Can you retire overseas and get the pension too?

Q:

I TURN 65 in August. I was born in Australia and have lived here permanently since 1971 having spent six years overseas studying and travelling. I want to live in Thailand and will need to receive the aged pension to do this. I have no assets to speak of apart from furniture. Will it be possible for me to receive the Age Pension while living in Thailand?

Financial planning expert Nicolas d'Emden writes:

The level of Age Pension you receive is dependent on Centrelink’s Asset test and an Income test. The test that will apply is the one that provides you with the lowest level of Age Pension.

Taking into account the assets that you have mentioned, and the assumption that you will no longer be working and therefore will not be receiving any income, I presume you would receive the full Age Pension under either test.

Most Centrelink payments will continue to be paid during an absence from Australia for up to 13 weeks; however the Age Pension will normally continue to be paid for 26 weeks after your departure.

It can continue to be paid to you permanently as long as you remain otherwise qualified for the payment, although there is no certainty of this.

Whether or not you will be able to receive the payment if you live in Thailand depends on a number of individual circumstances of which only Centrelink can notify you of.

If you are entitled, the rate of your payment after the 26 weeks is paid on a proportionate basis.

According to Centrelink, a proportionate rate is calculated using a person's working life residence – the period of time the person was living in Australia between the age of 16 years and age pension age.

A full rate of pension is paid if the person has 300 months (25 years) of working life residence, which, from what you have indicated, you will be entitled to.

You must notify Centrelink before you travel outside Australia so the organization can determine how your future entitlements to the Age Pension will be affected.

You will be required to answer a few simple questions to determine whether the payment will continue and at what rate. You can contact Centrelink International Services on 13 16 73 in this regard.

Where to find out more

The answer this week was provided by Nicolas d'Emden from Shadforth Financial Group Pty Ltd, a member of the Financial Planning Association.

To find a financial planner, call the FPA on 1800 626 393 or visit www.goodadvice.com.au

The expert does not act on behalf of the FPA. The opinions expressed and information provided by the expert are not those of the FPA. The expert is responsible for any financial product advice provided and for satisfying any related regulatory requirements. The FPA exercises no control over, does not endorse and takes no responsibility for any financial product advice provided. The FPA is not responsible in any way for any injury, loss or damage that occurs as a result of an opinion expressed or information provided by the expert or as a result of the use of this website.

The FPA’s 2010 National Conference Your Wavelength will be at the Gold Coast Convention and Exhibition Centre on the Gold Coast, Queensland, November 24-26, 2010.

Nicolas d'Emden can be contacted directly by phone (03) 6323 2323 or visit www.sfg.com.au.