Social Security Agreement between Australia and Denmark - 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 say?
- What does the Agreement do?
- What payments does the Agreement cover?
- What does Australia do under the Agreement?
- What does Denmark do under 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 claim?
- What are the important things to know about the Australian Social Security System?
- How much Australian pension will I get if I am paid under this Agreement?
- How do I find out more?
The Agreement commenced on 1 January 2001.
The Agreement is a formal treaty:
The main purpose of the Agreement is to assist people who move between Australia and Denmark to get a pension from each country so that both Australia and Denmark share the long term social security coverage for that person. The Agreement:
- provides for grant of pension by one country even though a person is living in the other
- allows for the transfer of pensions between countries
- allows people to add together periods spent in both countries to meet minimum residence qualifications for Australian benefits
- offers income test concessions, and
- arranges for administrative cooperation between Australia and Denmark
The social security payments covered by the Agreement are as follows:
- Age Pension
- Disability Support Pension for the severely disabled, and
- Parenting Payment (single) for widowed persons (for claims in Australia only)
- old age pension
- anticipatory pension (disability pension)
Pensions supplement, personal allowance, outside assistance allowance, constant attendance allowance and disability benefit are payable outside Denmark only according to Danish law.
Denmark also pays ATP pensions, which are based on person's contributions rather than on residence. A social security agreement is not required to establish the right to a benefit under the ATP scheme. However, the agreement may assist the person in claiming an ATP pension.
For all inquiries and claim forms contact:
Australian legislation generally requires minimum periods of residence in Australia before a person can qualify for a pension. It also requires a person to be an Australian resident and in Australia to lodge a claim. Under the Agreement with Denmark, Australia will treat someone who is resident in Denmark as a resident of Australia so that the person could lodge a claim for Australian pension in Denmark.
Also, the Agreement may help if a person does not have enough residence to meet Australia's minimum residence rule by treating periods of Danish residence (after 1 April 1957) as if it were Australian residence.
Under the Agreement, Denmark allows for the payment of social pensions to Danish citizens and citizens of Australia who are residents of either country and have a minimum of three years residence in Denmark between the ages of 15 and 67. Periods of residence in Denmark prior to 1 April 1957 are not counted in the calculation of a benefit for Australian citizens who live outside Denmark.
Under the Agreement, Denmark also requires Australian citizens who are not resident in Denmark to have been employed or self-employed in Denmark for at least 12 months as a condition for pension grant.
ATP benefits may be exported anywhere in the world, irrespective of the nationality of the beneficiary.
People living in Australia can lodge claims for Danish and Australian pensions with any Centrelink Customer Service Centre. Centrelink will supply all the necessary claim forms.
People living in Denmark can lodge claims with any Danish municipal office. More information is available from:
Udbetaling Danmark (the Danish pensions authority)
International Pension & Social Sikring
Telephone: (+45) 3395 5000
In Australia's case, payment starts from the first day a person qualifies for a payment after claiming, but cannot be earlier than 1 January 2001. A person may choose to be paid on any day of the week. Claims for Age Pension can be lodged up to 3 months in advance of reaching Age Pension age. If a person lodges their claim after they reach Age Pension age, then payment would generally not be backdated.
Claims for Danish pensions may be lodged up to 8 months in advance of reaching age pension age.
If you get an Australian pension, Services Australia will pay it to you. Payments are usually made into your nominated bank account every 2 weeks if you live in Australia, or every 4 weeks in Danish Krone if you live in Denmark.
Denmark will pay its own pensions and benefits though their Department of Social Security.
Claims and questions about the Agreement are handled by:
- For Australia - Centrelink International Services
- For Denmark - Municipal offices or Den Sociale Sikringsstyrelse
You will need to complete a claim form and provide documents to show the details of your Australian or Danish citizenship, date of birth, marriage etc. The most helpful documents are:
- birth certificates and passports (including expired and foreign passports) and naturalisation/citizenship papers
- marriage certificate(s)
- birth certificates for any dependent children
- death certificates or divorce papers if applicable
- any documents proving periods of residence in Australia
- any documents proving periods of residence in Denmark, and
- any documents which could be useful, for example, bank statements, proof of rent or home ownership, Taxation Notice of Assessment
All claimants for Australian Agreement pensions also need to meet the other conditions (for example, age limits and income and assets tests) required for that pension under Australia's social security laws.
Australian pensions are means tested, that is, an asset test is applied, and then an income test is applied, and the person is paid based on whichever test pays the lower amount. For information about the current income and assets test limits, visit the Department of Human Services website.
The Age Pension age for men and women is 65. The Age Pension age is gradually being increased to 67 beginning in July 2017 – see the Services Australia website - Age Pension for details of Age Pension ages.
Australian pensions for people who are outside Australia are calculated differently to pensions for those who are inside Australia.
Australian pension for a person living in Denmark
Two things affect the rates of Australian pension payable outside Australia:
- length of Australian residence 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 working life 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 35 years, the rate is worked out on a proportional basis. For example, a person with 20 years working life residence would receive 20/35ths (or 57 per cent of the pension rate); a person with 12 years working life residence would receive 12/35ths (or 34 per cent).
The income and assets test also apply. 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 more information about the current income and assets limits, visit the Services Australia website.
When an Australian pension is paid overseas a concession may apply on the proportion of any contributory Danish benefit received which is counted as income for the income test. This also applies to pensions granted without the assistance of the Agreement. Any personal allowance paid under the Social Pensions Act of Denmark is disregarded from the Australian income test.
Following are some examples of how the Agreement assists people living in Denmark.
A 68-year-old man who lived in Australia for 20 years during working live is now living in Denmark and is already receiving a Danish benefit. He left Australia before reaching age pension age.
- Without the Agreement
Although he has more than 10 years required for Australian Age Pension, he cannot claim payment as he is not an Australian resident and in Australia.
- With the Agreement
The Agreement allows this man to claim an Australian Age Pension even though he is a resident of Denmark. The rate of Australian pension he received would be proportionalised; 20/35ths of the means tested rate would be paid. In addition, the Danish municipal office would assist him in claiming an Australian pension.
A 67-year-old man now residing in Denmark has 16 years of residence in Denmark. He has also lived in Australia for 9 months.
- Without the Agreement
He would be entitled to a Danish pension only. No Australian pension could be paid because he is not an Australian resident and in Australia.
- With the Agreement
No change. He would still receive a Danish pension, but would not be entitled to an Australian pension because under the Agreement the minimum period of Australian working life residence is one year (of which at least six months must be continuous).
Australian pension for a person living in Australia
When a person living in Australia is granted a pension under the Agreement (because of lack of qualifying residence), the person receives the normal means-tested pension less the amount of any Danish benefit they also receive. The Danish benefit is 'topped up' to the rate of Australian pension they would get if they did not receive any Danish benefit. If the person qualifies for Australian pension without the Agreement, any Danish benefit is treated as income in the normal way.
Following are some examples of how the Agreement assists people living in Australia.
A man now aged 67 has lived in Australia for 6 years. Before moving to Australia he lived in Denmark for 35 years. He now wishes to claim an Australian Pension.
- Without the Agreement
He cannot get an Australian Age Pension as he has not lived in Australia for more than 10 years.
- With the Agreement
He can add his 6 years as an Australian resident to his 35 years of Danish residence 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 Danish pension he may be entitled to.
A man has lived in Australia for 2 years and is now 67 years old. He has also lived in Denmark for 4 years. He wishes to claim an Australian Age Pension.
He would not qualify for an Australian Age Pension because, even if he does add his periods of residence in Denmark to his periods of Australian residence, he still will not have at least 10 years of Australian residence he needs to qualify for an Age Pension.
For more information on claim procedures and payments:
- Contact Centrelink International Services.
- Visit your local Centrelink Customer Service Centre.
- Services Australia Publications - Australia's International Social Security Agreements Factsheets
For more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.