Estonia Agreement and foreign pension information 106-17111500

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

The Estonian pension system is divided between three different pillars:

• 1st pillar: State pensions - State pension insurance guarantees an income for people when they retire or in the event of them becoming incapacitated or losing their provider. State pensions are paid out from the social tax
• 2nd pillar: Funded pensions - The funded pension is based upon compulsory contributions from the individual and their employer. The state also adds a contribution from the social tax
• 3rd pillar: Supplementary funded pensions - Supplementary funded pensions are based on voluntary contributions by the individual

Note: the Agreement applies to the legislation governing mandatory state pension insurance (1st pillar: State pensions). This is the responsibility of the Social Insurance Board.

The Agreement with Estonia started on 1 January 2018. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Estonia:

Eesti Sotsiaalministeerium - Ministry of Social Affairs

For Australia:

Services Australia

For Estonia:

Sotsiaalkindlustusamet - Estonian Social Insurance Board

For Australia:

Centrelink International Services (CIS)

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

For Estonia:

See Competent institutions, above.

Under the Agreement with Estonia, 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 Centrelink International Services (CIS) and sent to Estonia:

• Australia/Estonia Agreement on Social Security - Liaison Form (AUS187EA)

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

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

• Liaison Form (EST/AUS2) - EA/AUS

This form is used in all communication from Estonia.

• Section 1 - Purpose: completed in all cases
• Section 2 - 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 3 - 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 4 - Insured person's insurance periods provided by Estonia: this section specifies the Estonian insured periods
• Section 4.2 - Notice of grant of Estonian pension: this section specifies date of lodgement, amount, including historical rates, arrears and type of Estonian pension
• Section 4.3 - Notice of rejection of Estonian pension: this section specifies the rejection reason/s
• Section 4.4 - Other information provided by Estonia: this section provides other information
• Section 5 - Information required by Estonia: this section specifies other information requested from Australia
• Section 6 - Certification: this section specifies who has completed the liaison form

Australian and Estonian 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 Estonia 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 Taxation information in International Social Security Agreements.

Tax treaty

Australia does not have a double tax agreement with Estonia.

Tax deductions

Estonian pensions may be taxed at source.

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

Estonian tax year

Estonia 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. Resources has a link to the contact details for Medicare

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 Estonia.

The official language of Estonia is Estonian.

Telephone country code is +372.

Street address

FirstName Surname [addressee]

Aia tn 1–23 [street name + building number + apartment number]

10615 Tallinn [post code + city/town/county]

ESTONIA

Rural address

FirstName Surname [addressee]

Mooska Farm [name of farm]

Haanja [name of village]

65601 Voru [post code + parish/county]

ESTONIA

Since 1 January 2016, same-sex couples may register their relationship as a cohabitation agreement, which gives them almost all the same legal protections available to opposite-sex couples.

For Australia, the Agreement with Estonia (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 Estonia can be obtained by contacting the Estonian authorities. See Authorities, Institutions and Liaison Agencies on the General information table, or Centrelink International Services (CIS).

Forms can also be downloaded from the Services Australia website. See Resources for a link.

For all payments:

• AUS140EA - Australian pension claim - Agreement with Estonia
• Mod(iA)EA - Income and Assets - Estonian

Forms can be lodged at any Estonian social security office.

Under the Administrative Arrangements, the Estonian institutions will:

• receive and date stamp the form (Section 9.1(a))
• verify identity and personal details (Section 9.1(b))
• send the claim and liaison form to Services Australia, including periods of insurance in Estonia and Estonian pension details (Section 9.2(b) and (c))

See Exchange of information and liaison forms in the Social Security Agreement between Australia and Estonia table, for the Estonian 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 Estonia to meet the residence rules for claims if, on that date, they are:

• an Australian resident or a resident of Estonia (Article 10(a)), and
• physically present in Australia or Estonia (Article 10(b))

There are no third country lodgement provisions. See the Claim lodgement matrix table of Claims for Australian payments under International Agreements.

The normal rules for working out the start day apply to a claim under the Agreement with Estonia. However, the Agreement also allows the date of lodgement of a claim for an Australian payment in Estonia to be used as the date of lodgement in Australia (Article 15.2).

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

The Estonian Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of coverage in Estonia 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 insurance 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 insurance in Estonia, with a break of up to three months in between, can also be considered to be continuous.

Estonian periods of coverage means an insurance period of:

• residence or employment,
• payment of social tax, and
• periods deemed as such according to the legislation

To be able to use the totalisation provisions, a person must have at least 12 months Australian WLR in Australia of which six months must be continuous. This provision applies to both a person who is an Australian resident or a resident of Estonia (Article 11.4).

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

The Agreement with Estonia (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 (Article 12.6).

This means:

• customers paid under the Agreement who are outside Australia are paid a proportional rate according to their Australian WLR, and
• the Rate Limiter/Limited Rate applies

The Estonian Agreement does not include the proportionalisation of any Estonian 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

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 information on the Country of Residence (CRES) screen will automatically apply the correct rate calculation.

Note: manual coding of the Residence Savings (RSS) screen will be needed for any returns to Australia before 9 June 2018.

If the return:

• is permanent - the field should be coded as 'N' to make sure the direct deduction rate applies immediately
• is temporary - the field should be coded as 'Y' to make sure the proportional rate is paid for the first 26 weeks

Customers in Australia under the Agreement with Estonia are paid a direct deduction rate (Article 12.3). That is, all Estonian payments covered by the Agreement. This includes social welfare payments, as they 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 Estonia 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

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 Estonian payments table.

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

There is no portability for a 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 Estonia when their normal portability period expires. The portability under the Agreement then applies. See Portability.

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 Transfer to international social security agreements.

A person who would be autonomously qualified but is paid under the Estonian 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.

The former resident provisions may affect customers who transfer to autonomous 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).

• Vanaduspension - Old Age Pension (AGE)
• Toitjakaotuspension - Survivor Pension (SUR)

Note: SUR is not payable to a person who is receiving an Estonian Old Age Pension or Australian Age Pension or Disability Support Pension.

• Estonian National Pension

Note: Estonian National Pension is only payable to residents of Estonia, and is not payable to a person who:

• has lived in Estonia for less than five years before applying for a pension, or
• is receiving a pension by virtue of an International Agreement, or
• receives a foreign pension, or
• does not have a valid Estonian residence permit

The requirement to claim applies to Estonian AGE.

Estonian 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.

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

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

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

Combined claim packs are available for AGE and SUR.

Specific requirements for Estonian claims

The customer is to complete and provide the following:

AGE only:

• Estonian Pension Application EST/AUS1 (original)
• Document showing Estonian Personal Identification Number (if available)
• Workbook verifying employment before 1 January 1999 (if available)
• Military card (if applicable)
• Document to prove study in Estonia (if applicable)

SUR only:

• Estonian Pension Application EST/AUS1 (original)
• Proof of death - Death Certificate
• Proof of marriage - Marriage Certificate
• Document showing Estonian Personal Identification Number (if available)
• Workbook verifying employment before 1 January 1999 (if available)
• Military card (if applicable)
• Document to prove study in Estonia (if applicable)
• Child/ren details - Birth/Education certificates

Note: Estonia will accept certified copies of the above documents as part of the claim process.

Requests for additional information

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

Return of foreign pension claim

Under the Administrative Arrangements, Estonian 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/Estonian Agreement on Social Security Liaison Form (AUS187EA)

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

Enquiries about claims for Estonian payments in Estonia should be directed to the Estonian social security authorities. See Authorities, Institutions and Liaison Agencies in the Social Security Agreement between Australia and Estonia table.

Payments can be made in Australia by direct deposit.

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

Estonian pensions are generally increased for cost of living (CPI) annually.

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

Estonian 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 Estonia (Article 12.3)

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

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

See also 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 Estonian payments under the Agreement.

The Eligibility and coding of foreign pensions tab has detailed information on the coding of Estonian 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. 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 Estonian payment within their notification period. See Foreign pension coding.

Estonian life certificates (Life Certificate - ELAMISE TÕEND) are needed each year.

Estonian pension recipients who live outside Estonia must submit a 'Life Certificate - ELAMISE TÕEND', for continued payment of their Estonian pension to the Estonian pension authority each year between 1 December and 1 March.

Estonian life certificates can be certified by an officer of Services Australia. 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 AU dollar amount.

Assessment: Ordinary income.

Coding:

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

Funded Pensions are compulsory contributive pensions paid by Pensionikeskus. Contributions to Funded Pensions are mandatory for persons born from 1983 onwards.

Assessment: Ordinary income.

Coding:

Code as Type: 'SUP' on the Foreign Pension Details (FPD) screen in the Basic Amount field.

Supplementary Funded Pensions are non-compulsory contributive pensions paid by the following Estonian insurance companies:

• Compensa Life Vienna Insurance Group SE
• ERGO Life Insurance SE Eesti filiaal
• Mandatum Life Insurance Baltic SE
• SEB Elu- ja Pensionikindlustus AS
• Swedbank Life Insurance SE

Assessment: Ordinary income.

Coding:

Code as Type: 'SUP' on the Foreign Pension Details (FPD) screen in the Basic Amount field.

For help with coding:

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