Social Security Agreement between Australia and Malta - 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?
- Why do we have a Social Security Agreement?
- What does Australia do under the Agreement?
- What does Malta do under the Agreement?
- What are the most important things to know about the Australian social security system?
- How are pensions calculated under the Agreement?
- Where and how can people lodge claims for social security pensions?
- When does payment start?
- How are pensions and benefits paid?
- How do I find out more?
The current Agreement started on 1 July 2005. This replaced the original Agreement which started on 1 July 1991.
Under the Agreement, Australia and Malta 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 Malta. It also helps people who could not otherwise claim because they are living abroad.
The social security payments covered by the Agreement are as follows:
- Age Pension
- Disability Support Pension for the severely disabled
- pensions payable to widows:
- Bereavement Allowance
- Widow B Pension (no new grants since 20 March 1997)
- Parenting Payment (single) (previously sole parent pension)
Contributory pensions in respect of:
Malta also pays non-contributory pensions and assistance under the Agreement but these are usually only paid in Malta.
Unlike the contributory systems of many other countries, Australia’s social security system is non-contributory and based on the concepts of residence and need. There is no requirement for a person to have worked, or paid taxes or contributions to receive benefits.
The Social Security Agreement between Australia and Malta coordinates the two countries' social security schemes to provide better retirement income coverage for people who have moved between the two countries.
People who have lived in more than one country often find that, when they claim a pension, they do not have enough residence or contributions under a social security scheme to qualify for payment or have insufficient support.
To help overcome this problem, a network of social security agreements has been set up within the international community.
One of the key elements in these agreements is that the partner countries broadly share the responsibility for social security coverage and related costs. If a person has lived and worked in more than one country, then it is fair that those countries share the responsibility for supporting that person when he/she claims a pension.
Agreements help many people to receive a part pension from one or both countries, which they would not otherwise get. It is an important principle that Agreements do not take away existing entitlements.
To qualify for an Australian pension, people normally have to be Australian residents and in Australia on the day a claim for pension is lodged, and they usually must also have a minimum period of residence in Australia. For example, a person needs to have at least 10 years Australian residence to claim an Australian Age Pension.
The Agreement modifies these rules so that:
- Australia will treat someone who is resident in Malta (or a third country with which Australia has implemented an agreement on social security that includes provision for co-operation in the lodgement and determination of claims for benefits) as being a resident of Australia and present in Australia, so that the person can lodge a claim for Australian pension;
- Australia will add the person's periods of insurance in Malta to his or her Australian residence so that the person can meet the minimum residence qualifications to get an Australian Age Pension;
- Australia guarantees to pay pensions covered in the Agreement indefinitely in Malta, as long as the person otherwise remains entitled.
Maltese legislation requires minimum insurance periods to qualify for benefits. Under the Agreement, periods of working life residence in Australia are treated as insurance periods in Malta to meet these minimum insurance period requirements.
All claimants for Australian pensions need to meet all qualifications (e.g. age and residence) required for that pension under Australia's social security laws. Australian pensions are also means tested, that is, income and assets tests are 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 tests limits.
People who live in Australia, who are granted an Australian pension under the Agreement (because of lack of qualifying residence), receive the normal means-tested pension less the amount of any Maltese pension they also receive - i.e. the Maltese pension is 'topped-up' to the rate of Australian pension they would receive if they had no Maltese pension. Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Maltese pension is treated as income in the normal way.
Australian pensions in Malta are based on the person’s period of ‘Australian Working Life Residence’ [this is the period between age 16 and Age Pension age]. For claims made since 1 July 2014, a full pension, subject to the means-test, is payable to a person with 35 years ‘Australian Working Life Residence’. For example, under the Agreement, a person who has lived in Australia from age 30 to age 50 (i.e. 20 years) may, at pension age, be paid 20/35ths of a means-tested Australian Age Pension in Malta. A minimum of 12 months of Australian Working Life Residence is normally required.
Under the Agreement, when a pension is paid outside Australia a concession may apply on the proportion of any contributory Maltese pension received which is counted as income for the income test. This also applies to pensions granted without the assistance of the Agreement.
Non-contributory Maltese pensions (generally only paid in Malta) are disregarded from the normal Australian income test.
This Agreement contains provisions that maintain the rate of Australian pension paid, under the Agreement, to people when they visit or depart Australia temporarily for up to 26 weeks. The rate will not change immediately a person visits or departs Australia, but instead will remain consistent for the first 26 weeks of any temporary visit or departure.
The amount of Maltese pension payable is determined under the legislation of Malta, and is generally based on the periods of insurance completed in the Maltese social security scheme.
People living in Australia can lodge claims for Australian and Maltese pension with any Centrelink Customer Service Centre.
People living in Malta can lodge claims with any office of the Maltese Department of Social Security.
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. Age Pension claims can be lodged up to three months in advance of qualification.
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 Malta, the Department of Human Services will pay it into your nominated Maltese bank account every 4 weeks. Payments to customers in Malta are in Euros.
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.