Social Security Agreement between Australia and Chile - 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 does the Agreement do?
- What payments are covered by the Agreement?
- What are the main features of the Agreement?
- How do seconded workers benefit under the Agreement?
- Where and how do people lodge claims for social security pensions?
- 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 most important things to know about the Australian social security system?
- How much pension will I get if I am paid under the Agreement?
- How do I find out more?
The Agreement started on 1 July 2004.
Under the Agreement, Australia and Chile 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 insurance in Chile. It also helps people who could not otherwise claim because they are living abroad.
The social security pensions covered by the Agreement are as follows:
- Age Pension
- Disability Support Pension for the severely disabled
- old-age pension
- invalidity pension
- survivor pension
Australian legislation requires a person to have a minimum of 10 years Australian residence before they can claim an 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 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 Chilean periods of insurance 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 Chile.
Note: To use the Agreement to claim an Australian pension while residing in Chile, a person must have actually resided in Australia during their working life (Australian working life residence is between age of 16 years and Age Pension age) for a minimum of 12 months.
A special feature of this Agreement is the inclusion of provisions that exempts Chilean Pensions of Mercy from the calculation of the rate of all Australia's social security payments. These payments were established by law to compensate and repair the moral suffering of the victims and relatives of victims of human rights abuse or political violence that occurred in Chile between 11 September 1973 and 10 March 1990.
Chilean legislation requires a person to have completed specified periods of contributions or periods of insurance to qualify for pensions. This varies depending on a person's age and the type of pension they are claiming. For example, a person aged 65 must have completed a period of 1,040 weeks of insurance to qualify for payment.
The Agreement allows people to use periods of Australian working life residence in order to meet the minimum periods of insurance required to qualify for Chilean pensions covered by the Agreement.
Note: To use the Agreement to qualify for Chilean pension a person must have completed a minimum period of insurance of one year.
The Agreement contains provisions which mean that contributions do not have to be made into both country's compulsory pension/superannuation systems for an employee seconded to work temporarily in the other country. The Australian Taxation Office is responsible for the administration of these provisions. Contact the Australian Taxation Office if you require more information on this aspect of the Agreement.
People living in Australia are able to lodge claims for Australian and Chilean pension with any Centrelink Customer Service Centre.
People living in Chile are able to lodge claims for Chilean and Australian pensions at offices of the:
- Administradoras de Fondos Pensiones, or
- Instituto de Normalizacion Previsional.
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.
If you get an Australian pension in Australia, the Department of Human Services will pay it directly into your bank account every 2 weeks.
If you get an Australian pension and you reside permanently in Chile, the Department of Human Services will pay it into your nominated Chilean bank account every 4 weeks. Payments to customers in Chile are in US Dollars.
If you get a pension from Chile 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 Chile.
For Australian payments, you can contact:
- Centrelink International Services on 13 1673
- Australian pensioners residing in Chile will be able to contact Centrelink International Services on +61 3 6222 3455 (call charges apply)
For Chilean payments, you can contact:
- Superintendencia de Seguridad Social for people who have contributed to the social insurance schemes administered by the Instituto de Normalición Previsional. You can write to them at Huérfanos 1376, Piso 6, Santiago, Chile. Or telephone them on 0011 562 6204500
- Superintendencia de Administradoras de Fondos de Pensiones for people who are or were members of the Sistema de Capitalización Individual. You can write to them at Huérfanos 1273, Piso 2, Santiago Chile. Or you can telephone them on 0011 562 7530100.
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 of the acceptable documents to prove your identity are:
- 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 employers
Note: This is only a few 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 Chile, you will still have to provide proof of identity and proof of previous Australian residence to the Chilean authorities.
The Chilean authorities will advise you of the documentation you will need to provide.
All claimants for Australian Agreement pensions need to meet other qualifications (e.g. age limits, income or assets test) required for that pension under Australia's social security laws. Australian pensions are means tested, that is, an assets test is applied and then an income test is applied, and whichever produces the lower rate is used for assessment. The Department of Human Services website has information about the current income and assets test limits.
Australian pension for a person not living in Australia
The rates 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. For claims since 1 July 2014, a person with 35 years Australian working life residence (between age 16 and Age Pension age) can be paid a full age or disability support pension (subject to the means test). With less than 35 years, the rate is worked out on a proportional basis. For example, a person with 20 years Australian working life residence would receive 20/35ths (or 57 per cent) of an Australian pension.
The income and assets tests also apply, so that a person with 35 years Australian working life residence could still receive only a part pension if their income or assets exceed allowable limits.
Australian pension for a person living in Australia
When a pension is granted in Australia under the Agreement (because the person does not meet the minimum residence requirements), the person receives the normal means tested pension (their Chilean pension is ignored for this purpose) less the amount of any Chilean pension they also receive. In other words, the Chilean pension is 'topped up' to the rate of Australian pension the person would get if they were residentially qualified and only their other income, ie not including any Chilean pension, was taken into account.
Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Chilean benefit is treated as income in the normal way.
Exempt income - Pensions of Mercy (Pensiones de Gracia)
People receiving 'Pensions of Mercy’ payments* from Chile have this income exempted in the calculation of their Australian pensions. If you are in receipt of an Australian benefit, and believe your Chilean pension may be a 'Pension of Mercy’ payment, you can check with Centrelink to make sure this income is not being counted against your Australian benefit.
* Chilean Pension of Mercy (Pensiones de Gracia) payments were established by law by the Chilean Government in the early 1990s to compensate and repair the moral suffering of the victims, and relatives of victims, of human rights abuse or political violence that occurred in Chile between 11 September 1973 and 10 March 1990. The payments are those made under Chilean Law 19.123 (mercy payments) and those made under Chilean Law 19.234 and its amendments (periodic mercy payments). Article 17 of the Agreement allows Pensions of Mercy to be exempt from income tests determining rates of payment for all Australian benefits paid under Australian social security law.
Following are examples of how the Agreement will assist people living in Chile.
A person who lived in Australia for 20 years during working life (between age 16 and Age Pension age) is now living in Chile and is already receiving a Chilean old-age pension. This person left Australia before reaching Age Pension age.
- Without the Agreement
Although this person has more than the 10 years Australian residence required to qualify for an Australian Age Pension, they do not qualify for payment because they are not an Australian resident and in Australia to claim.
- With the Agreement
This person is able to claim an Australian benefit without the need to return to Australian to live permanently. The Australian pension rate is proportionalised based on their Australian working life residence, that is, the person will receive 20/35ths of the full rate, subject to the income and assets test.
A woman aged 65 has lived and worked in Australia for 9 years during her working life (between age 16 and Age Pension age) and is now living in Chile. She has completed a period of 728 weeks of insurance in Chilean.
- Without the Agreement
She does not qualify for Australian pension because she is not living in Australia and if she did, she would not have the minimum 10 years of Australian residence required to qualify for Australian Age Pension. Also, she does not qualify for Chilean old-age pension as she has not completed the minimum period of insurance required to qualify for payment.
- With the Agreement
She is able to claim and qualify for an Australian Age Pension in Chile because her 9 years residence plus the periods of insurance in Chile add up to more than 10 years. Her rate of payment would be 9/35ths of the full rate, subject to the income and assets test. She would also qualify for a Chilean pension because she can add her 9 years of Australian working life residence to the 728 weeks of insurance in Chile to meet the minimum period of insurance completed that is required to qualify for payment.
A 65 year old man in Chile has the minimum period of insurance in Chile to qualify for old-age pension. He has lived in Australia for 9 months during his working life.
- Without the Agreement
This person is entitled to Chilean pension only. No Australian pension can be paid because of lack of Australian residence and because he is not living in Australia.
- With the Agreement
This person will continue to receive Chilean pension. However, he is not be entitled to Australian pension because the minimum period of Australian working life residence required for the grant of an Australian Age Pension under the Agreement to a person living outside Australia is 12 months.
A person is aged 65 and has lived in Australia for 6 years. Before moving to Australia he lived in Chile and completed a period of insurance in a Chilean social insurance system for 35 years. He now wishes to claim an Australian Age Pension.
- Without the Agreement
He cannot 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 of insurance completed in Chile so that he meets the minimum 10 years Australian residence required to qualify for an Australian Age Pension.
Also, Centrelink would assist him in claiming any Chilean pension he may be entitled to.
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 more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.