Portability requirements (taking your payment overseas)

Overview

Introduction to Portability

The term 'portability' refers to the continuation of Australian income support payments during a recipient's overseas absence. Portability policy acknowledges that travel is an integral part of modern living. This is particularly true in ethnically diverse societies such as Australia, where almost a quarter of the population is overseas born.

There is a fundamental difference between overseas insurance-based contributory systems and the Australian social security system. Australia's income support system is residence based and is funded from general taxation revenue. The rate of benefits paid in Australia depends on need (assessed through income and assets tests) rather than the length or amount of an individual’s contribution.

To be eligible for income support, customers must normally be Australian residents and in Australia at the time of the claim. For many payments, such as Age Pension and Disability Support Pension (DSP), claimants must also satisfy payment-specific qualifying periods of Australian residence.

Portability of Australian social security payments is regulated by the Social Security Act 1991 (the Act), which sets out which payments are portable, for how long, at what rate and under what conditions. Portability of Family Tax Benefit is regulated by the A New Tax System (Family Assistance) Act 1999.

Chapter 7 of the Social Security Guide provides more detailed information on Australia’s portability rules.

Apart from the portability rules under domestic law, Australia has a number of international social security agreements that regulate reciprocal portability of benefits between Australia and an agreement country. The provisions in the agreements override the portability rules under domestic law. The portability rules under the international social security agreements are country specific and can be found in the Social Security (International Agreements) Act 1999.

Chapter 10 of the Social Security Guide provides more detailed information on Australia’s international social security agreements.

Current portability rules by payment type

The Department’s Social Security Guide sets out the general portability rules and current portability provisions for individual social security payments and benefits.  This information is updated regularly to reflect portability policy changes.  The Portability Table can be found in the Social Security Guide at Topic 7.1.2.20.

Portability and residence

The availability of short-term portability (excluding DSP, Widow B and Wife pensions) depends on whether the customer continues to satisfy the residence criteria. In deciding whether a person travelling overseas for a short time continues to reside in Australia, regard is given to the nature of the person's accommodation in Australia, family relationships, employment, business, financial ties, assets and the frequency of or duration of travel outside Australia. Customers who return to Australia just to renew their portability period would not satisfy the 'residing in Australia' criterion and would not qualify for payment.

Further information on the residence requirements can be found in the Social Security Guide at Chapter 3.1.1.10 Residence Requirements.

Portability of payments for former residence

The fundamental tenets of the Australian social security system are residence and need. Because residence is a fundamental qualification criterion for Australian social security payments, former residents who return to Australia and subsequently claim Australian social security payments with indefinite portability, are required to stay in Australia for at least two years before their payment becomes portable. The policy rationale for this requirement is that indefinite portability is only available to Australian residents. The former resident rule prevents people who lose their connections with Australia to return to Australia just to obtain a pension and return overseas.

Further information on the former residence requirements is in the Social Security Guide at Chapter 7.1.4 Requirements for former residents of Australia receiving a portable pension.

Evolution of portability policy

Introduction of general portability in the 1970s

In 1973, general indefinite portability was introduced for many Australian pensions. Portability enables certain payments to continue to be paid when a person travels overseas. Indefinite portability was extended to most pension categories and did not impose additional residence conditions for payments to be made overseas. Generally, if a pension was payable in Australia, it was payable overseas. This approach was supported by the special need provisions. Former residents with a substantial connection to Australia, in special need of financial assistance, could access entitlements if they had left Australia without a portable pension before indefinite portability was introduced on 8 May 1973.

Changes to portability in the 1980s

Australia’s portability policy in the 1980s continued to depend on a person’s residence and need.  Policy initiatives curtailed the payment of pensions overseas where the person had very little residence in Australia.

Key policy changes made to Australia’s portability arrangements in the 1980s included the following:

In 1986, as part of the negotiation of international social security agreements with several overseas countries, policies were introduced to pay a proportion of a person’s pension if they moved overseas.  This policy emphasised the principle of shared responsibility and provided a mechanism to rationalise the extent of Australia's responsibility to provide income support to non-residents.

Proportional portability also provided for some compatibility to the minimal contributory period applied by the social security systems of other countries. In order for the customer to be paid, a minimal contributory period was required. In the Australian social security system, once a person satisfies the qualifying residence rules, the pension is paid overseas, but the rate of pension may be adjusted to reflect the person’s period of working life residence in Australia (ie: between 16 years of age and pension age).

On 8 May 1985, in line with its intention to create a portability system compatible with the contributory systems of other countries and the network of international social security agreements, the Government modified general portability conditions with the introduction of proportional portability based on working life residence for pensions granted after 1 July 1986, with savings provisions.

From 1 October 1987, indefinite portability of Carer Pension was stopped.

From 1 July 1988, the portability of Sole Parent Pension was limited to the first twelve months of an absence except for special widows.

From 1 February 1989, departure certificates were introduced.

Changes to portability in the 1990s

In 1991, the portability of Wife and Widow B Pensions was limited to the first twelve months of an absence unless recipients were entitled persons.

From 12 November 1991, a twelve-month limitation on the portability of certain DSP payments was introduced.

In 1992, short-term portability of Carer Pension was re-introduced for carers travelling overseas together with the person being cared for and for carers in a respite period.

From 1 January 1993, additional family payments ceased to be portable. This is the date from which additional payments for children of pensioners were integrated into the family payments system. Portability of those payments was barred, unless pensioners were already overseas or able to export the payments under the provisions of an international social security agreement.

From 1 January 1995, the penalty clauses in the departure certificate provisions were moderated.

September 2000 - simplification of the portability rules

Overview

In the 1999-2000 Budget, the Government proposed simplification of all portability rules contained in social security law. The simplified portability rules were introduced by the Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Act 2000 with the date of effect 20 September 2000. The rules addressed the problems of complexity and provided a comprehensive and consistent approach to portability across all payment types.

As part of the changes, portability was not considered a qualification criterion for Australian social security payments. It became a payability issue. From 20 September 2000, all social security payments could be paid while a customer was overseas subject to continuing qualification.

The simplified approach to portability was guided by the principles of fairness, equity and the need for administrative simplicity. Instead of nine different portability periods, the simplified rules generally prescribed only two portability periods for social security payments:

  • indefinite portability for permanent absences; and

  • short-term, 26 week portability for temporary absences.

Indefinite portability in certain circumstances

Where a pension was needed for a major contingency of life, such as age or severe disability, the recipient was offered the right to choose their permanent place of residence and could continue to be paid overseas indefinitely. However, portability of these pensions also reflected international practice in that the overseas pension rate for this group depended on the length of contributions/residence in the paying country.

26 week portability for temporary absences (Short-term)

For payments that required a customer to be an Australian resident to maintain qualification for the payment, portability was allowed for temporary absences of up to 26 weeks. This change complied with the residence principles of the Australian social security system and, at the same time made the standardised portability system possible.

The introduction of a standard 26 week portability period was the most important feature of the September 2000 changes. Selection of the length of the standard short-term portability period was based on research of the travelling patterns of social security customers. More than 85 per cent of all social security recipients who travelled overseas went for less than 26 weeks. Within the group that travelled, around 90 per cent travelled for up to 13 weeks. After the 13-week period the numbers of travellers rapidly declined. Also, in a survey commissioned by FaCS in 1999, more than 80 per cent of respondents from a representative sample of the Australian population identified periods shorter than 26 weeks as the intended period of travel. A majority of respondents selected a portability period of up to 13 weeks.

Extension of the portability period

Where the customer could not return to Australia before the end of the portability period, the new portability rules also introduced the possibility of an extension of the portability period under strictly defined conditions. This discretionary power could only be applied if the event preventing the return occurred while the person was overseas and was not foreseeable before departure. The typical events are described in social security legislation and the Secretary's discretionary power was delegated to Centrelink.

Saved cases

Customers already overseas at the time of introduction of new portability rules were protected against any possible detrimental effects of the changes. Customers in receipt of pensions, such as Age, DSP, Wife and Widow B, were subject to old rules until they returned to Australia for longer than 26 weeks. Other customers overseas were subject to old rules until they returned to Australia.

Proportionalisation of pension payments

After the 20 September 2000 changes, the Australian overseas rate of Age Pension and DSP became proportional after 26 weeks of absence from Australia. After that period the Australian overseas rate reflected the years of residence that a recipient has accumulated in Australia during their working life. Recipients moving overseas for more than 26 weeks could only be paid their full rate of Age Pension if they had 25 years (increased to 35 years from 1 July 2014) or more of Australian Working Life Residence (the period between the age of 16 and Age Pension age). Recipients with less than 25 years were paid a proportional rate based on the duration of their working life residence in Australia. For example, if a person had 16 years of working life residence, after 26 weeks of absence they would have received 16/25ths of their rate paid in Australia.

Proportionality does not apply to severely disabled DSP recipients if the disabling event occurs in Australia when the person was an Australian resident.

In the 2015-16 Budget, a measure was proposed to reduce the period that Age Pension, and a small number of other payments with indefinite portability, could be paid outside Australia at the normal (means‑tested) rate from 26 weeks to six weeks. This measure is no longer Government policy and was reversed in the 2017-18 Budget.

July 2004 - Reduction in portability period from 26 weeks to 13 weeks

As part of the 2003-2004 Budget, the Government reduced the allowable period of temporary overseas absence for portable pensions and allowances from 26 to 13 weeks. These rules were introduced by the Family and Community Services and Veterans' Affairs Legislation Amendment (2003 Budget and Other Measures) Act 2003 and were effective from 1 July 2004. The measure encouraged people of workforce age and on income support payments to remain in Australia and be available to contribute through employment or social participation.

This change did not apply to Age pensioners and 'entitled' Widow B and Wife pensioners. 'Entitled' Widow B and Wife pensioners included women who had been Australian residents for more than 10 years or whose legally married partner died.

People paid Age Pension or DSP under an international social security agreement were not affected as long as they remained in the agreement country. They were able to travel outside that country for 13 weeks without being affected, the same allowable period that applied to someone who was temporarily absent from Australia. Customers who were overseas at 1 July 2004 were not affected unless they returned to Australia.

This change applied to DSP recipients who were severely disabled or blind (who at the time of the changes had unlimited portability). These people, from 1 July 2004, had their allowable overseas absence limited to 13 weeks. Carer Payment and Carer Allowance customers were also affected by these changes.

Certain DSP recipients granted indefinite portability

In special circumstances, defined in the legislation, recipients of DSP could be granted payment indefinitely if they were terminally ill and planning to return to their country of origin to be with family for care and support.

DSP recipients who were residing overseas and were currently paid portable pensions could continue to receive payment if they came to Australia to visit family and returned overseas without becoming Australian residents again.

Other short-term portable payments and specific requirements

While all short-term portable payments were made portable for up to 13 weeks, qualification for some payments also required that a person satisfied criteria such as looking after a dependent child, providing care to a person with a disability, studying or actively seeking employment. It may not have been possible to satisfy these criteria while customers were overseas. For this reason, in order for payments to be portable, recipients had to be exempted from these qualifying requirements for the period of overseas absence. This exemption was usually for a defined period of time and often under specific conditions. For example, recipients of Newstart Allowance may be exempted from the activity test if they are going overseas to seek medical treatment of a kind not available in Australia, to attend to an acute family crisis, for a humanitarian purpose, or Army Reserve training camp. The exemption from the activity test and, therefore, portability of the payment is only for the period needed to undergo the treatment or attend to other responsibilities.

The standard short-term portability period of 13 weeks meant that, if a customer qualified for the payment, it could be paid for up to 13 weeks while the customer was overseas. After that period, the payment stopped due to the portability limits. However, if a recipient of a payment was required to satisfy specific qualification criteria that could only be satisfied in Australia and had been exempted from these for a specified period, the person could go overseas for the duration of the exemption period provided it was no longer than 13 weeks. However, if the person remained overseas longer than the period of exemption the payment stopped even though the portability period of 13 weeks may not have expired. This was because the recipient ceased to be qualified for the payment.

For some payments such as Youth Allowance and Austudy, the activity test could be satisfied while overseas, for example, recipients going overseas as a part of an approved Australian educational course. In these circumstances portability was allowed for the duration of the overseas course. Also, recipients of payments such as Newstart Allowance, Youth Allowance, Austudy, Parenting Payment and Mature Age Allowance who were overseas for the purpose of undertaking Reserve Service could be paid for the duration of the Reserve Service activities overseas.

July 2011 - Residence requirement for DSP recipients travelling overseas

The changes introduced on 1 January 2011 required a person receiving DSP to be a permanent resident in Australia to continue to receive their payment.  This measure brought DSP into line with all other workforce age payments which have an ongoing residence requirement.  The residence status of DSP recipients is reviewed to ensure that only customers living permanently in Australia will continue to be eligible for DSP.

To determine whether or not a person is residing in Australia, regard is given to the following factors:

  1. the nature of the accommodation used by the person in Australia;
  2. the nature and extent of the family relationships the person has in Australia;
  3. the nature and extent of the person's employment, business or financial ties with Australia;
  4. the nature and extent of the person's assets located in Australia;
  5. the frequency and duration of the person's travel outside Australia; and
  6. any other matter relevant to determining whether the person intends to remain permanently in Australia.

The change did not affect DSP recipients who needed to leave Australia temporarily. The 13 week temporary absence remained to allow DSP recipients to legitimately travel overseas for short periods.

The change did not affect any DSP recipients who had portability under an international social security agreement, was grandfathered from changes introduced in 2001 or 2004, or was entitled to extended portability because they were severely disabled and terminally ill and overseas to be cared for by a family member.

July 2012 - Indefinite portability for some DSP recipients

Since 1 July 2012 DSP recipients with a severe and permanent disability and no future work capacity, who travel overseas permanently or for periods longer than 13 weeks, are able to apply for indefinite portability of their pension.  This rule recognises that highly vulnerable people with a severe and permanent disability and no future work capacity may need to travel to be with their family for care and support.

The majority of DSP recipients who may have some capacity to work were not affected by this measure. They continued to be subject to the then 13 week portability rule.

DSP recipients who wish to claim indefinite portability are required to be assessed against the new criteria prior to their departure with regard to the severity and permanency of their disability.  Additionally, they are assessed for their capacity for work through the Job Capacity Assessment process.

January 2013 - Reduction of portability from 13 weeks to six weeks

On 1 January 2013 the time that most income support recipients could receive a payment while outside Australia reduced from 13 weeks to six weeks.

July 2014 - AWLR requirements increase to 35 years

Since 1 July 2014 the period of Australian Working Life Residence (AWLR) required to receive a full means-tested pension outside Australia after 26 weeks increased from 25 years to 35 years. A person’s working life residence is the period of time they have lived in Australia between the age of 16 and Age Pension age.

To continue receiving the full rate of Australian pension, recipients will generally need to have spent 35 years of their working life in Australia.  People do not need to have worked or paid tax during this period.

If a person has less than 35 years AWLR their rate of payment will be adjusted according to their working life residence.  For example, if they have 27 years AWLR, they will receive 27/35ths (77 percent) of the maximum means-tested rate of payment.

Recipients on the following payments may be affected by the AWLR change:

People who were outside Australia immediately before 1 July 2014 can continue to receive their payment under the rules which applied when they left, unless they return and stay in Australia for 26 weeks or more.

Payment arrangements under some international agreements may differ.

More information about rates of payment outside Australia can be found at the Department of Human Services website.

January 2015 - Change to DSP portability rules (four weeks in a 12‑month period)

Since 1 January 2015, the period a person can normally be paid and continue to qualify for the DSP outside Australia reduced to four weeks in a rolling 12-month period.

DSP recipients, who remain outside Australia, on a temporary absence for more than four weeks in a rolling 12 month period, will have their payment stopped.

DSP recipients with a severe and permanent disability and no future work capacity will continue to be able to apply for unlimited portability of their pension.

More information is provided at Changes to Disability Support Pension portability.

January 2015 - Portability of student payments reduced to limited circumstances

Since 1 January 2015, general portability for Youth Allowance (student), Austudy and Abstudy has been removed.  Students will only remain eligible for payment overseas:

  • where the recipient is undertaking approved full-time overseas study as part of their Australian course or an Australian apprenticeship, or
  • for approved medical treatment (not available in Australia), or
  • to attend an acute family crisis.

Recipients overseas immediately before 1 January 2015 are subject to the rules under which they departed until they return to Australia for more than six weeks.

July 2016 - Family Tax Benefit (FTB) Part A portability reduced from 56 weeks to six weeks

Since 1 July 2016, the period a person can normally be paid and continue to receive Family Tax Benefit (FTB) Part A outside Australia will be  limited to six weeks. This is a reduction from 56 weeks. FTB recipients will still be able to take multiple overseas trips and retain FTB but each trip must be less than six weeks duration.

This change aligns the portability rules for FTB Part A with those of FTB Part B and most income support payments.

More information is provided at Family Tax Benefit Part A – Reduced portability.

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