India Agreement and foreign pension information 106-04039000

In India, the Employees’ Provident Funds and Miscellaneous Provisions Act 1952 applies to most industries and establishments, which employ 20 or more people. It is mandatory for employers and employees in covered industries and establishments to pay contributions.

The Employees’ Provident Fund Organisation (EPFO) administers three schemes:

• Employees’ Provident Fund Scheme (EPF) 1952
• Employees’ Pension Scheme (EPS) 1995
• Employees’ Deposit Linked Insurance Scheme (EDLI) 1976

A covered employee becomes a member of each of the three schemes. Employers contribute to all three schemes and employees contribute only to the Employees’ Provident Fund Scheme (EPF).

Employees’ Provident Fund Scheme (EPF) + Read more ...

The Agreement with India started on 1 January 2016. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For India:

Ministry of Overseas Indian Affairs (MOIA)

For Australia:

Australian Government Agency, Services Australia

For India:

Employees’ Provident Fund Organisation (EPFO)

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for anything about double coverage. See Double coverage/taxation and healthcare.

For India:

Head Office, Employees’ Provident Fund Organisation (EPFO) in New Delhi.

Under the Agreement with India, 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 19.1).

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

These forms are completed by India or the customer and are returned to International Services (CIS)

This form is used in all communication from India.

LIAISON FORM (INCLUDING INSURANCE PERIOD) IN/AUS6

• Section 1 - Address of agencies
• Section 2/3 - Particulars of the Contributing/Insured Member: these sections provide details of the insured person or another claimant.
• Section 4 - Information/document required: this section specifies the information requested by India
• Section 5 - Information/document attached: this section specifies the Indian information and other forms and documents that may be sent with the liaison
• Section 6 - Periods of contributory service in India after 1 January 2016: this section provides information on insurance periods in India after the start of the Agreement

For Australia, the Agreement only covers Age Pension so medical information is not needed.

However, the Agreement covers Indian Permanent Total Disability Pension. The Administrative Arrangements include provisions, which allow Australia and India to exchange existing medical information and to arrange medical examinations on request.

Forms: + Read more ...

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

The Agreement with India includes Double coverage provisions. Certificates of coverage are used to confirm exemptions.

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

Taxation and health insurance are not covered by the Agreement.

Any queries about taxation should be directed to the relevant authority:

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

Tax deductions

Indian pensions are not generally taxed at source.

Indian tax year

In India, the tax year is from 1 April to 31 March.

Any queries about:

• health insurance coverage in the other country, direct the customer to contact the health insurance authority in the other country
• Medicare coverage, direct the customer to Medicare, see Medicare Consumers Program Support - Medicare Consumers Section - Medicare Branch

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 India.

Indian pensioners do not usually have a health insurance deduction taken out of their payments.

For Australia, the Agreement with India (Article 2.1(a)(i)) 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 India can be obtained by:

• downloading the relevant form from the Services Australia website - see the Resources page
• contacting International Services (CIS)
• contacting the Indian Employees’ Provident Fund Organisation (EPFO) - see CODES

Forms needed:

For all payments:

• AUS140IN - Australian pension claim - Agreement with the Republic of India
• Mod(iA)IN - Income and Assets - Indian

Forms can be lodged at any office of the Indian Employees’ Provident Fund Organisation.

Under the Administrative Arrangements, the Indian Liaison Agency (EPFO) will verify the customer’s identity and send the claim to CIS with a completed Liaison Form including Indian pension details and periods of insurance in India completed after 1 January 2016.

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 or a resident of India (Article 12(a)), and
• are physically present in Australia or India (Article 12(b)), and
• have a minimum of 12 months Australian working life residence accrued after 16 November 1995

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

• the date of lodgement of a claim for an Australian payment in India to be used as the date of lodgement in Australia (Article 17.2), or
• the date of lodgement of a claim for Indian Retirement Pension to be used as the date of lodgement of a claim for Australian Age Pension if:
• the customer declares periods of residence in Australia on the Indian claim, and
• the Australian claim is received by Centrelink International Services (CIS) within 12 months of the date of lodgement of the Indian claim (Article 17.3)

See Claims for Australian payments under International Agreements and Start Day (CLK) for coding help.

See Australian Working Life Residence (AWLR) - India Agreement for lodgement rules overview.

A summary of residence periods under the Indian Agreement can be viewed on the New Zealand and India Information (NZI) screen.

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of EPS insurance in India after 1 January 2016 to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 13.1)
• the total of any non-continuous periods of insurance in India to be considered as continuous to meet any continuous residence requirement to claim an Australian pension (Article 13.2)

Notes:

• overlapping periods are only counted once (Article 13.3)
• policy advice is that adjoining periods of Australian qualifying residence and periods of insurance in India, with a break of up to three months in between, can also be considered to be continuous

To be able to use the totalisation provisions a person must always have at least 12 months WLR (of which 6 months must be continuous) accrued after 16 November 1995 and before the person reaches Indian retirement age (currently 58 years for males and females) (Article 13.4). Note: unlike WLR for rate, this period cannot be rounded.

See Australian Working Life Residence (AWLR) - India Agreement for totalisation rules overview.

A summary of residence periods under the Indian Agreement can be viewed on the New Zealand and India Information (NZI) screen.

Unlike most other agreements, the Agreement with India refers to the Australian legislation to decide the income assessed and the maximum rate that is used but specifies the rate calculation process for a person outside Australia who is paid under the Agreement (Article 14.1). Additional child amounts are specifically excluded from the proportional rate.

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 does not apply

The Agreement specifies the proportional rate, which is the customer’s Australian Working Life Residence WLR after 16 November 1995 over a denominator of 540 months.

The Indian Agreement does not include the proportionalisation of any Indian 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 after 16 November 1995, 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 14.2).

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 are paid a direct deduction rate (Article 14.3). That is, all Indian 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 India 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 14.4).

Payments exempt under the Agreement are generally exempt for autonomous customers (section 8(8)(zc) Social Security Act 1991). See Assessment and exempt payments on the Indian payments tab.

Under the Agreement, provided the customer remains qualified, Australian Age Pension is payable indefinitely in Australia or India so long as the person remains a resident of either Australia or India (Article 5.1).

There is no portability 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 India 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 rate of payment. See Rate Calculation.

See Transfer 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 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.

The former resident provisions may affect customers who transfer to autonomous if they leave Australia again within two 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).

Employees’ Pension Scheme (EPS) 1995

• Retirement pension (AGE)
• Survivors’ pensions (SUR)
• Permanent Total Disability (INV) pension

Employees’ Provident Fund Scheme (EPF) 1952

• Lump sum payments

Employees’ Deposit Linked Insurance Scheme (EDLI) 1976

• Life insurance based payments

The requirement to claim Indian pension applies to Indian AGE pension only.

Note: Customers may voluntarily claim INV or SUR pensions. See Claims, forms and processes.

The Agreement defines a ‘period of insurance’ as ‘any period of contributions under the legislation of India, as well as any period recognised as equivalent to a period of contribution under that legislation’.

However, at this time, the Indian legislation only provides for paid contributions to count as periods of insurance.

The Eligibility and coding tab has detailed information on Indian payments that are subject to CFP legislation.

Claim pack available: there is a single claim pack for Indian AGE/INV/SUR.

The claim pack has the following:

• FORM 10D Application for Monthly Pension (EPS) (3 copies needed)
• EPS Instructions for completing FORM 10D
• FORM 19 Claim for final settlement from Provident Fund (EPF).
• EPF Instructions for completing FORM 19.

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

Specific requirements for Indian claims:

The customer is to complete and provide the following:

AGE/INV/SUR:

• Applicants must submit three copies of FORM 10D and three passport-size photographs.

SUR only:

• Death Certificate for the insured person.

Requests for Additional Information:

If information provided with the claim for Indian pension is incomplete, India will send requests for information in Hindi direct to customers.

Return of foreign pension claim:

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

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/Republic of India Agreement on Social Security Liaison Form (AUS187IN)

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

Send existing medical information for INV claims.

See the Exchange of information and liaison forms on the General information tab for Australian liaison forms.

Enquiries about claims for Indian payments in India should be directed to the Indian social security authority. See Authorities, Institutions and Liaison Agencies on the General information tab.

Indian payments may be paid by direct deposit in Australia.

Any queries about the non-payment of Indian pension should be directed to the Indian pension authority. See Authorities, Institutions and Liaison Agencies on the General information tab.

Customers receive 12 regular monthly payments. There are no bonus payments. Coded as 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'.

It is not currently known if payments will be made in AU dollars. However, foreign income must be recorded in source currency - Indian rupees (INR).

Note: amounts recorded in source currency on the FPD screen must not be changed to the AU dollar amount.

Indian pensions are only irregularly increased for cost of living (CPI) subject to economic factors.

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

Indian AGE, INV and SUR payments are ordinary income in all cases except direct deduction if paid under the Agreement in Australia (Article 14.3)

Note: in some cases, customers may receive a refund of contributions under the Employees’ Pension Scheme (EPS) or a final settlement under the Employees’ Provident Fund (EPF) scheme. Lump sums are assessable as ordinary income for 12 months from the date of receipt of the lump sum. See Other known payments.

Each member of a couple is deemed to receive half of the total amount received by the couple (Article 14.5).

Note: the 26 week temporary departure and return provisions apply (Article 14.2 and 14.4).

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 (SpB).

There are no exempt payments under the Agreement with India.

The Eligibility and coding tab has detailed information on the coding of Indian payments covered by the Agreement.

The Agreement does not include embargo provisions.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991, and recovered by normal methods under the Act. 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 Indian payment within their notification period. See Foreign Pension coding.

India issues life certificates annually to customers in Australia. Indian pension recipients must return the life certificate to the Indian Employees’ Provident Fund Organisation (EPFO) by November each year to make sure continuity of payment.

Indian life certificates can be certified by an officer of the department.

For general information about helping customers with life certificates and other requests, see Assisting customers to maintain an existing foreign pension.

Customers in Australia are sent notices at grant. It is currently not known if an annual statement is issued.

Lump sums maybe a:

• refund of contributions (under the Employees’ Pension Scheme - EPS), or
• payout of a small pension (under the Employees’ Provident Fund Scheme - EPF)

Assessable lump sums are:

• treated as ordinary income over 12 months from date of receipt (s1073 Social Security Act 1991), see Treatment of lump sums
• coded on the Foreign Income Details (FID) screen as Type: 'LMP’, see Treatment of lump sums

Note: if the customer has a claim in progress on FGS, but is not granted a foreign pension, FGD must be updated to FIN-NOM when lump sum FID coding is completed.

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

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