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Income from Foreign Pensions
Last amended: 25 November 2010
Income from foreign pensions
The current gross rate of an assessable foreign pension is treated as income for DVA purposes whether the payments are made:
- from overseas, or
- through an Australian agent.
No amount is deducted for any bank charges incurred.
Exemption of foreign pensions from the income test
The circumstances in which foreign pensions may be excluded from the income test are limited to:
- where the pension is a payment in respect of incapacity or death resulting from employment in connection with a war or war-like operations in which the Crown has been engaged; VEA ?
- where the pension is a payment in respect of reimbursement of incurred costs (e.g. medical-related expenses) and as a result is not assessable income as it is not available for the person's own use or benefit; or
- where the pension payment has been specifically declared by legislative instrument to be an exempt payment.
Note: A person assessed as receiving an overseas payment similar in character to Australian war widow/widower's pension or disability pension may have their DVA war widows/widowers or disability pension reduced on a dollar for dollar basis by the overseas payment.VEA ?
A person who receives an overseas payment similar in character to Australian war widows/widowers pension is not entitled to receive partner service pension.VEA ?
Indexation of British state pension
Most British state pensions (formerly known as British social security pensions) are not indexed when received by Australian residents. Those that are, such as Industrial Injuries Disablement Benefit, Jersey and Guernsey pensions, are indexed annually at different times. United Kingdom state pension is only indexed for recipients living in:More ?
- the European Economic Area, or
- countries which have a social security agreement with the United Kingdom
Note: If the Industrial Injuries Disablement Benefit includes an economic loss component, for example, through payment of the associated reduced earnings allowance, then the compensation recovery provisions may apply.More ?
Indexation of British official public service and armed forces pensions
British official public service pensions and armed forces superannuation pensions are indexed every year in line with the UK Retail Price Index.More ?
Indexation of other foreign pensions
Other British pensions and other foreign pensions are paid from a variety of sources depending on the person's country of origin and work history. They may be indexed at different times and rates. The foreign currency amount of non-government British and other foreign pensions is only updated when the person notifies a change in the foreign currency amount actually paid to them.
The Pension Service (UK): EEA and Agreement Countries -
Department of Work and Pensions: What is a Social Security Agreement? -
Guide to Advices: British Pension Batch Reassessment
The Department of Veterans' Affairs.
British state pension (formerly British Social Security Pension ) includes:
UK state pensions paid by the Department for Work and Pensions (including the former graduated and retirement pensions and state pension credit).
For social security purposes, the United Kingdom means:
- Northern Ireland
- Isle of Man
- not Jersey or Guernsey
British official public service pensions are those set out in schedule 2 of the UK Pensions (Increase) Act 1971. The scheduled schemes include pensions from the following UK schemes:
- Ministerial and parliamentary
- European Parliament
- Civil service
- Administration of justice, including coroners, court and police staffs and probation service
- Police and firemen
- Teachers and school staff
- National health service
- National insurance
- Diplomatic, colonial and overseas service
- Local government
- Service in Ireland
- Pensions payable by the London Pensions Fund Authority
- Widows of civilians killed abroad in the sphere of military operations
- Civilian employees of Territorial and Auxiliary Forces Associations
For CLIK purposes, British refers to the British Isles:
- Northern Ireland
- Isle of Man
- other adjacent islands