Latvia Agreement and foreign pension information 106-04021000

In Latvia, the pension insurance legislation requires the compulsory payment of social security contributions on behalf of employees, usually through deductions from paid employment.

Contributions insure employees against disability and unemployment and provides for income in the form of a pension once the person reaches retirement age.

The legislation is the responsibility of the Latvian government but the collection of contributions and payment of pensions is the responsibility of the pension fund.

There is voluntary coverage for those not included under the compulsory scheme and a State social assistance pension for those who are not entitled to a contributory pension.

The Agreement with Latvia started on 1 January 2013. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Latvia:

Labklajibas Ministrija - Federal Ministry of Welfare

For Australia:

Services Australia

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

For Latvia:

Valsts Socialas Apdrosinasnas Agentura (VSAA) - The State Social Insurance Agency

For Australia:

Centrelink International Services (CIS)

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

For Latvia:

Valsts Socialas Apdrosinasnas Agentura (VSAA) - The State Social Insurance Agency.

Under the Agreement with Latvia, 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 17.1).

For more 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 Latvia:

• AUS187LV - Australia/Latvia 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 Latvia and sent to Centrelink International Services (CIS):

• Liaison Form (SADARBIBAS VEIDLAPA) - LV/AUS

The following liaison form is used in all communication from Latvia.

• Section 1 - Details of the insured person: this section indicates the claim(s) for which pension the liaison applies and provides details of the insured person
• Section 2 - Applicant, if not the insured person: this section provides details of the person claiming if they are not also the insured person in Section 1, that is, for SUR claims
• Section 3 - Insured person’s insurance periods provided by Latvia: this section specifies the Latvian insured periods
• Section 4 - Notice of grant of Latvian pension: this section specifies date of lodgement, amount, including historical rates, and type of Latvian pension. Also details rejection reasons
• Section 5 - Notice of change of circumstances: this section specifies changes such as new address, death, etc
• Section 6 - Other information provided by Latvia: this section provides other information such as receipt of Australian claim
• Section 7 - Information required by Latvia: this section specifies other information requested from Australia
• Section 8 - Certification: this section specifies who has completed the liaison form

Invalidity/disability pensions are not covered under the Agreement.

The Agreement with Latvia includes double coverage provisions. Certificates of coverage are used to confirm exemptions.

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 that country
• in Australia - the Australian Taxation Office (ATO) website

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

Tax treaty

Australia does not have a double tax agreement with Latvia.

Tax deductions

Latvian pensions may be taxed (Nodokliem) at the source.

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

Latvian tax year

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

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

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
• Medicare coverage - direct them to Medicare

The official language of Latvia is Latvian (also known as Lettish).

See Latvian naming conventions and pronunciation.

Telephone country code is +371.

Street address

Title FirstName Surname [Addressee]

Jelgavas iela 1, dz 12 [Street name, house number, unit/flat number]

Aizpute [City or town]

Kurzeme nov. [Region/amalgamated municipality (if applicable)]

LV-3456 [Postal code]

LATVIA

Rural address

Title FirstName Surname [Addressee]

Liepu iela 1 [Street name, house number, unit/flat number or house name]

Ērberģe [Village (if applicable)]

Mazzalves pag. [Parish (if applicable)]

Neretas nov. [Region/amalgamated municipality]

LV-5133 [Postal code]

LATVIA

Note:

• Latvian thoroughfares (roads, streets etc) are always written with a lower-case first letter. Common thoroughfares include:
• bulvaris (boulevard)
• gatve (street)
• iela (street/road)
• prospect (avenue)
• Abbreviations used in addresses:
• pag (pagasts) - after the name of a parish
• nov (novads) - after the name of a region/amalgamated municipality
• dz - abbreviation of dzīvoklis, meaning unit/flat

No abbreviation is used after the name of a village.

The postal code consists of country code LV and four digits separated with a hyphen.

Latvia does not recognise same-sex marriage or any other type of partnership, including registered partnerships.

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

• Age Pension

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

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

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

 

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140LV - Australian Pension Claim – Social Security Agreement between Australia and Latvia
• Mod(iA)LV - Income and Assets - Latvia

Forms can be lodged at any Latvian social security office.

Under the Administrative Arrangements, the Latvian institutions will:

• accept all forms/documents and date stamp the form
• verify the customer’s identity and personal details
• send the form(s) and any supporting documentation to Services Australia with a liaison form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of coverage in Latvia and information regarding Latvian pensions

See the 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 with Latvia to meet the residence rules for claims if, on that date, they are:

• an Australian resident or a resident of Latvia (Article 10.1(a)), and
• physically present in Australia or Latvia (Article 10.1(b))

Claims under the Latvian Agreement

Claims for Australian payment under the Latvian Agreement may not be lodged in other Australian Agreement country.

See the Claim lodgement matrix.

Accepting other Agreement claims

Latvia will not accept claims for Australian benefits under other Australian social security Agreements.

Claim lodgement consideration

There are no specific considerations under the Latvian Agreement.

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

• the date of lodgement of a claim for an Australian payment in Latvia to be used as the date of lodgement in Australia (Article 15.2), or
• the date of lodgement of a claim for a Latvian Old Age Pension in Latvia to be used as the date of lodgement of a claim for an Australian Age Pension (FP claim = AU claim) (Article 15.3) if:
• the person declares periods of residence in Australia at the time of claiming the Latvian pension, and
• the claim for Australian pension is received by the agency within twelve months of the date of lodgement of the Latvian pension claim

For coding help, see:

• Claims for Australian payments under International Agreements and
• Start Day

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of coverage in Latvia to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 11.1)
• the total of any non-continuous periods of coverage to be considered to be continuous to meet any continuous residence requirements (Article 11.2)

Note:

• Overlapping Australian residence and Latvian periods of coverage are only counted once (Article 11.3)
• Adjoining periods of Australian qualifying residence and periods of coverage in Latvia, with a break of up to 3 months in between, can also be considered continuous (Policy)

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

Latvian period of coverage:

• means a period of insurance, for example, a period during which contributions were paid, or any equivalent period, as defined in the Latvian legislation
• where equivalent periods may include deemed periods, such as for child rearing or military service
• where both actual and deemed periods may be used when totalising for Australian qualification purposes, as long as they are certified and don’t overlap
• Latvian periods of coverage must be certified by the Latvian Competent Institution

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 six months must be continuous (Article 11.4(a)).

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 11.4(b)).

Customers residing in Latvia do not meet the ongoing residence requirement for DSP.

For customers outside Australia, the Agreement with Latvia refers to the overall rate calculation contained in section 12(1) of the Social Security (International Agreements) Act 1999 but specifically excludes additional child amounts (Article 12.1).

This means customers paid under the Agreement have:

• proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied

Non-proportional rate extension

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

Returns to Australia

The proportional rate continues to apply for the first 26 weeks of a temporary return to Australia (Article 12.2).

• For returns to Australia before 9 June 2018, manually code the Temporary Return to Aust Ind on the Residence Savings (RSS) screen.

Customers in Australia under the Agreement are generally paid a direct deduction rate (Article 12.6).

The Agreement does not include a comparison rate in Australia.

Departures from Australia

The inside Australia rate continues to be paid for the first 26 weeks of a temporary departure from Australia (Article 12.4).

Portability under the Agreement

Under the Latvian Agreement, provided the customer remains qualified, Australian payments are payable indefinitely while the customer remains resident or present in either country (Article 5.1).

Third country portability under the Agreement

There is no portability for a permanent departure to a third country for a customer paid under the Agreement.

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, and
• the customer is able to 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 Latvian 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.

The Latvian Agreement covers the 'legislation concerning pension insurance'.

Main payments

• Vecuma pensija - Old Age Pension (AGE)
• Valsts sociālā nodrošinājuma pabalsts - State Social Security Benefit (AGE)
• Apgādnieka zaudējuma pensija - Survivor Pensions (SUR)

Supplementary payments/Aallowances

• Tiesibas saņemt vienreizējo pabalstu mirušā laulātajam (Allowance for the deceased's spouse)
• Apbedīšanas pabalsts (Funeral allowance/Death benefit)

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

• Invaliditates pensiju (Invalidity pension)
• Bezdarbnieka pabalsts (Unemployment benefit/assistance)
• Piemaksa pie vecuma un invaliditātes pensijas (Old-age and disability pension supplement)

For help with:

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

The requirement to claim Latvian pensions applies to Latvian AGE.

• Latvian SUR is only paid to children or parents of deceased pensioners and can be claimed voluntarily
• Customers may claim Latvian INV voluntarily

See Foreign pension claims.

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

Claim packs are available for AGE or SUR.

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

Specific requirements for Latvian claims

The customer is to complete and provide the following.

AGE only:

• Application for a Republic of Latvia State Old Age Pension
• Document showing Latvian Personal Identification Number

SUR only:

• Application for a Republic of Latvia State Survivor’s Pension
• Proof of death - Death Certificate
• Child/ren details - Birth/Education certificates

Requests for additional information

If information provided with the claim for Latvian pension is incomplete, Latvia will send requests for information in Latvian direct to customers.

Receipt of foreign pension claim by Services Australia

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

• All foreign pension claims and supporting documents must be scanned, and
• The original foreign claim form and copies of supporting documents 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 required to sign the relevant section in the claim form.

All claims:

• AUS187LV - Australia/Latvia Agreement on Social Security

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

Enquiries about claims for Latvian payments in Latvia should be directed to the Latvian social security authorities.

Latvian payments can be paid by direct deposit in Australia.

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

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

Other benefits or private pensions are normally paid monthly or annually.

Latvian pensions must be recorded in the source currency – Euro (EUR). 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.

Latvian pensions are generally increased for Consumer Price Index (CPI, or cost of living) in October each year.

Indexation of Latvian pensions is not applied in a standard, linear manner (i.e. as a single invariable CPI percentage to all pension rates). The percentage of indexation can vary depending on a customer’s Latvian insurance contributions and is then applied to a capped amount of their Latvian pension income.

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 12.3) and ignored in the income test (Section 8(8)(zc) Social Security Act 1991) for customers under the Latvian agreement who are in Australia
• ordinary income (not proportionalised) for customers paid:
• under the Latvian Agreement who are outside Australia
• autonomously inside or outside Australia
• under another agreement other than Latvia or New Zealand who are inside or outside Australia.

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

Note: each member of a couple is deemed to receive half of the total amount received by the couple (Article 12.5).

• Invaliditates pensiju - Invalidity Pension (INV)
• Bezdarbnieka pabalsts - Unemployment benefit/assistance

Unemployment benefit may be paid for up to nine months.

• Piemaksa pie vecuma un invaliditātes pensijas -Old-age and disability pension supplement

Is it paid to certain recipients of age pension but not paid to customers outside Latvia/EU or customers paid under the Australian-Latvian agreement.

The following payments are exempt:

• Tiesibas saņemt vienreizējo pabalstu mirušā laulātajam - Allowance for the deceased's spouse

This allowance is a one-off benefit is paid to the surviving spouse in the case of death of a beneficiary of the Latvian pension authority.

Policy advice is this payment is exempt from the income test if payable as a reimbursement to the person who incurred expenses associated with the bereavement.

Otherwise, the amount is assessed as ordinary income for 12 months from date of receipt (s1073 Social Security Act 1991) See Treatment of Lump Sums.

• Apbedīšanas pabalsts - Funeral allowance/Death benefit

Latvian Funeral allowance/Death benefit may be exempt from the income test if payable as a reimbursement to the person who incurred expenses associated with the bereavement.

Otherwise, the amount is assessed as ordinary income 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 partners are raised under s1228A Social Security Act 1991 and recovered by normal methods. See Comparable Foreign Payment (CFP) lump sum arrears debts.

Where an arrears period is not provided, the arrears period end date may be assumed to be the end of the month prior to the period for which the first regular monthly payment is paid.

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

Latvia does not have a specific life certificate.

Latvian pension recipients who live outside Latvia must submit a ‘freely written request’ for example, a letter, for continued payment of their Latvian pension to the Latvian pension authority each year between 1 October and 15 December.

Latvian Life Certificates can be certified by an officer of Services Australia.

For general on helping customers with life certificates, see Assisting customers to maintain an existing foreign pension.

Customers in Australia are sent notices at grant and for changes of rate, for example: indexation.