Age Pension – The ultimate guide for Australian Expats

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Age Pension – The ultimate guide for Australian Expats

Every year more Australians are looking overseas to start their retirement in paradise. Whether it be for a lower cost of living, warmer climate or because they enjoy more exotic surroundings. As a financial planner one of the most common topics I get asked about is “am I eligible for the age pension?” and this article will set out to give you aussie retirement advice in Thailand.

There will be a few surprising facts and figures in this article, such as the ’35 year rule’ trumping the ‘2 year rule’ and how your income vs. assets may affect what you’re entitled to.

*WARNING* this is a long article, and for a good reason; there are many factors in play here, if you find yourself getting half way through this article and it’s not answering the specific question you are looking for, please send me an e-mail directly to or simply message me your question to my linkedin profile:

Before we get started it’s important to note that everyone is different and the laws surrounding your eligibility and potential entitlement are unique and do change. This article was originally written in July 2018. If you have concerns about your pension you can contact the Department of Human Services (Centrelink) HERE.

Contact the Department of Human Services. 132 300 within Australia or the international number: +61 3 6222 3455

Sydney Harbour Bridge

The three key requirements.

Eligibility basics

Before you can wring a single dollar out of the DHS coffers, you need to make sure you tick all three of these key boxes. These are the ‘must do’ milestones for getting the Australian Age Pension.

  • Reached age pension age
  • Under the income and assets test limits
  • An Australian resident, normally for at least 10 years

When can I get my age pension?

When can I get my age pension?How much are we talking about?

To start the conversation lets get a grasp on what the age pension is ‘worth’ to you and your retirement, you might be very surprised so make sure you read the final calculations below.

Let’s use the maximum single rate as a benchmark to do the maths. The average Australian life expectancy is 82.45 years of age as of 2015 and we are assuming you will be receiving $907.2 per fortnight and can access your age pension at 65 years of age. 82.45 – 65 = 17.45 years of pension.

$907.2 x 26 ÷ 12 gets us a monthly income $1965.60 x 12 months in a year = $23,587.2 AUD per annum. Now if we multiply that by 17.45 then you get a total pension worth $411,596.64 and that can certainly be a life changing sum of money for retirees.

Calculating what you are eligible to receive.

Hopefully the above has made you curious enough to calculate your own pension income, so lets move onto that stage.


There are two tests to determine what you are eligible for, ‘income’ and ‘assets’, so lets start with Income.

The government measures your ‘income’ on ALL sources. To think of it simply, if money is coming into your bank account from another source, that is more than likely going to be considered ‘income’. This includes superannuation income as well as dividend paying shares, property rental or overseas income.

So let’s say for example you are earning $50,000 a year from your superannuation draw down and investment property rental income. $50,000 as an annual income is $1,923.08 per fortnight. So $1923.08 – $172 = $1,751.08 x 0.5 = $875.54 which means your $907.5 per fortnight pension would be reduced by $875.54 leaving you with a pension of $31.96

*Note: This is not for ‘transitional pension’ income.

Cut-off point:

If you’re lucky enough to be earning over $51,667.20 per annum from your retirement income sources it’s likely that you would have reached the ‘cut-off’ point and your age pension entitlements would be reduced to $0. The second thing to keep in mind is that the payments may be lower if you don’t live in Australia (more on that below).

Asset Test:

The income test is the first hurdle to receiving your pension, the second is the ‘asset’ test which we will get into now.

Calculating your assets*:

*This is a complex process and has many caveats and being a ‘non resident’ for tax purposes may further compound the complexity. You can view the information provided by the Australian government here at the ASSETS page of DHS, if you are at all unsure I would strongly advise speaking with an Australian qualified financial planner or directly with DHS.

Contact the Department of Human Services. 132 300 within Australia or the international number: +61 3 6222 3455

My father always drummed the adage ‘keep it simple stupid’ into my head. So given that, let’s start with the dollar figure where assets begin to effect your pension, if you’re below this figure then nothing to worry about.

The above figures consists of the following:

Expats and the Age Pension.

This is the part which I get asked the most and considering that I am a financial planner for an international brokerage a large portion of my personal clients are ‘expats’.

  • Am I eligible to get the Age pension as an expat?
  • What do I need to do to ensure I receive the aged pension?
  • How do I apply for the aged pension?
  • How can they pay it to me?

Am I eligible to get the Age pension as an expat?

Even if you head back to Australia for two years (which is the most common strategy) that does NOT guarantee that you’ll be able to receive the full Age Pension, it also depends on how many years you were an Australian resident from the age of 16 until the age you left Australia.

If you were an Australian resident for:

  • 35 years or more your rate normally won’t change and you’ll be entitled for the full pension (as long as you meet the Income/Assets test).
  • less than 35 years you’ll normally get a lower rate, for example, if you were a resident for 10 years you’ll get 10/35ths of your usual rate

So if you left Australia as an expat at the age of 26 and you didn’t return until you were 56, assuming you were eligible at the age of 65, that gives you 19 years as an Australian resident. You would then only be entitled to 19/35ths or 54% of the Age Pension.

International Social Security Agreements:

If you are lucky enough to live in a country that has a social security agreement with Austrlaia, then you may be able to use that countries social security agreement to get the Australian Age Pension, there are 31 countries that Australia has agreements with.

Check the list of countries HERE

What do I need to do to ensure I receive the aged pension?

You must be an Australian Resident and be in Australia on the day you claim the Age Pension. You need to have been an Australian resident for 10 years, with at least 5 of those years being consecutive.

Your benefits may begin to be affected when you are out of country for as little as 6 weeks, so be cautious all you grey nomads who like extended international holidays (but please enjoy yourselves!)

Your rate will reduce ever so slightly from the $23,587.20 you are entitled to as a tax paying resident down to a maximum of $22,089.60

When you leave Australia for less than 6 weeks

Your Age Pension rate normally won’t change.

When you leave Australia for more than 6 weeks your:

  • Pension Supplement will drop to the basic rate, and
  • Energy Supplement will stop

When you leave Australia for more than 26 weeks

Your rate will depend on how long you were an Australian resident between the age of 16 and age pension age.

If you were an Australian resident for:

  • 35 years or more your rate normally won’t change
  • less than 35 years you’ll normally get a lower rate, for example, if you were a resident for 10 years you’ll get 10/35ths of your usual rate

Your rate normally won’t change if you:

  • were an Australian resident for 25 years or more, and
  • were getting Age Pension or another Australian social security payment while living outside Australia on 1 July 2014

The ‘2 year rule’ for Australian expats.

You must be an Australian resident for at least 2 years prior to claiming the Age Pension. A lot of Austrlaian expats decide to head back to Australia for 2 years to ensure they can claim. I think this is a great idea, as people change and so do countries. Spending some time back in the homeland may re-ignite your love for the country or may remind you why you became an expat in the first place.

The reason why this ‘2 year rule’ is way down the bottom of the article, is so that you can ensure you meet all the key criteria before you waste your time selling your worldly belongings and returning to Australia for naught.

How do I apply for the Age Pension?

Since you’re obviously a Young and Upwardly Mobile Professional who’s reading this on linkedin, I’m going to also assume you either already have a MyGov account, or at least can register for one. MyGov is the Australian government portal that allows you to check your Superannuation, file taxes and claim payments.

You can find the MyGov website HERE

How they make payments

Payments outside Australia are normally made by direct deposit. In exceptional circumstances you may be able to be paid by cheque.

Direct deposit payments

They can put your payment straight into your bank account. This can be a bank account held in or outside Australia. Amounts deposited will be available within 2 to 6 days after issue.

If you don’t get your payment within 10 days of us issuing it, contact your local bank before notifying them. If you are being paid into an Australian bank account, they will pay in Australian dollars.

They will usually pay you in the currency of the country in which the payment is going.

Final Notes

If you’ve read this far, well done! I truly hope this 3,500+ word article has been helpful in explaining your access and rights. If you, or someone you know needs some financial planning send us an e-mail at

Ryan Cullinan: +66 955 487 022

*This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice I do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.[/vc_column_text][/vc_column][/vc_row]

Please note that information on this website is strictly for education purposes only and does not constitute advice, please seek a licensed professional before investing. See more details here.

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