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

For Latvia:

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

For Australia:

International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for anything relating to double coverage. See Double coverage.

For Latvia:

See Competent institutions, above.

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.

This form is completed by International Services (CIS) and sent to Latvia:

• Australia/Latvia Agreement on Social Security - Liaison Form (AUS187LV)

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

This form is completed by Latvia or the customer and are sent to International Services (CIS):

• Liaison Form (SADARBIBAS VEIDLAPA) - LV/AUS

This 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

Disability pensions are not covered under the Agreement.

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

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

See Double coverage/certificates of coverage information in International Social Security Agreements.

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

For general information on taxation, including issuing Australian Payment Summaries, see the Taxation information in International Social Security Agreements.

Tax treaty

Australia does not have a double tax agreement with Latvia.

Tax deductions

Latvian pensions may be taxed at source (Nodokliem).

The gross rate of Latvian pension (before deductions) is maintained.

Latvian tax year

Latvia uses the calendar year (1 Jan - 31 Dec) as the tax year.

Any queries about:

• health insurance coverage in the other country, the customer should be directed to contact the health insurance authority in the other country
• Medicare coverage, should be directed to Medicare, see Medicare phone numbers

For general information on health insurance and Medicare coverage, see Health Insurance/Medicare information in International Social Security Agreements.

Australia does not have a reciprocal health agreement with Latvia.

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

Naming conventions and pronunciation.

Telephone country code is +371.

Street address

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]

Rural address

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]

Latvian thoroughfares (roads, streets etc) are always written with a lower-case first letter. Common thoroughfares include:

• bulvaris (boulevard)
• gatve (street)
• iela (street/road)
• prospekt

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 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

Note: additional child amounts, also known as Overseas Child Component and Additional Child payment, are not included in the proportional rate calculation. See Rate calculation.

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

Forms to claim an Australian payment in Latvia can be obtained by contacting the Latvian authorities. See the Authorities, institutions and liaison agencies in the Social Security Agreement between Australia and Latvia table, International Services (CIS) or download the relevant form from the Services Australia website. See the Resources page for CIS and website links.

Forms required

For all payments:

• AUS140LV - Australian pension claim - Agreement with Latvia
• Mod(iA)LV - Income and Assets - Latvian

Forms can be lodged at any Latvian social security office.

Under the Administrative Arrangements, the Latvian institutions will:

• receive and date stamp the form (Section 9(a))
• verify identity and personal details (Section 9(b))
• send the claim and liaison form to Services Australia, including periods of insurance in Latvia and Latvian pension details (Section 9.2(b) and (c))

See the Exchange of information and liaison forms in the Social Security Agreement between Australia and Latvia table for the Latvian liaison form.

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))

There are no third country lodgement provisions. See the Claim lodgement matrix table.

The normal rules for working out the start day apply to a claim 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

See Claims for Australian payments under International Agreements and Start Day for coding assistance.

The Latvian 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 periods are only counted once (Article 11.3).

Policy advice is that adjoining periods of Australian qualifying residence and periods of coverage in Latvia, with a break of up to three months in between, can also be considered continuous.

Periods of coverage in Latvia means a period of contributions used to acquire the right to a benefit under the legislation of the Republic of Latvia, including a period deemed as equivalent to an insurance period.

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 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)).

The Agreement with Latvia (Article 12.1) refers to the overall rate calculation contained in the Social Security (International Agreements) Act 1999 (S12(1)) but specifically excludes additional child amounts.

This means:

• customers paid under the agreement who are outside Australia are paid a proportional rate according to their Australian working life residence (WLR), and
• the Rate Limiter/Limited Rate applies

The Latvian Agreement does not include the proportionalisation of any Latvian pension in the income test (Randisi concession).

Although a person may be qualified for an Australian payment or portable outside Australia, if the customer has no WLR the rate of payment outside Australia will be nil.

When a person is paid a proportional rate under an agreement, Rent Assistance (RA) cannot be paid. Other add-ons such as Energy Supplement and Pension Supplement are payable under normal add-ons portability rules. See Portability of Add-ons.

Examples of when a customer is paid a proportional rate includes (but not limited to):

• permanently overseas
• temporarily overseas longer than 26 weeks for age pension
• former resident transferring to the Agreement for portability

Returns to Australia

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

If there is no change to the country of residence, any movement is considered temporary and a review is set to automatically change the rate after a continuous period of 26 weeks. If a delegate determines that a person has changed their country of residence, coding the Country of Residence (CRES) screen will automatically apply the correct rate calculation.

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 with Latvia are paid a direct deduction rate (Article 12.6). That is, all Latvian payments covered by the Agreement, including social welfare payments, are not assessed as income but will be deducted dollar-for-dollar from the maximum rate of the Australian payment before the application of the income or assets test.

The Agreement does not include a comparison rate in Australia.

Note: the rate paid from grant of a new claim is based on where the customer is present, even if resident in the other country and irrespective of the 26 week temporary departure provision.

For example, a person who is resident in Latvia lodges a claim while temporarily in Australia:

• if granted from a date when they were or are still in Australia, they will be paid the direct deduction rate from grant. The rate will swap to the proportional rate from the date they leave Australia
• if granted from a date when they were again outside Australia, for example, early claim, they will be paid the proportional rate immediately

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).

Payments exempt under the Agreement are generally exempt for autonomous customers (section 8(8)(zc) Social Security Act 1991).

See Assessment and exempt payments in the Rules for Latvian payments table.

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

If necessary, a customer receiving an autonomous payment covered by the Agreement may be able to transfer to the Agreement if they are in Latvia when their normal portability period expires. The portability under the Agreement then applies. See Portability.

Note: the customer must meet the transfer requirements.

Once a customer transfers to the Agreement they are then considered to be paid by virtue of the Agreement and all provisions of the Agreement apply, including the rate of payment. See Rate calculation.

See Transfers to international social security agreements.

A person who would be autonomously qualified but is paid under the Latvian Agreement can only transfer from the Agreement to autonomous 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.

Customers who transfer to autonomous may be affected by the former resident provisions if they leave Australia again within 2 years of becoming an Australian resident. See Former resident provisions.

For Australian payments made into bank accounts outside Australia. See Overseas Bank Account Details (OBAD)

• Vecuma pensija - Old Age Pension (AGE)
• Valsts sociala nodrosinajuma pabalsts - State Social Security Benefit (AGE)
• Apgadnieka zaudejuma pensija - Survivor Pensions (SUR)

• Piemaksa pie pensijas - Supplement to pension
• Tiesibas saņemt vienreizejo pabalstu mirusa laulatajam - Allowance for the Deceased's Spouse
• Apbedisanas pabalsts - Funeral Allowance/Death Benefit

The requirement to claim applies to Latvian AGE.

Latvian Survivor Pension (SUR) is only paid to children or parents of deceased pensioners and can be claimed voluntarily using the SUR claim pack. See Claim forms and processes.

Latvian Invalidity Pension (INV) is not covered by the Agreement but may be claimed voluntarily in Australia. See Assisting customers to claim a foreign pension.

Contributions paid by employers and employees. Includes periods for child rearing, study and military service.

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

Claim packs containing all the necessary forms to claim a Latvian payment can be issued through the Foreign Pension System (FPS).

Claim packs are available for AGE or SUR.

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

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

Return of foreign pension claim

Under the Administrative Arrangements, Latvian forms can be lodged in Australia at any service centre.

• 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 by internal mail to International Services (CIS). See Processing a foreign pension claim

CIS only

CIS will complete the following and attach to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

All claims:

• Australia/Latvia Agreement on Social Security - Liaison Form (AUS187LV)

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. See the Authorities, institutions and liaison agencies in the Social Security Agreement between Australia and Latvia table.

Payments can be made in Australia by direct deposit.

Any queries about the non-payment of Latvian pension should be directed to the Latvian pension authorities, see Authorities, institutions and liaison agencies in the Social Security Agreement between Australia and Latvia table.

Customers receive 12 regular monthly payments Freq: 'MTH'.

Note: small rates of pension may be paid less frequently, for example, annually or biannually. Amounts can also be coded as Freq: ‘ANN’.

All payments into Australia are paid in Australian dollars (AUD), however, all foreign pensions must be recorded in the source currency – Euro (EUR).

Note: amounts recorded in source currency on the Foreign Pension Details (FPD) screen must not be changed to the AUD amount.

Latvian pensions are generally increased for cost of living (CPI) in January each year.

Some foreign pensions recorded are automatically adjusted for CPI increases. See International Data Exchange Program and auto-indexation of foreign pensions.

Latvian AGE or SUR are:

• ordinary income outside Australia, and
• ordinary income in Australia for autonomous customers and direct deduction if paid under the Agreement with Latvia (Article 12.3)

Note: the 26 week rule applies for temporary departures from and returns to Australia (Article 12.2 and 12.4). See the Rate calculation on the Australian payments tab.

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

See Other known payments.

Amounts that are treated as a direct deduction under an agreement are exempt from the income test (s8(8)(zc) Social Security Act 1991).

There are no exempt Latvian payments under the Agreement, however, policy advice is that the following Latvian lump sum benefits are not assessable:

• Tiesibas saņemt vienreizejo pabalstu mirusa laulatajam - Allowance for the Deceased's Spouse
• Apbedisanas pabalsts - Funeral Allowance/Death Benefit

The Eligibility and coding of foreign pensions tab contains detailed information about the coding of Latvian payments covered by the Agreement.

Latvian lump sum benefits cannot be coded but should be noted on a DOC.

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.

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 specific forms for proof of life.

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.

Officers of Services Australia are able to certify requests. 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.

Payments into Australia are paid in Australian dollars (AUD). All foreign pensions must be recorded in the source currency - Euro (EUR). Official statements provide the foreign currency amounts.

Note: amounts recorded in source currency on the Foreign Pension Details (FPD) screen must not be changed to the AUD amount.

Assessment: Ordinary income.

Coding:

Code as Type: ‘INV’ on the Foreign Pension Details (FPD) screen in the Basic Amount field.

Unemployment benefit may be paid for up to nine months. In Customer First, create a manual review on the Review Registration (RVR) screen and complete the fields as follows:

• Service Reason: customer's payment type
• Review Reason: OSR (Overseas)
• Due Date: 9 months from Unemployment benefit/assistance grant date
• Source: INT
• Date of Receipt: today's date
• Notes: 'Confirm Latvian Unemployment benefit/assistance has ceased and zero payment on FPD.'
• Keywords: IATREV
• Workgroup: leave blank
• Position: leave blank
• Transfer to Region: leave blank

The review will mature on the Due Date coded in the RVR activity. Workload Management will allocate the review for manual action.

Assessment: Ordinary income.

Coding:

Code on the Foreign Pension Details (FPD) screen as Type: ‘OPN’ in the Basic Amount field.

For assistance with coding:

• other generic benefits paid by the Latvian Government (including by funds not covered by the Agreement), see Foreign pension coding
• any other income received from Latvia, see Foreign income and assets