NICK BRUINING: Centrelink supplement payments to go for age pensioners on extended trips or living overseas

Australian seniors who are planning an extended stay overseas need to be aware of significant changes that kicked in a few weeks ago.

The changes, which came in on September 20, affect the rates of payment for people who leave Australia after that date, but also those currently living overseas.

The full fortnightly pension payment of $1237.70 for singles and $933 each for couples is made up of three separate components.

For a single, the “basic” rate of pension is $1135.40, topped up with an energy supplement of $14.10 and a general pension supplement of $88.20 a fortnight. The latter is a combination of older separate supplements including payments to help with pharmaceuticals, telephone, internet and utilities.

Each member of a couple receives a base pension of $855.90 plus $10.60 for energy and a general supplement of $66.50.

From September 20, someone overseas will continue to get the full pension supplement for 12 weeks — an increase of six weeks — but after that time it will cut out entirely. Previously, a smaller basic supplement would continue indefinitely.

Pensioners who left before September 20, or on that date and have been away for more than 12 weeks, will lose the supplement entirely.

Under a quirk in the system, Australian residents receiving a means-tested pension always receive a minimum supplement, which for a single is $61.60 a fortnight, and for eligible couples is $46.40 each.

Similarly, if you are away for more than six months or living permanently overseas, the time you were an Australian resident affects your payment. To continue to receive the maximum amount you will need to have lived in Australia for 35 years or more since turning 16. Less than 35, and the pension is apportioned based on the time you lived here.

The clock starts ticking the moment you leave the country, with Department of Immigration data linked to Centrelink’s systems.

The loss of all supplement payments for those living overseas also means the upper cut-off means test thresholds for singles and couples is reduced when compared with Aussie residents.

The income test threshold reduces by a combined $52.50 a fortnight for couples and at least $32.50 for singles. While there’s no actual reduction in the upper asset test cut-off thresholds, the allowable assets are at least $30,000 less for an overseas resident, whether a single or a couple.

Income and assets from overseas sources is added to Australian-based income and assets, and the normal means test rules apply.

While some ex-pats receiving an Australian pension might “forget” to notify Centrelink of their overseas income and assets, improved data-sharing arrangements means the risk of being found out is steadily increasing.

Being met by the Australian Federal Police when you come back to visit might not be the welcome you expected.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association