Australia and Korea - Frequently Asked Questions 

Note: The following information is provided as a guide only. People should contact Centrelink International Services on 131 673 for specific information relating to their circumstances.



When did the Agreement start?

The Agreement started on 1 October 2008.

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What does the Agreement do?

Under the Agreement, Australia and Korea share the responsibility for paying pensions to people who would not otherwise be entitled because they do not have enough residence in Australia or sufficient periods of coverage in Korea. It also helps people who could not otherwise claim because they are living abroad.

The Agreement also reduces costs for businesses operating in both countries through provisions regulating compulsory contributions in respect of seconded workers.

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What payments are covered by the Agreement?

The social security pensions that will be covered by the Agreement are as follows:

Australia

age pension
 

Korea

the Korean old-age pension and lump sum refund.

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What are the main features of the Agreement?

Australian legislation requires a person to have a minimum of 10 years Australian residence before they can claim an age pension. It also requires the person to be an Australian resident and in Australia on the day the claim for pension is lodged.

The Agreement allows people to use Korean periods of coverage to make up the 10 years Australian residence required to qualify for age pension or disability support pension.

The Agreement also allows a person to claim an Australian pension while residing in Korea.

Note: To use the Agreement to claim an Australian pension while residing in Korea, a person must have actually resided in Australia during their working life (Australian working life residence is residence in Australia between age 16 years and age pension age) for a minimum of 12 months.

Centrelink has information on residency requirements for payments covered by the Agreement.

Korean legislation requires a person to have at least 10 years of qualifying periods of contributions to be eligible for an Old-age pension.

The Agreement allows people to use certain employment related periods of Australian working life residence in order to meet the minimum periods of contributions required to qualify for a Korean pension.

Alternatively, lump-sum refunds may be made to Australian nationals who have left Korea if they have less than 10 years of contributions to the Korean National Pension Service (NPS).

Note: To use the Agreement to qualify for a Korean old-age pension or a lump-sum refund a person must have completed at least one year of contributions into the Korean pension system.

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How do seconded workers benefit under the Agreement?

The Coverage Provisions mean that contributions do not have to be made into both countries' systems for an employee seconded to work temporarily in the other country. The Australian Taxation Office is responsible for the administration of the coverage provisions. Contact the ATO if you require more information on this aspect of the Agreement.

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Where and how can people lodge claims for social security pensions?

In Australia

People living in Australia can lodge claims for Australian and Korean pension or lump-sum refund with any Centrelink office.
 

In Korea

People living in Korea can lodge claims for Korean and Australian pension at the Korean National Pension Service (NPS).

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When does payment start?

In Australia's case, payment starts from the date the claim is lodged, or if the claim is lodged early, the date the person qualifies for payment.

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How are pensions and benefits paid?

If you get an Australian pension in Australia, Centrelink will pay it directly into your bank account every 2 weeks.

If you get a pension from Korea it can be paid to you in Australia.

Some people might get pensions from both countries so they will get two separate payments - one from Australia and one from Korea.

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Who handles claims and questions?

Claims and questions relating to the Agreement are handled:

  • for Korea, by contacting the:

    Korean National Pension Service
    Songpa-gu
    Republic of Korea
    Phone: 82 2 2240 1114
    Fax: 82 2 424 9209

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What documents do I need to make a claim?

Australian Pensions

When you claim an Australian pension you need to complete a claim form and provide documents to prove your identity and periods of residence in Australia.

Proof of Identity
Some of the acceptable documents to prove your identity are:

  • birth certificate of extract;
  • current Australian passport;
  • certificate of Australian citizenship.

Helpful documents that can assist you to do this include:

  • Australian or overseas passport that shows your date of arrival in Australia;
  • Entry visa;
  • Australian citizenship papers;
  • Employment and/or tax records, including group certificates issued by Australian employers.

Note: This is only some of the documents that can be used to prove your identity and your Australian residence. Centrelink is able to provide more information on other acceptable documents to prove your identity and Australian residence.

If you are claiming an Australian pension while you are living in Korea, you will still have to provide proof of identity and proof of previous Australian residence to the Korean authorities.



Korean Benefits

The Korean authorities (NPS) can advise you of the documentation you need to provide.

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What are the most important things to know about the Australian social security system?

All claimants for Australian pensions need to meet all qualifications (e.g. age and residence) required for that pension under Australia's social security laws. Australian pensions are also means tested, that is, an assets and an income test is applied, and whichever produces the lower rate is used for assessment. Centrelink has information about the current income and assets test limits.

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How much pension will I get if I am paid under the Agreement?

Australian pension for a person not living in Australia

The rate of Australian pension payable outside of Australia is affected by two things:

  • the length of Australian working life residence; and
  • the amount of income and assets in excess of specified limits.

Australian pensions paid overseas are paid at a proportional rate reflecting the length of Australian working life residence. A person with 25 years Australian working life residence (between age 16 and age pension age) could be paid a full age pension (subject to the means test). With less than 25 years, the rate is worked out on a proportional basis. For example, a person with 20 years Australian working life residence would receive 20/25ths (or 80%) of the means-tested rate of Australian pension.

The income and assets tests also apply, so that a person with 25 years Australian working life residence could still receive a part pension if their income or assets exceed allowable limits. Centrelink has more information about the current income and assets tests.
 

Australian pension for a person living in Australia

When a person is granted a pension in Australia under the Agreement (because the person does not meet the minimum residence requirements), the person receives the normal means tested pension less the amount of any Korean pension they also receive. The Korean old-age pension is 'topped up' to the rate of Australian pension the person would get if all they received were an Australian pension.

Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Korean benefit is treated as income in the normal way.

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Can I get a lump-sum refunds of Korean contributions?

A lump-sum refund of Korean contributions to the National Pension Service (NPS) can be made if a person has less than 10 years contributions to the NPS.

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Examples

Example 1

A person who lived in Australia for 20 years during working life (between age 16 and age pension age) is now living in Korea and is already receiving a Korean old-age pension. This person left Australia before reaching age pension age.

Entitlement

  • Without the Agreement
    Although this person has more than the 10 years Australian residence required to qualify for Australian age pension, they do not qualify for payment because the person is not an Australian resident and physically present in Australia.
  • With the Agreement
    This person can now claim an Australian benefit without the need to return to Australia to live permanently. The Australian pension rate will be proportionalised based on their Australian working life residence, that is, the person will receive 20/25ths of the means tested rate.

Example 2

A woman aged 65 living in Korea has also lived in Australia for 9 years during her working life (between age 16 years and Age Pension age). She has completed a period of 5 years of contributions in Korea.

Entitlement

  • Without the Agreement
    She does not qualify for Australian pension because she is not living in Australia and nor does she have the minimum 10 years of Australian residence required to qualify for Australian Age pension. Also, she would not qualify for Korean old-age pension as she has not completed the minimum period of contributions required (currently 10 years) to qualify for payment.
  • With the Agreement
    She can claim and qualify for an Australian Age pension in Korea because her 9 years Australian residence plus the periods of contributions in Korea add up to more than the 10 years required for an Australian pension. Her rate of payment would be 9/25ths of the means-tested rate, payable if she was in Australia.

    She would also qualify for a Korean old- pension because she can add her 9 years of employment related Australian working life residence to the 5 years of contributions in Korea to meet the minimum period of contributions (10 years) that is required to qualify for payment.

Example 3

A 65 year old man in Korea has the minimum period of contributions in Korea to qualify for old-age pension. He has lived in Australia for 9 months during his working life.

Entitlement

  • Without the Agreement
    This person is entitled to Korean pension only. No Australian pension can be paid.
  • With the Agreement
    This person will continue to receive Korean pension. However, he is still not entitled to Australian pension because he only has 9 months Australian residence (12 months minimum required).

Example 4

A person is aged 65 and has lived in Australia for 6 years. Before moving to Australia he lived in Korea and completed a period of contributions in the Korean system for 35 years. He now wishes to claim an Australian pension.

Entitlement

  • Without the Agreement
    He could not get an Australian Age pension because he has not lived in Australia for more than 10 years.
  • With the Agreement
    The person can add his 6 years as an Australian resident to the 35 years periods of contributions completed in Korea so that he meets the minimum 10 years Australian residence required to qualify for an Australian Age pension.

    Also, Centrelink can assist him in claiming Korean old-age pension.

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How do I find out more?

For more information, please contact International Branch.

For information on claim procedures and payments, please contact Centrelink International Services.

Centrelink International Services
GPO Box 273
HOBART TAS 7001

For more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.

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