widowed persons:
• Sole Parent Pension (now Parenting Payment Single)
• Widow Pension
• Bereavement Allowance

Note:

• There was no requirement for Invalid Pensions (DSP) to be severely disabled
• Widowed persons were required to have been married (de jure) or ‘dependent female’
• Any wife or carer pension granted due to being the partner of Australian pensioner who was paid under the Agreement was also deemed to be paid under the Agreement

Payments granted under the 1989 Agreement were taken to be paid under the 2003 Agreement when that entered into force (Article 20.3). However, no provision of the 2003 Agreement could affect the qualification of a payment under the 1989 Agreement meaning the previously more favourable portability rules still apply to those payments.

Portability under the 1989 Agreement was indefinite to any country for:

• Age pensions
• Invalid pensions (now Disability Support Pension)
• Wife pensions
• Widow B pensions, and
• pension payable to a widowed person who became a widowed person while both the person and the spouse were Australian residents
• other widowed persons and carer pensions (now Carer Payment) were only payable indefinitely in Australia or Canada

A comparison rate continues to apply (Article 20.6) for customers granted under the previous Agreement who were:

• Australian residents on 8 May 1985
• granted and departed Australia before 1 January 1996

For Australia:

Department of Social Services (DSS)

For Canada:

Employment and Social Development Canada (ESDC)

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Canada:

Service Canada

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Canada:

International Operations - Service Canada, Ottawa.

Under the Agreement with Canada, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement and under either country’s domestic legislation (Article 14.1).

For information on bulk data exchange, see International Data Exchange Program and auto-indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to Canada:

• AUS187CA - Australia/Canada Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

The following liaison form is completed by Canada and is sent to Centrelink International Services (CIS).

Liaison Form - CAN/AUS2

This liaison form is used in all communication from Canada.

• Section 1 - Purpose: this section indicates the reason for the liaison and the certification by Service Canada
• Section 2/3 - Reference Numbers/Applicant: this section provides reference numbers and details of the person claiming if they are not also the insured person, that is, for CPS claims
• Section 4 - Spouse/Deceased Spouse or Parent: this section provides details of the Applicant’s spouse or the deceased contributor for CPS claims
• Section 5 - Information provided by Canada: this section specifies the Canadian information and other forms or documents that may be sent with the liaison
• Section 6 - Information requested from Australia: this section specifies the Australian information required by Canada

Under the Administrative Arrangements, each country will arrange for an agreed report to be and sent with claims for invalidity/disability pensions.

Medical examinations may also be undertaken upon request for foreign pension claim purpose. Generally, the liaison agency will contact Services Australia with the request. There is no provision for reimbursement of costs to either country.

The customer should contact Services Australia if they receive a direct request from the liaison agency to undertake a medical examination. Advise the customer to go through Services Australia’s foreign pension medical assessment process. Where the customer has already undertaken a medical examination based on a direct request from the Agreement partner without consulting Services Australia, the customer should contact the liaison agency to discuss any possible reimbursement options.

If a customer is claiming reimbursement of costs based on undertaking a medical examination requested by Services Australia for foreign pension purpose, consider all evidence provided. For example, if incorrect advice was provided to the customer by Services Australia that caused them to seek an independent medical examination which caused the customer to be out of pocket.

See Customer compensation and Act of Grace.

See Agreement Country Document Catalogue (ACDC) for samples of forms, foreign documents and translations.

There are no double coverage provisions in the Agreement with Canada.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in the other country directly
• In Australia - the Australian Taxation Office (ATO) website

See general information on taxation, including issuing Australian payment summaries.

Tax treaty

Australia has a double tax agreement with Canada, which avoids the need for the customer to pay tax in both countries.

A person who is 'resident' in one country (according to the definition in the tax agreement) generally only pays tax on pensions in that country.

Tax deductions from income by one country may be allowed as a credit against tax payable in the other country.

Tax deduction

In Canada, Canadian pensions over a certain level are taxed at the source. In Australia, Canadian pensions may have a non-resident tax deduction. The tax agreement limits this deduction to 15%.

The gross rate of Canadian pension, before any deduction, is maintained.

Canadian tax year

Canada uses the calendar year (1 January - 31 December) as the tax year.

Australia does not have a Reciprocal Health Care Agreement (RHCA) with Canada.

See general information on health insurance and Medicare coverage.

Any queries about:

• Health Insurance coverage in the other country – tell the customer to contact the health insurance authority in the other country, and
• Medicare coverage - direct them to Medicare

The official languages of Canada are English and French.

See French naming conventions and pronunciation.

Telephone country code is +1.

Note: Canada shares the same country code as the US.

Street address

Title FirstName Surname [Addressee]

10-123 MAIN ST SE [Apt/unit + street number + street direction]

MONTREAL QC H3Z 2Y7 [City/municipality + province/territory + postal code]

CANADA

Rural address

Title FirstName Surname [Addressee]

RR 4 LCD MAIN [Rural Route identifier + station information]

LLOYDMINSTER AB T9V 2Z9 [City/municipality + province/territory + postal code]

CANADA

Post Office Box address

Title FirstName Surname [Addressee]

PO BOX 4001 STN A [Postal box number + station information]

VICTORIA BC V8X 3X4 [City/municipality + province/territory + postal code]

CANADA

Note:

• Abbreviate the street type. Example: AVE for Avenue
• Abbreviate the street direction. Example: SE for Southeast
• Put the city, province and postal code on the same line
• Abbreviate the province. Example: ON for Ontario
• Separate the first and last 3 elements of the postal code with a space. Do not use hyphens

Same-sex marriage has been legal in Canada since July 20, 2005.

For Australia, the Agreement with Canada (Article 2.1) covers:

• Age Pension
• Disability Support Pension (DSP)
• Carer Payment (CP)
• Parenting Payment Single (PPS)

Note:

• Only severely disabled DSP customers may be granted under the Agreement (Article 1.1)
• Carer Payment is limited to carer partners of Age/DSP only (Article 1.1)
• Only a ‘widowed person’ may be granted PPS under the Agreement. 'Widowed person' means a person (either gender) who stops being a member of a couple because of the death of their partner and who is not currently a member of a couple (Article 1.1)
• While Bereavement Allowance (BVA) cannot be claimed after 20 March 2020, claims lodged prior to this date may still be received. See Bereavement Allowance (BVA)

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in Canada can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the Canadian authorities

 

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140CA - Australian Pension Claim – Social Security Agreement between Australia and Canada
• Mod(iA)CA - Income and Assets - Canada

DSP only:

• AUS142 - Work Capacity - Customer information
• AUS109 - Treating Doctor's Report, outside Australia
• AUS175 – Medical Assessment Report - Disability Support Pension (Outside Australia)

Note: Canada arranges for the AUS175 to be completed on a case-by-case basis

CAR only:

• AUS156 - Assessment for Carer Payment
• AUS156a - Health Professional Assessment for Carer Payment

Forms can be lodged at any Canadian social security office.

Under Section 6 of the Administrative Arrangements, the Canadian social security office will:

• accept all forms/documents and date stamp the AUS140 form, and
• if necessary, arrange medical forms to be completed

Under Section 6 (c), the Canadian liaison agency will:

• verify the customer’s identity and personal details, and
• send the form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of coverage in Canada and information regarding Canadian pensions

See Exchange of information and liaison forms.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident, a resident of Canada or another Agreement country that accepts claims for Australian pension under another agreement (Article 5.1(a)), and
• physically present in Australia, Canada or that third country (Article 5.1(b))

Claims under the Canadian Agreement

Claims for Australian payment under the Canadian Agreement may be lodged in certain other Australian Agreement countries.

See the Claim lodgement matrix.

Accepting other Agreement claims

Canada will accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

The customer must also satisfy any other rules under the other agreement and social security law provisions, including portability. For example, DSP can be claimed in a third country but has an ongoing residence requirement. Therefore, if the claimant is:

• living in the other country, DSP cannot be paid
• temporarily in the other country, DSP may generally be paid for the period it is portable under domestic legislation

The normal rules for working out the date a claim is ‘made’ and the start day apply to claims under the Agreement with Canada. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Canada to be used as the date of lodgement of that claim in Australia (Article 12.1)

For coding help, see:

• Claims for Australian payments under International Agreements and
• Start Day (CLK) for coding assistance

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of Canadian creditable periods to meet any minimum periods to qualify for An Australian pension, for example, 10 years for Age Pension (Article 6.1)
• the total of any non-continuous Canadian creditable periods to be considered to be continuous to meet any continuous residence requirement to claim an Australian pension (Article 6.4)

Note:

• Overlapping Australian residence and Canadian creditable periods are only counted once (Article 6.5(a))
• A Canadian creditable period accumulated under the Old Age Security (OAS) Act which coincides with a Canadian creditable period accumulated under the Canada Pension Plan can be taken into account once only (Article 6.5(b))
• For DSP and PPS (widowed person), only Canadian creditable periods in the Canada Pension Plan (contributions) can be used to totalise (Article 6.2)
• Québec Pension Plan (QPP) contributions are not covered by the Agreement and cannot be used to totalise
• Adjoining periods of Australian qualifying residence and Canadian creditable periods, with a break of up to 3 months in between, can also be considered to be continuous (Policy)
• When totalising, use any Canadian creditable periods certified by the Canadian authorities, noting the limitations above

See Resources in International Social Security Agreements for examples of totalisation.

A Canadian period of coverage means a Canadian creditable period.

That is:

• a period of legal residence in Canada after the age of 18 (creditable period for OAS) or
• a period of contributions paid by employers and employees from 1 January 1966

Either may be used when totalising for Australian qualification purposes, as long as they are certified and do not overlap.

Canadian periods of coverage must be certified by the Canadian Competent Institution.

Note: Québec Pension Plan (QPP) creditable periods/periods of coverage cannot be used for totalisation for Australian payment.

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) in Australia of which 6 months must be continuous (Article 6.6).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is required if the person is an Australian resident at the date of lodgement (Article 6.6).

The Agreement also allows a person to use their deceased partner’s creditable periods in the Canada Pension Plan to totalise for PPS (Article 6.3).

CP has no qualifying residence periods but does have a Newly Arrived Resident's Waiting Period (NARWP). Beside normal exemptions, a NARWP only applies to a person who has 'entered Australia'. See Newly Arrived Resident's Waiting Period (NARWP) and Qualifying Residence Period Exemptions.

A person who is resident and present outside Australia has not entered Australia and therefore does not have a NARWP.

To avoid granting CP to a person who has never been to Australia, the Agreement requires a person to have been an Australian resident at some time (Article 5.2).

The Agreement allows the ongoing residence requirement for DSP, PPS and CP to be met by customers who continues to reside in Canada (Article 13.1).

For customers outside Australia, the Agreement with Canada (Article 7.1) refers to the overall rate calculation contained in section 12(1) of the Social Security (International Agreements) Act 1999.

This means customers paid under an Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applies, and
• additional child amounts (s.14a SS(IA) 1999) included, if eligible
• their Canadian pension proportionalised (Randisi concession) for use in the income test using denominator of 300 (Article 7.1)

Note:

• In some circumstances their partner’s WLR may be used. See Working Life Residence (WLR)
• Autonomous customers who are paid a proportional rate and in receipt of a Canadian pension will also have the Randisi concession applied to their Canadian pension (Article 7.2)

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia.

Returns to Australia

While there is no temporary return provision, the inside Australia rate includes a comparison rate which means the proportional rate can continue to be paid if it is higher than the direct deduction rate. See Inside Australia.

Customers in Australia under the Agreement are generally paid a direct deduction rate (Article 7.3).

This Agreement includes a comparison rate in Australia (Article 7.4).

Departures from Australia

There is no temporary departure provision in the Agreement. The outside Australia rate applies immediately on departure regardless of the length of the absence.

Payments under the Agreement

Under the Agreement, provided the customer remains qualified, Australian payments are payable indefinitely in both countries, that is, for temporary or permanent absences (Article 13.1).

Third country portability under the Agreement

Portability to third countries for a customer paid under the Agreement is the same as for an autonomous customer leaving Australia (Article 13.2). See Portability of payments.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement
• the customer meets any payment limitations, such as severely disabled, and
• the customer can meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfers to international social security agreements.

A person who would be autonomously qualified but is paid under the Agreement can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia.

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks

See Delivery of payments to Centrelink customers outside Australia.

For Canada, the Agreement covers the Old Age Security Act and the Canada Pension Plan (CPP).

Payments under the Old Age Security Act

The Old Age Security Pension is subject to a means test based on the customer’s income from all sources, including Australian pension.

Main payment

• Old Age Security Pension (AGE)

Note: equivalent allowance for widows/widowers or partners of Old Age pensioners.

Payments under the Canada Pension Plan

Main payments

• Retirement Pension (CPA)
• Includes Post Retirement Benefit (PRB)
• Disability Pension (CPI)
• Survivor Pensions (CPS)

Note: Post Retirement Disability Benefit (PRDB) may be payable to a person who is under age 65 who becomes disabled while receiving CPA. PRDB stops at age 65.

Under the Old Age Security Act:

• Guaranteed Income Supplement

Under the Canada Pension Plan:

• CPP Children’s benefits
• CPP Death benefit
• Other federal, provincial or territorial welfare payments

The following known payments are paid by the Canadian authorities but are not covered under the Agreement:

• Québec Pension Plan (QPP)

For help with:

• Assessment of Canadian pensions, see Assessment
• Coding of Canadian pensions, see Eligibility and Coding

The requirement to claim Canadian pensions applies to Canadian AGE, CPA and CPI.

• Customers may claim CPP Children’s benefit or CPS survivor pensions voluntarily
• Customers may claim Children’s benefit voluntarily using the CPS (children of deceased contributors) or CPI (children of disabled contributors) claim pack.

Customers who only worked or last resided in Québec are still required to claim on the same combined claim form. The Canadian Liaison Agency will decide which fund (CPP or QPP) pays the contributory pension, however, the QPP authority will not advise the outcome of the claim.

Eligibility and coding of foreign pensions tab contains detailed information on Canadian payments that are subject to CFP legislation.

Claim packs are available for AGE/CPA/CPS and CPI.

Claim packs are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Customers who only worked or last resided in Quebec are still required to claim on the same combined claim form. The Canadian liaison agency will decide which fund (CPP or QPP) pays the contributory pension, however, the QPP authority will not advise the outcome of the claim.

Specific requirements for Canadian claims

The customer is to complete and provide the following:

AGE/CPA/CPS claims:

• Application for Canadian Old Age, Retirement and Survivors benefits (GE-CAN 1)
• Documents to prove residence in Canada (AGE only)
• Proof of death (Death Certificate) (CPS only)

CPI claim:

• Application for Canada Pension Plan Disability benefits (GE-CAN 1 (DI)Medical Report (ISP-5052)
• Questionnaire for Disability Benefits (ISP-5050)
• Consent for Service Canada to Obtain Information (ISP-5051)
• Consent for Service Canada to Obtain Information (to go to your physician with the medical report) (ISP- 5060)

Requests for additional information

If information provided with the claim for a Canadian pension is incomplete, Canada will send requests for information in English or French direct to customers.

Receipt of foreign pension claim by Services Australia

Under the Administrative Arrangements, Canadian forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• All foreign pension claims and supporting documentation must be scanned, and
• The original foreign claim form and copies of supporting documentation must be sent in paper form to Centrelink International Services (CIS). See Processing a foreign pension claim

Centrelink International Services (CIS) only

CIS will complete the following or arrange for the following to be completed as necessary and attach the documents to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

CIS staff are not required to sign the Canadian claim form.

All claims:

• AUS187CA - Australia/Canada Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

INV only:

Australia is not required to provide specific forms for Canadian invalidity pension claims. See Foreign pension medical assessments.

Enquiries about claims for Canadian payments in Canada or a third country should be directed to the Canadian social security authorities.

Canadian payments can be paid direct deposit in Australia.

Any queries about the non-payment of Canadian pension should be directed to the Canadian pension authorities.

Agreement pensions are paid as 12 regular monthly payment. There are no bonus payments.

Other benefits or private pensions are paid monthly or annually.

Canadian pensions must be recorded in the source currency - Canadian dollars (CAD). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollar amount.

Note: payments into Australia are made in Australian dollars.

Canadian payments are generally increased for Consumer Price Index (CPI, or cost of living) changes each year:

• Old Age Security (OAS) - 1 January, 1 April, 1 July and 1 October
• CPP payments - 1 January

For information on bulk data exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 7.3) and ignored in the income test (Article 8(8)(zc) Social Security Act 1991) for customers under the Canadian Agreement who are in Australia
• proportionalised and assessed as ordinary income (Article 7.1(b)) for customers paid:
• under the Canadian Agreement who are outside Australia
• autonomously customers who are on a long-term outside Australia rate
• ordinary income (not proportionalised) for customers paid:
• autonomously who are inside Australia
• under another agreement other than Canada or New Zealand who are inside or outside Australia

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note:

• CPP Post Retirement Benefit (PRB) and Post Retirement Disability Benefit (PRDB) are assessed in the same way as CPA
• Each member of a couple is deemed to receive half of the total amount received by the couple (Article 7.6)

• Québec Pension Plan (QPP) payments
  QPP payments is a compulsory public insurance plan for workers aged 18 and over who have worked in Québec.
  QPP payments are equivalent to CPP payments. They are:
• Retirement Pension - QPA
• Disability Pension - QPI
• Survivors Pension - QPS

Customers who only worked or last resided in Québec are still required to claim on the same combined claim form. The Canadian liaison agency will decide which fund (CPP or QPP) pays the contributory pension, however, the QPP authority will not advise the outcome of the claim.

The following payments are exempt income for customers paid under the Agreement or autonomously, who are outside Australia (Article 7.1(a):

• Canadian Guaranteed Income Supplement (GIS)
• GIS is a monthly payment to a customer who:
  - is 65 years and older
  - is a resident of Canada
  - receives a Canadian Old age pension, and
  - has income below the maximum annual income threshold set by Service Canada based on their marital status
• GIS allowances that can also be paid:
  Allowance benefit (payable to GIS partner)
  Allowance for the Survivor (payable to GIS widow/er)
• Other agreed Canadian federal, provincial or territorial welfare payments

Other Canadian federal, provincial or territorial welfare payments are benefits that may relate to caregiving, housing or similar.

• Canadian Pension Plan (CPP) Children’s benefits

CPP Children’s benefit may be paid to children of disabled or deceased contributors.

The payment is exempt for customers residing inside or outside of Australia: where the child meets the definition of a dependent child (section 8(8)(j) Social Security Act 1991), see Payment for dependent children. Otherwise, it is assessed the same as the main CPP agreement pension.

• Canada Pension Plan (CPP) Death benefit

CPP Death benefit is a one-off payment, payable to the estate or other eligible individuals, on behalf of a deceased CPP contributor.

A person may contribute to both the CPP and the Quebec Pension Plan. The contributions made under both plans are combined when a death benefit is calculated.

Payment may be exempt from the income test if payable to the person who incurred expenses associated with the bereavement. Otherwise, the amount is assessable for 12 months from date of receipt. (s1073 Social Security Act 1991). See Treatment of Lump Sums.

The Agreement does not include embargo provisions.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable Foreign Payment (CFP) lump sum arrears.

Where an arrears period is not provided, Canada have confirmed that it is always the period from the start date of the pension until the end of the month preceding the first regular payment.

A contravention debt may also occur if the customer does not advise of the grant of their Canadian payment within their notification period. See Foreign pension coding.

Life certificates are not issued by Canada.

Customers in Australia are sent notices at grant and will receive an annual statement for tax purposes (NR4) in Canadian dollars in February each year.

The NR4 is for tax purposes and details the amounts received for the previous calendar year. CPP amounts for the previous year may be derived by dividing by 12, however Old Age Security amounts are indexed four times a year and cannot be derived.

Both CPP and Old Age Security cheque payments show the Canadian dollar amount on the cheque butt, however, the cheques are issued in Australian dollars.