Social Security Agreement between Australia and Italy - 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 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?
- Examples for Residents of Australia
- Examples for Residents of Italy
- How do I find out more?
The original Agreement started on 1 September 1988. The revised Agreement came into force on 1 October 2000.
The Agreement is a formal treaty.
The main purpose of the Agreement is to assist people who move between Australia and Italy to get a pension from each country so that both Australia and Italy share the long-term social security coverage for that person.
- 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 of working life residence in Australia and periods of contributions in Italy to meet qualifying periods to obtain a pension from one or both countries;
- offers income test concessions; and
- arranges for administrative cooperation between Australia and Italy.
The social security payments covered by the Agreement are as follows:
- Age Pension;
- Disability Support Pension (previously invalid pension) for severely disabled persons;
- Wife Pension (no new grants since 30 June 1995);
- pensions payable to widows
- Widow B Pension (no new grants since 20 March 1997);
- Bereavement Allowance (previously widowed persons allowance);
- Parenting Payment (single) (previously sole parent pension);
- Spouse Carer Payment (formerly carer pension);
- Double Orphan Pension; and
- additional child amount (previously additional pension and mothers' and guardians' allowances for children).
- old age pension;
- seniority pension;
- anticipated pension;
- invalidity allowance;
- inability pension;
- privileged invalidity allowance;
- privileged inability pension;
- invalidity attendance allowance;
- survivors' pensions;
- family allowance for dependants of pensioners; and
- unemployment allowance.
What does Australia do under the Agreement?
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, Italian periods of credited contributions are treated by Australia as periods of residence in Australia. They help the person to meet any minimum qualifying periods, but do not affect the amount of payment. The Agreement also permits a person who resides in Italy to claim a pension from Australia even though he or she may no longer be an Australian resident.
What does Italy do under the Agreement?
Italian legislation requires minimum periods of credited contributions to qualify for benefits. Under the Agreement, periods of working life residence in Australia are treated as periods of credited contributions in Italy.
These deemed periods do not affect the amount of pension, which is based only on the periods of credited contributions in Italy.
Note: Italy's social security system includes various pension funds. The main fund is known by the acronym INPS - National Social Security Institute. This fund pays pensions for most of the other Italian funds as well. The Agreement includes INPS and three other funds:
- ENPALS - a fund for employees in the entertainment industry;
- INPGI - a fund for employees in the print media; and
- INPDAI - a fund for managers in industry.
People living in Australia can lodge claims for Italian and Australian pensions with any Centrelink Customer Service Centre. Centrelink will supply all the necessary claim forms.
People living in Italy can lodge claims with any office of the National Social Security Institute (INPS).
In Australia's case, this is from the first day a person qualifies for payment after lodgement of a claim. A person may choose to be paid on any day of the week. Claims for Age Pension may 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.
If you get an Australian pension, the Department of Human Services 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 by Euro if you live in Italy.
People who get a pension from both countries, will get two separate payments - one from Australia and one from Italy.
Claims and questions about the Agreement are handled by:
- Centrelink International Services or any Centrelink Customer Service Centre
- INPS - National Social Security Institute for Italy. (This fund pays pensions for most of the other Italian funds as well).
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;
- any documents proving periods of contribution and/or residence in Italy;
- any other 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 need to meet the other conditions (eg age limits, income and assets tests) required for that pension under Australia's social security laws.
Australian pensions are means-tested. 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 commencing from 1 July 2017 – see the Department of Human Services - Age Pension for details of Age Pension ages.
Australian working life residence is the period of Australian residence between age 16 and Age Pension age.
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 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 Italian benefit they also receive.
The Italian benefit is 'topped up' to the rate of Australian pension they would get if they did not receive any Italian benefit.
Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Italian benefit is treated as income in the normal way.
Australian pension for a person not living in Australia
The rate of Australian pension payable outside Australia is affected by two things:
- 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 person's working life residence in Australia. For claims made since 1 July 2014, a person with 35 years residence during 'working life' (between age 16 and Age Pension age) can be paid a full basic means-tested pension. A person with less than 35 years Australian working life residence, has his or her rate worked out on a proportional basis.
For example, a person with 20 years working life residence would receive 20/35ths (or 57%) of the basic means-tested pension rate; a person with 12 years working life residence would receive 12/35ths (or 34%).
The income and assets test 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 allowable limits. For more information about the current income and assets limits, visit the Department of Human Services website.
Under the Agreement, when a pension is paid outside Australia a concession may apply on the proportion of any contributory Italian pension received which is counted as income for the income test. This also applies to pensions granted without the assistance of the Agreement.
Italian integration (integrazione al minimo), Italian social supplement and family benefit for dependents of pensioners are disregarded from the Australian income test.
Following are some examples of how the Agreement assists people living in Australia:
Mr Fuso is aged 65 and has lived in Australia for 6 years. Before moving to Australia he lived in Italy and paid contributions to the Italian 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 as he has not lived in Australia for more than 10 years.
- With the Agreement
Mr Fuso can add his 6 years as an Australian resident to his 35 years of contributions in Italy 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 Italian pension he may be entitled to.
Mr Timoni has lived in Australia for 2 years and is now 65 years old. He has also lived in Italy for 4 years and contributed to the social insurance system while there. He wishes to claim an Australian Age Pension.
Mr Timoni would not qualify for an Australian age pension because, even if he does add his periods of contributions in Italy to his period of Australian residency, he still will not have at least 10 years of Australian residence he needs to qualify for an age pension.
Following are some examples of how the Agreement assists people living in Italy:
Mr Cardona is aged 65 and has lived in Australia for 20 years during his working life. He is now living in Italy and is already receiving an Italian 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 would not qualify for payment as he is not an Australian resident and in Australia.
- With the Agreement
The Agreement's lodgement provisions allow Mr Cardona to claim an Australian pension even though he is a resident of Italy.
His rate of Australian pension would be proportionalised; 20/35ths of the basic means-tested rate would be paid.
The INPS would assist him in claiming an Australian pension.
Mr Bonafini is aged 65 living in Italy. He has 16 years of contributions to the Italian social insurance system. He has also lived in Australia for 9 months.
- Without the Agreement
Mr Bonafini would be entitled to an Italian pension only. No Australian pension could be paid because he is not an Australian resident and in Australia.
- With the Agreement
No change. Mr Bonafini would still receive an Italian 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).
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.