Social Security Agreement between Australia and Canada - 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?
- What about people who are being paid under the previous Agreement?
- What does the Agreement do?
- What payments does the Agreement cover?
- What are the main features of the Agreement?
- Where and how are claims made?
- When does payment start?
- How are Agreement pensions and benefits paid?
- Who handles claims and questions?
- What documents do I need to make a claim?
- What are the important things to know about the Australian Social Security System?
- How much pension will I get if I am paid under this Agreement?
- How do I find out more?
When did the Agreement start?
The original Agreement with Canada started on 1 September 1989 (the 1988 Agreement). This Agreement has been updated and replaced with a new Agreement which commenced from 1 January 2003 (the 2001 Agreement).
What about people who are being paid under the previous Agreement?
The 2001 Agreement contains provisions which protect people being paid under the 1988 Agreement. These people will continue to be paid under the 2001 Agreement while they remain qualified under the 1988 Agreement.
What does the Agreement do?
Under the Agreement Australia and Canada share responsibility for paying pensions to people who would otherwise not be entitled because they do not have sufficient periods of contributions to the Canada Pension Plan (CPP) or residence in Australia or Canada. It also helps people who could not otherwise claim a pension because they are living abroad.
The Agreement will allow many people to get two pensions, one from each country.
What payments does the agreement cover?
The social security benefits covered by the Agreement are as follows:
- Age Pension
- Disability Support Pension (DSP) for the severely disabled
- Carer Payment
- pensions for widowed persons - includes Parenting Payment (single) for de jure widows and surviving de facto spouses, and Bereavement Allowance, and
- additional child amount for pensioners with dependent children
- old age security pension, guaranteed income supplement, spouse's allowance
- retirement pension
- disability pension
- survivor's pension
- disabled contributor's child's benefit
- orphan's pension, and
- death benefit
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 Age Pension or Disability Support Pension (this rule changes if the person becomes disabled after they take up permanent residence in Australia). It also requires you to be an Australian resident and in Australia to claim a pension.
Note: Parenting Payment (single) and Bereavement Allowance have different residence requirements to Age Pension and Disability Support Pension.
Canadian legislation requires minimum periods of contributions to the Canada Pension Plan (CPP) for retirement, disability and survivor’s pensions. For entitlement to the Old Age Security (OAS) pension, minimum periods of residence in Canada are required.
Under the Agreement, periods of working life residence in Australia are treated by Canada as contributions to the CPP or residence in Canada. In the same way, Canadian periods of residence or contributions are treated by Australia as periods of residence in Australia.
Note: Only periods of contributions to the CPP count for Disability Support Pension or pensions for widows.
These periods are added together to meet the minimum periods required for the pensions offered by each country under the Agreement. These deemed periods do not affect the amount of pension.
A person who resides in Canada could claim a pension from Australia without having to return to Australia for the purpose. Without the Agreement, the person must be residing in Australia in order to claim an Australian pension.
Where and how are claims made?
People living in Australia can lodge claims for Canadian and Australian pensions with any Centrelink Customer Service Centre. Centrelink will supply all the necessary claim forms.
People living in Canada can lodge claims for Australian and Canadian pensions with their local Service Centre of Employment and Social Development Canada. Details of Service Centre locations can be found on the Employment and Social Development Canada website.
When does payment start?
In Australia's case, this is the first payday after lodgement of the claim for which the person was qualified. Age Pension claims can be lodged up to 3 months in advance of qualification.
How are Agreement pensions and benefits paid?
If you get a pension from Australia, the Department of Human Services will pay it directly into your bank account every two weeks.
If, however, you are living overseas, your pension will be paid directly into your nominated bank account every 4 weeks. Payments to bank accounts in Canada are in Canadian Dollars.
Canada will pay its own pensions and benefits through Employment and Social Development Canada.
Some people might get pensions from both countries so they will get two separate payments - one from Australia and one from Canada.
Who handles claims and questions?
Claims and questions under the Agreement are handled:
- for Australia - by Centrelink International Services.
- for Canada - by Income Security Programs, Employment and Social Development Canada
What documents do I need to make a claim?
When you claim an Australian pension you will need to complete a claim form and provide documents to prove your identity and periods of residence in Australia.
Proof of Identity
Some acceptable documents to prove you identity include:
- birth certificate or extract
- current Australian passport
- certificate of Australian citizenship
Proof of Australian Residence
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 employees
Note: These are only a few of the documents that can be used to prove your identity and your Australian residence. The Department of Human Services 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 Canada, you will still have to provide proof of identity and proof of previous Australian residence.
The Canadian authorities will advise what documentation you need to provide.
You will need to complete a claim form and provide documents to show identity, date of birth, marriage, etc. The most helpful documents are:
- birth certificate and passports (including expired and foreign passports) and naturalisation/citizenship papers
- marriage certificate and birth certificates for any dependent children
- death certificates or divorce papers if applicable
- any documents proving periods of residence in Australia, and
- any other documents which could be useful, for example, documents proving periods of contributions or residence in Canada, or if claiming DSP, documentation pertaining to your disability
What are the important things to know about the Australian Social Security System?
All claimants for Australian Agreement pensions need to meet the other qualifications (e.g. age limits, income or assets tests) required for that pension under Australia's social security laws. Australian pensions are means tested: i.e. an assets test is applied, and then an income test, and whichever test produces the lower rate is used for the assessment. The pension rate is not affected by income and assets at the same time. For information about the current income and assets test limits, visit the Department of Human Services website.
If you wish to count your Australian residence as periods of Canadian contributions or residence, so that you can qualify for Canadian pension, only residence between age 16 and Age Pension age can be considered. The Age Pension age for men is 65. The Age Pension age for women is gradually being increased to 65 – see the Department of Human Services website - Age Pension for details of Age Pension ages for women.
Australian pensions for people who are outside Australia are calculated differently to pensions for those who are inside Australia.
How much pension will I get if I am paid under this agreement?
Australian pension for a person not living in Australia
The rates of Australian pension payable outside of Australia are affected by two things:
- length of residence in Australia during working life; and
- the amount of income or assets in excess of specified limits.
Australian pensions paid overseas are paid at a proportional rate reflecting the length of residence in Australia. For claims since 1 July 2014, a person with 35 years' residence during working life (between age 16 and Age Pension age) could be paid a full pension (subject to the means test). With less than the 35 years, the rate is worked out on a proportional basis, so that someone with 20 years' working life residence would receive 20/35ths (or 57 per cent) of the pension rate.
The income and assets tests also apply, so that a person with 35 years of working life residence in Australia could still receive only a part pension if their income or assets exceeded the threshold limits. For information about the current income and assets test limits, visit the Department of Human Services website.
When a pension is paid overseas a concession may apply on the proportion of any Canadian contributory pension received which is counted as income for the income test. This also applies to pensions granted without the assistance of the Agreement.
Also, when any Australian pension is paid to a person in Canada, any means-tested Canadian pensions that the person also receives (like guaranteed income supplement) is not counted as income for Australian pension.
Australian pension for a person living in Australia
When a pension is granted in Australia under the Agreement (because of lack of residence), the person receives the normal means-tested pension less the amount of any Canadian pension they also receive. The Canadian pension is 'topped up' to the rate of Australian pension they would get if there was no Canadian pension.
However, sometimes this 'top-up' rate could be less than the person would get if they were living overseas and receiving a proportional Australian pension. When this is the case, the higher 'outside Australia' rate is paid, even though the person is in Australia.
Following are some examples of how the Agreement assists people living in Canada
A person who lived for 20 years in Australia during working life (between age 16 and Age Pension age) is now living in Canada and is already receiving a Canadian pension. This person left Australia before reaching Age Pension age and therefore does not get an Australian pension.
- Without an Agreement
Although this person has more than the 10 years required for an Australian Age Pension, a claim cannot be made as the person is not an Australian resident and in Australia.
- With the Agreement
Australian pension could be claimed and paid in Canada. The Australian pension rate would be proportionalised; 20/35ths of the means-tested rate would be paid.
A 65-year-old man in Canada has 16 years of contributions in Canada but has lived in Australia for only 9 months.
- Without an Agreement
This person would be entitled to a Canadian pension only. No Australian pension could be paid because of lack of Australian residence and also because he is not living in Australia
- With the Agreement
No change. This person will still receive Canadian pension but would not be entitled to Australian pension because the minimum period of Australian residence required for the grant of Australian pension to a person living outside Australia is 1 year.
A woman aged 62 has lived in Australia for 8 years during working life (between age 16 and Age Pension age). She has 15 years of contributions in Canada. She is now living in Canada.
- Without an Agreement
She would not be able to claim an Australian pension but she would be eligible to claim a Canadian pension.
- With the Agreement
She would be able to claim an Australian Age Pension in Canada because her 8 years' residence plus total periods of Canadian contributions add up to more than 10 years. Her rate of payment would be 8/35ths of the full rate, subject to the means test. She would still receive a Canadian pension. If she was receiving guaranteed income supplement, there might be a reduction in that when Australian pension is granted.
How do I find out more?
For more information on claim procedures and payments:
- Contact Centrelink International Services.
- Visit your local Centrelink Customer Service Centre.
- Department of Human Services Publications - Australia's International Social Security Agreements Factsheets
For policy information, contact the Department of Social Services (email@example.com).
For more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.