Social Security Agreement between Australia and Hungary - 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 was the Agreement signed?
- When did the Agreement commence?
- What benefits are covered by the Agreement?
- What does the Agreement do?
- What does Australia do under the Agreement?
- What does Hungary do under the Agreement?
- What are the most important things to know about Australia’s social security system?
- Do I need to claim a pension from Hungary?
- Where and how can people lodge claims?
- When does payment start?
- How are Agreement pensions and benefits paid?
- What documents do I need to make a claim?
- How much pension will I get if I am paid under the Agreement?
- How do I find out more?
When was the Agreement signed?
The Agreement was signed on 7 June 2011.
When did the Agreement start?
The Agreement started on 1 October 2012.
What benefits are covered by the Agreement?
For Australia, the Agreement covers Age Pension. For Hungary, the Agreement covers age, and survivors’ benefits.
What does the Agreement do?
Under the Agreement, Australia and Hungary will share responsibility for pensions to people who would not otherwise be entitled because they do not have enough residence in Australia or sufficient creditable periods in Hungary. 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 for seconded workers. Under the Agreement, seconded employees and/or their employer will generally only be subject to the legislation of their home country and would be exempt from making contributions for the same work under the law of the other country.
What does Australia do under the Agreement?
To qualify for an Australian Age Pension people usually need to be an Australian resident and in Australia on the day they lodge a claim, and they usually must have at least 10 years Australian residence.
The Agreement modifies these rules so that:
- Australia will treat someone who resides in Hungary as being a resident of Australia, so that the person can lodge a claim for an Australian Age Pension;
- Australia will add the person's insurance periods accumulated in Hungary to his or her Australian residence to help the person meet the minimum residence requirement to get an Australian Age Pension;
- Australia guarantees to pay Age Pension indefinitely into Hungary, provided the person remains otherwise qualified to receive it.
What does Hungary do under the Agreement?
Normally a person must have a minimum of 15 years of contributions to qualify for a pension from Hungary.
Under the Agreement:
- applicants in either country will be able to add periods of Australian residence to insurance periods accumulated in Hungary in order to satisfy this requirement;
- Hungary guarantees to pay its pensions to Australia residents indefinitely, provided the person remains otherwise qualified to receive it.
What are the most important things to know about Australia’s social security system?
All claimants for an Australian Age Pension need to meet minimum age and residence criteria under Australia’s social security laws. Australian pensions are also means tested – that is, an income test and an assets test is applied, and whichever results in the lower rate of pension is used for assessment purposes. The Department of Human Services has information about the current income and assets limits.
Do I need to claim a pension from Hungary?
If you are receiving an Australian pension and may also be entitled to a foreign pension, Australian social security law requires that you take reasonable action to apply for it. This is because the Australian pension system is not based on contributions but is funded from general taxation revenue and the Government believes that all pensioners should maximise their private income before calling on taxpayer funded support.
Where and how can people lodge claims?
After the Agreement enters into force, people will be able to lodge a claim for an Australian or Hungarian pension in either country.
People living in Australia can lodge claims for Australian and Hungarian pensions with any Centrelink Customer Service Centre.
People living in Hungary will be able to lodge claims for Hungarian and Australian pensions at any Hungarian social insurance office.
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.
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 Hungary, the Department of Human Services will pay it into your nominated Hungarian bank account every 4 weeks. Payments to customers in Hungary are in Hungarian Forint.
What documents do I need to make a claim?
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.
If you claim an Australian Age Pension while living in Hungary, you will still need to prove your identity along with proof of previous Australian residence to the Hungarian authorities.
How much pension will I get if I am paid under the Agreement?
Australian pension for a person not living in Australia
The amount of Australian pension payable to someone living outside Australia is affected by:
- the duration of their Australian Working Life Residence; and
- the person’s (and their partner’s) income and assets.
For claims since 1 July 2014, a full pension, subject to the income and assets tests, is payable to a person with 35 years 'Australian Working Life Residence' (this is the period of Australian residence between the age of 16 and Age Pension age). For example, a person who has lived in Australia from age 30 to age 50 has 20 years of Australian Working Life Residence and may, after reaching pension age, be paid 20/35ths (57%) of a means-tested Australian Age Pension in Hungary. No pension is paid overseas if a person has less than 12 months of Australian Working Life Residence.
Australian pension for a person living in Australia
Generally to qualify for Australian Age Pension a claimant must have lived in Australia for at least 10 years. People who have lived in Australia for less than 10 years can include their Hungarian creditable periods to help meet this requirement. During this time (until a person has ten years residence in Australia) they will be paid the normal income and asset tested pension rate less the amount of any Hungarian pension they receive.
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 more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.