Malta Agreement and foreign pension information 106-04022000

In Malta, national legislation requires the compulsory payment of social security contributions, usually through deductions from paid employment.

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

Social security covers most workers and the self-employed, including non-contributory benefits for those with low income. The legislation and collection of contributions is the responsibility of the Maltese government through taxation but administration and payment of pensions is the responsibility of the centralised government department.

The original Agreement with Malta covered:

• Age pensions
• Invalid pensions (now Disability Support Pension)
• Wife pensions, and
• Pensions payable to widows:
• Sole parent pension (now Parenting Payment Single)
• Widow pension
• Bereavement allowance

Notes:

• There was no requirement for invalid pensions (DSP) to be severely disabled
• Widows (females only) were required to have been married (de jure) and not currently a member of a couple
• Any wife 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

Portability under the 1991 Agreement was indefinite to any country.

Non-contributory assistance and pensions paid by Malta were still exempt from the Australian income test for customers resident in Malta.

For Australia

Department of Social Services (DSS)

For Malta

Ministry for the Family and Social Solidarity (MFSS)

For Australia

Services Australia

For Malta

Department of Social Security (DSS)

For Australia

Centrelink International Services (CIS)

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

For Malta

International Relations Unit, Department of Social Security (DSS)

Under the Agreement with Malta, 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 more information on bulk data exchange, see International Data Program and indexation of foreign pensions.

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

• Australia/Malta Agreement on Social Security - Liaison Form (AUS187MT)

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

These forms are completed by Malta and are sent to Centrelink International Services (CIS):

• Liaison Form - MAL/AUS2 (This form is used in all communication from Malta)
• Section 1 - Purpose: completed in all cases
• Section 2 - Reference Number: completed in all cases
• Section 3 - Applicant: provides details of the person applying
• Section 4 - Spouse or Parent/Former Spouse or Parent: completed in all cases
• SUR claims only: provides details of the insured person
• Section 5 - Information provided by Malta: this section specifies the Maltese information and other forms or documents that may be sent with the liaison
• Section 6 - Information requested by Malta: this section specifies the Australian information required by Malta
• Section 7 - Signature: certification by the Maltese competent institution
• Insurance Periods – E205

Malta use the generic European form E205 to notify Maltese periods of coverage.

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

Medical examinations may also be undertaken upon request. There is no provision for reimbursement of costs.

For Australia

For Australian Disability Support Pension (DSP) claims, Malta arrange for the Detailed Medical Report (AUS175 form) to be completed and sent to Australia.

For Malta

For Maltese invalidity claims, Centrelink International Services (CIS) send copies of Australian medical information to Malta.

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

The Agreement with Malta does not include double coverage provisions.

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 the other 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 has a double tax agreement with Malta. Pensions are only taxable in the country in which the person is resident. Any tax deductions from one country may be used as a credit against any tax payable in the other country.

Tax deductions

Maltese pensions are not taxed.

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

Maltese tax year

Malta generally 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, and
• Medicare coverage - should be directed to Medicare

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

Australia has a reciprocal health agreement with Malta.

There are no health insurance deductions from Maltese pension.

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

The official languages of Malta are Maltese and English.

Maltese naming conventions and pronunciation.

Telephone country code is +356.

Street address

FirstName Surname [addressee]

38 Triq-il-Merkanti [house number + street]

Zebbug ZBG 2000 [town/city + postcode]

Gozo [island, if not main island of Malta]

MALTA [country]

Post Office Box address

FirstName Surname [addressee]

Kaxxa Postali 85 [Post Office Box + number]

Floriana FRN 1131 [town/city + postcode]

MALTA [country]

The postal code is 7 alphanumeric characters (three letters, representing the locality and four numbers). One space between letters and numbers. For example, ZTN 1073.

Same-sex marriage has been legal since 1 September 2017.

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

• Age Pension
• Disability Support Pension (DSP) for severely disabled
• Parenting Payment Single (PPS)

Notes:

• Only a 'widowed person' may be granted PPS under the Agreement. 'Widowed person' means a female who ceases to be a member of a legally married (de jure) couple and who is not currently a member of a couple
• Additional child amounts, also known as Overseas Child Component and Additional Child Payment, are included in the proportional rate calculation. See Rate calculation
• While 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 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 Malta can be obtained by contacting the Maltese authorities or Centrelink International Services (CIS). Forms can also be downloaded from the Services Australia website. See Resources for a link.

Forms required

For all payments:

• AUS140MT - Australian pension claim - Agreement with Malta
• Mod(iA)MT - Income and Assets - Maltese

Additional medical forms:

• For DSP claims:
• AUS142 - Work Capacity - Customer information
• AUS109 - Treating Doctor's report - outside Australia

Forms can be lodged at any Maltese social security office.

Under the Administrative Arrangements, the Maltese liaison agency will verify the customer’s identity and send the claim to CIS with a completed liaison form including periods of coverage in Malta and Maltese pension details. See Exchange of information and liaison forms in the Social Security Agreement between Australia and Malta table for the Maltese 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 Malta or a third Agreement country that accepts claims for Australian pension under other Agreement (Article 5.1(a)), and
• physically present in Australia, Malta or that third country (Article 5.1(b))

Australian claims under the Maltese Agreement may be lodged in some other Australian social security agreement countries.

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

Note: the customer must also satisfy any other rules under the other Agreement and other 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

See Claim Lodgement Matrix (CLM).

The normal rules for working out the start day apply to a claim under the Agreement with Malta, however, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Malta to be used as the date of lodgement in Australia (Article 11.2)

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 coverage in Malta to meet any minimum periods to qualify for an Australian pension, e.g. 10 years for Age Pension (Article 7.1)
• the total of any non-continuous Maltese periods of coverage to be considered to be continuous to meet any continuous residence requirement to claim an Australian pension (Article 7.2)

Notes:

• Overlapping periods are only counted once (Article 7.3)
• Policy advice is that adjoining periods of Australian qualifying residence and Maltese periods of coverage, with a break of up to 3 months in between, can also be considered to be continuous

Maltese periods of coverage means an insurance period of contributions, or any equivalent period, which has been or can be used to acquire the right to a benefit under the legislation of Malta.

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 7.4(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 7.4(b)).

The Agreement allows the ongoing residence requirement for DSP and PPS to be met if the customer continues to reside in Malta (Article 13).

The Agreement with Malta (Article 8.1) refers to the overall rate calculation contained in the Social Security (International Agreements) Act 1999 (S12(1)).

This means:

• customers paid under the Agreement who are outside Australia are paid a proportional rate according to their Australian working life residence (WLR)
• the Rate Limiter/Limited Rate applies, and
• additional child amounts are included in the proportional rate. These amounts are paid automatically as a component of the Australian pension if the customer is qualified (S14A, SS(IA)A 1999)

The proportional rate also includes the proportionalisation of the Maltese pension (Randisi concession) for use in the income test (Article 8.1). The rate of foreign pension used in the income test is the customer's Australian working life residence divided by 300. The Agreement determines the Randisi proportion (300 months). This is different to the legislation that is used to determine the proportional rate (420 months in most cases).

Autonomous customers who are paid a proportional rate and receiving a Maltese pension will also have the Randisi concession applied to their Maltese pension (Article 8.2).

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.

Note: in some circumstances, their partner's WLR may be used. See Working Life Residence (WLR).

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 8.3).

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 are paid a direct deduction rate (Article 8.5). That is, all Maltese 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.

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 Malta 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 8.7).

The Agreement with Malta specifies the rate calculation that applies ‘where an Australian pension is payable whether by virtue of this Agreement or otherwise to a person who is outside Australia’ (Article 8.1). For details, see Outside Australia in Rate calculation.

Note: ‘or otherwise’ refers to autonomous customers.

Payment’s 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 Maltese payments table.

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).

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 receiving an autonomous payment covered by the Agreement may be able to transfer to the Agreement if they are in Malta when their normal portability period expires. The portability under the Agreement then applies, see Portability.

Note: the customer must meet the transfer requirements and satisfy any payment specific requirements under the Agreement, for example, being severely disabled for DSP.

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 rate of payment. See Rate calculation.

See Transfers to international social security agreements.

A person who has sufficient Australian qualifying residence (or an exemption) 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 to 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.

If a customer intends to be outside Australia 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 Australian payments made into bank accounts outside Australia. See Overseas Bank Account Details (OBAD).

Contributory pensions:

• Retirement Pension (AGE)
• Invalidity Pension (INV)
• Widows Pensions (SUR)

Note: Retirement Pensions may be 'Two-Thirds' (contributions after 1979) or Increased, Decreased or National Minimum (contributions prior to 1979).

Non-contributory assistance and pensions:

Note: non-contributory payments are not paid outside Malta and should be reviewed if necessary.

• Age Pension
• Disability Pension
• Blind Pension
• Carer’s Pension
• Social Assistance
• Unemployment Assistance
• Supplementary Allowance
• Energy Benefit
• Deficiency Contribution Bonus
• Child Benefits
• Children’s Allowance
• Child in Care Allowance
• Disabled Child Allowance

Other short-term contributory benefits such as Unemployment Benefit and Sickness Benefit may be paid but are not covered by the Agreement.

The requirement to claim Maltese pensions applies to Maltese AGE, INV and SUR.

Contributions paid by employers on behalf of employees. May include child-rearing periods.

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

Note:

A customer receiving a Maltese INV pension may be entitled to transfer to a Maltese early AGE pension. This is called a conversion case. To facilitate this, the Maltese authority may request a Maltese AGE claim to be sent to the customer. A voluntary claim for Maltese AGE pension should be issued to the customer when one of these requests is received. See Assisting customers to claim a foreign pension.

Claim packs available: AGE, INV and SUR.

Claim packs for Maltese payments can be issued through the Foreign Pension System (FPS).

Specific requirements for Maltese claims

The customer is to complete and provide the following:

• AGE claims:
• Application for Retirement Pension (App_RP)
• INV claims:
• Application for Invalidly Pension (App_IP)
• SUR claims:
• Application for Survivor’s Pension (App_WP)
• Marriage Certificate
• Death Certificate
• Deceased’s Birth Certificate

Requests for additional information

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

Return of foreign pension claim

Under the Administrative Arrangements, Maltese 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. See Processing a foreign pension claim

Centrelink International Services (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/Malta Agreement on Social Security - Liaison Form (AUS187MT)

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

• INV only:
• Copies of Australian disability information

Enquiries about claims for Maltese payments in Malta or a third country should be directed to the Maltese social security authorities. See Authorities, Institutions and Liaison Agencies in the Social Security Agreement between Australia and Malta table.

Maltese payments can be made in Australia by direct deposit or cheque.

Any queries about the non-payment of Maltese pension should be directed to the Maltese pension authorities, see Authorities, Institutions and Liaison Agencies in the Social Security Agreement between Australia and Malta table.

Customers receive 13 payments per year but are usually specified in weekly amounts on notices. A ‘special bonus’ and ‘cost of living bonus’ is added to the weekly amount and there are also two bonus payments at a set rate paid in June and December.

Amounts are coded as Freq: ‘ANN’ using the following calculation:

• when the amount paid weekly is provided:
• ANN= (weekly rate + special bonus + cost of living bonus) x 52 + 2 bonus payments
• when the amount paid 4 weekly is provided:
• ANN= (4 weekly rate + (4 x special bonus) + (4 x cost of living bonus)) x 13 + 2 bonus payments

Notes:

• Special bonus is 3.12 Euro
• Bonus payments are 135.10 Euro each (270.20 Euro in total)
• Cost of living bonus is variable and should be confirmed with the Maltese authorities where unknown

Payments into Australia are paid in AU dollars, however, all foreign pensions must be recorded in the source currency (Euro). 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 AU dollar amount.

Maltese payments are generally increased for cost of living (CPI) in January each year.

For more information on bulk exchanges of information with other countries, see International Data Exchange Program and auto-indexation of foreign pensions.

Maltese AGE/INV/SUR are:

• proportionalised according to the customer’s WLR before being included in the income test where the Australian rate is proportional, including Agreement and autonomous customers (Article 8.1), and
• ordinary income in Australia for autonomous customers and direct deduction if paid under the Agreement (Article 8.5)

Each member of a couple is deemed to receive half of the total amount received by the couple (Article 8.6).

Amounts coded in the Social/Welfare Amt field (non-contributory assistance and pensions) are exempt for customers who are resident in Malta (Article 8.4).

See also Other known payments.

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

Note: payments that are exempt from the income test are included in a direct deduction rate, for example, under an Agreement rate calculation or for Special Benefit.

Under the Agreement, non-contributory assistance and pensions are exempt from the income test for customers who are resident in Malta otherwise assessable income but subject to same treatment as AGE/INV/SUR.

These exemptions also apply to autonomous customers.

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

If paid:

• in addition to the main payments, coded in the Social/Welfare Amt field with the main payment, or
• as a separate payment, coded as Type: SOC on the Foreign Pension Details (FPD) screen in the Social/Welfare Amt field

The Agreement includes embargo provisions (Article 12.4) but they are not used.

Arrears debts for customers and partners are raised under s1228A Social Security Act 1991 and recovered by normal methods. See Comparable foreign payment lump sum arrears debts.

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

Life certificates are not used by Malta.

Customers in Australia are sent notices at grant and will receive an annual statement in between January and March each year.

Payments into Australia are paid in AU dollars, however, all foreign pensions must be recorded in the source currency (Euro). 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 AU dollar amount.

For help coding other generic benefits paid by the Maltese government (including by funds not covered by the Agreement), see Foreign pension coding.

For help with any other income received from Malta, see Foreign income and assets.