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Retirement PlanningSeptember 26, 2023

Australian Pensions

Hoxton BlogAustralian Pensions

  • Retirement Planning

The Australian Pension, known as the “Age Pension”, is a government social security scheme which pays out a steady income to retirees to help them cope with the costs of living when they’re retired.

Do I qualify for an Australian Pension?

Eligibility is determined by the Australian Working Life Residency (AWLR) rule, which measures how many years you’ve lived (though not necessarily worked) in Australia between the ages of 16 and 65. If you have 35 years or more, you’re entitled to the full amount of Age Pension.

  • How much Australian Pension will I get?

    The Age Pension is means-tested, so how much you receive depends on how much you earn and the value of your assets and investments, such as property, businesses, jewelry, life insurance policies, cars, etc. The Age Pension is also subject to change as your personal circumstances change.

    The amount payable tapers off as your income rises, and you won’t receive any Age Pension once it reaches A$2,004.60 per fortnight for single people, and A$3,066.80 per fortnight for couples.

  • Can I take my Age Pension overseas?

    You can normally receive your Age Pension indefinitely, should you choose to retire abroad. The amount you receive is based on how long you’re away for, if your income and assets change while you’re away, and if your pension is through a social security agreement with another country.

    After six weeks overseas, your Age Pension will switch to the ‘outside Australia rate’, meaning your Pension Supplement stops.

    After 26 weeks overseas, your pension amount will be proportional to your AWLR number of years. For example, if you have 20 years of AWLR, then you’ll be entitled to 20/35ths of your current Age Pension after 26 weeks.

    This means pensioners can go overseas for 26 weeks and still receive their regular Age Pension, less the supplement. The majority of pensioners can stay overseas indefinitely and the Age Pension will continue to be paid into either an Australian bank account or a foreign bank account.

  • What are the options for younger expats regarding their Australian Pension?

    If you get the opportunity to move abroad during your working life, you need to be aware of how Australian residency status, AWLR and reciprocal social security agreements will affect your future eligibility. You need at least 10 years’ AWLR in order to qualify for the Australian Age Pension, and you’ll be expected to claim your foreign pensions first. If you intend to leave Australia permanently, you should look into claiming your superannuation (employer-sponsored private pension) as a lump sum.

    However, if you come back to live in Australia and start getting the Age Pension, your payment stops if you go overseas during the following 2 years.

  • Do you need advice regarding your Australian pension?

    The rules around the Australian Age Pension payments are complex and can change. Cross-border superannuation planning is always on a case-by-case basis. It’s best to consult with a specialist; speak our financial advisers to get the latest information and help with moving your Australian Pension overseas.

How Can We Help You?

If you would like to speak to one of our advisers, please get in touch today.

“Michael Yuille has been great to work with in planning my retirement. He's been very attentive and offers sound financial advice. Michael's assistant, Strawberry Palacio, has been helpful with good communication and assisting me in establishing my account.”

A Webster

08, May

“I want to recommend Hoxton and in particular, Bernadeth Tagadtad and Bhavin Vaja who have helped me transfer my UK pension to Australia. It was a long and complex process and I could not have managed without them. They did everything possible to make the process run as smoothly as it could.”

J Ross

08, May

“Two years plus with Rob of Hoxton Wealth has provided dividends in the value of my pension. I have found Rob and Lea most friendly, capable and efficient”

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06, May

“I have been working with Richard Cawley and Lalith Mangalarapu at Hoxton for the last few months on the best way as an Australian citizen to access my US401K plan. They have listened, understood what I'm after, given great advice and suggestions and put me in touch with tax experts as well. I spoke to quite a few other firms before finding Hoxton, and I did not progress those conversations. Richard and Lalith are very easy to get along with and I feel we work well together as a team.”

B Moncrieff

05, May

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Hoxton Wealth

September 26, 2023

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