Social Security Agreement between Australia and The Netherlands - 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?
- How will seconded workers benefit under the Agreement?
- Where and how are claims made?
- When does payment start?
- How are Agreement pensions 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 Australian benefit will I get if I am paid under this Agreement?
- Examples for residents of Australia
- Examples for residents of Netherlands
- How do I find out more?
The Agreement started on 1 April 2003. It replaced the original Agreement that started on 1 April 1992.
The agreement is a treaty, and is written in typical treaty style language.
What does the Agreement do?
Under the Agreement, Australia and the Netherlands will share responsibility for paying benefits to people who may otherwise not be entitled.
In Australia's case, the Agreement will assist people who do not have enough residence in Australia, or could not claim a benefit because they are living abroad.
In the case of the Netherlands, the Agreement allows people receiving Netherland's survivor's or disability pensions to continue to receive those pensions should they move to Australia. It also allows for periods of residence in the Netherlands after reaching the age of 15 and before 1 January 1957 to be counted as periods of insurance in the Netherlands.
In addition, the Agreement allows for income test concessions where a person receives income tested benefits from both Australia and the Netherlands.
The social security payments covered by the Agreement are as follows:
- Age Pension
- Disability Support Pension (DSP) for the severely disabled
- Wife Pension – for a woman who is the wife of an age pensioner or DSP who is severely disabled;
- pensions payable to widowed persons; and
- Double Orphan Pension.
- general old age insurance,
- invalidity insurance for employees and the self-employed;
- general survivor's insurance;
- children's allowances,
- sickness insurance (including employer's liability for payment during sickness).
What are the main features of the Agreement?
Australian legislation requires minimum residence periods in Australia before a person can qualify for Age Pension and Disability Support Pension (this rule changes if the person becomes disabled after they take up permanent residence in Australia). It also requires a person to be an Australia resident and in Australian to claim a benefit.
The Agreement allows people to use Netherlands' periods of insurance to make up the 10 years Australian residence required to qualify for Age Pension or disability support pension to qualify for an Australian benefit.
The Agreement also allows a person who resides in the Netherlands to claim an Australian pension without having to return to Australia.
Note: To do this the person must have resided in Australia for a minimum of 12 months (6 months of which was continuous) during their working life (between age of 16 years and Age Pension age). The Department of Human Services website has information on residence requirements for payments covered by the Agreement.
To use the Agreement to claim a pension from the Netherlands, a person must have a period of insurance or have been covered by the Netherlands social security scheme.
The Agreement contains provisions which mean that contributions do not have to be made into both country's systems for an employee who has been seconded to work temporarily in the other country. The provisions relate to the Superannuation Guarantee legislation for Australia. The Australian Taxation Office (ATO) is responsible for the administration of the coverage provisions. Contact the ATO if you require more information on this aspect of the Agreement.
People living in Australia can lodge claims for the Netherlands and Australian benefits with any Centrelink Customer Service Centre. Centrelink will supply all the necessary claim forms.
People living in the Netherlands can lodge claims for Australian and Netherlands' benefits with the Netherlands' Social Insurance Bank (Sociale Verzekeringsbank – SVB) or with UWV Gak for disability claims.
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 are living overseas, your Australian pension will be paid directly into your bank account every 4 weeks. Payments made to customers in the Netherlands are in Euros.
The Netherlands will pay its own benefits through the Netherlands' Social Insurance Bank (Sociale Verzekeringsbank – SVB) or UWV Gak. Payments are made monthly to people living in Australia.
People who get a pension from both countries will get two separate payments – one from Australia and one from the Netherlands.
Claims and questions relating to the Agreement are handled by:
- for Australia, by Centrelink International Services (telephone 131673);
- Australian pensioners living in the Netherlands are able to contact Centrelink International Services on 0800 0224 364 toll free;
- for the Netherlands, by contacting the fund that pays your Netherlands benefit.
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 the Netherlands, you will still have to provide proof of identity and proof of previous Australian residence to the authorities in the Netherlands.
All claimants for Australian Agreement pensions need to meet the other conditions (eg age limits, income or assets tests) required for that benefit under Australia's social security laws.
Australian benefits 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. For information about the current income and assets test limits, visit the Department of Human Services site.
The Age Pension age for men and women is 65. Pension age will increase to 65.5 years in July 2017, and will increase by a futher six months every two years until it reaches 67 in July 2023 – see the Department of Human Services webpage - 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 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 Netherlands' benefit they also receive.
The Netherlands' benefit is 'topped up' to the rate of Australian pension they would get if they were only receiving an Australian benefit.
Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Netherlands' 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 working life residence; 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 the person's Australian working life residence. For claims since 1 July 2014, a person with 35 years Australian working life residence 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 Australian working life residence would receive 20/35ths (or 57%) of the basic means-tested pension rate; a person with 12 years Australian working life residence would receive 12/35ths (or 34%).
The income and assets test also apply, so that a person with 35 years of Australian working life residence 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 Netherlands' pension received which is counted as income for the income test. This can also apply to pensions granted without the assistance of the Agreement.
Also, when any Australian pension is paid to a person in the Netherlands, any payment received as a supplement in respect of a partner (AOW toeslag) or payment under the National Assistance Act (Algemene Bijstandswet-ABW), or another income tested payment eg ANW, are not counted as income for Australian pension.
Mr de Bruin is 65 and has lived in Australia for 8 years. Before moving to Australia he already had 20 years of insurance in the Netherlands.
- Without the Agreement
Mr de Bruin cannot get an Australian Age Pension because he has not lived in Australia for more than 10 years.
- With the Agreement
Mr de Bruin can add his 8 years as an Australian resident to his 20 years of insurance in the Netherlands 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 Netherlands' pension he may be entitled to.
Following are some examples of how the Agreement assists people living in the Netherlands.
A person who lived for 20 years in Australia during working life is now living in the Netherlands and is already receiving a Netherlands' benefit. This person left Australia before reaching Age Pension age and therefore would not get an Australian benefit without the Agreement.
- Without an Agreement
Although this person has more than the 10 years required for an Australian Age Pension, a proper claim cannot be made as the person is not an Australian resident and in Australia.
- With the Agreement
Australian Age Pension could be claimed and paid in the Netherlands. The Australian benefit rate would be proportionalised; 20/35ths of the means-tested rate would be paid.
A woman aged 62 has lived in Australia for 8 years during working life (between age 16 years and Age Pension age). She has 15 years of contributions in the Netherlands. She is now living in the Netherlands.
- Without an Agreement
She would not be able to claim an Australian Age Pension but she would be eligible to claim a Netherlands' benefit.
- With the Agreement
She would be able to claim an Australian Age Pension in the Netherlands because her 8 years' residence plus total periods of Netherlands' contributions add up to more than 10 years. Her rate of payment would be 8/35ths of the full rate, subject to the means test. She would still receive a Netherlands' benefit. If she was receiving a payment under the National Assistance Act, there might be a reduction in that when Australian benefit is granted.
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.