Bills Digest No. 96 2001-02
Family and Community Services Legislation Amendment
(Further Simplification of International Payments) Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
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and Community Services Legislation Amendment (Further
Simplification of International Payments) Bill 2002
Date Introduced: 13 February 2002
House: House of Representatives
Portfolio: Family and Community Services
Commencement: Sections 1,2 and 3 commence on
Royal Assent. Schedule 1 commences on 1 April 2002 unless Royal
Assent is not received by then, in which case it will commence on 1
The Bill proposes
changes in two areas:
- Australian working life residence (AWRL) requirements for
pensions paid overseas on a long-term basis will be extended from
25 to 30 years. People participating in the Pension Bonus Scheme
will be able to accrue AWRL after reaching age pension age,
- Standardised rules for the recovery of overpayments from people
receiving foreign pensions will be introduced.
Australian working life residence
A system of proportional portability applies to
the rate of pension to be paid after a pensioner has been absent
from Australia for a continuous period of 26 weeks. The pension
rate paid overseas is a proportion of the full rate, based on the
person's AWLR up to a maximum period of 25 years or 300 months.
This bill proposes to increase that period to 30 years or 360
months. It also proposes to allow people participating in the
Pension Bonus Scheme to add bonus periods (accrued after age
pension age) to their AWRL that applied at age pension age.
Proportional portability applies to:
- Age Pension
- Wife Pension
- Widow B Pension
- Parenting Payment (Single)
- Disability Support Pension, and
- Carer Payment.
AWLR consists of all periods between the ages of
16 and age pension age when a person was an Australian resident.
The person need not have been working or paid taxes during those
A fuller treatment of portability is provided in
the digest for the Social Security and Veterans Entitlements
Legislation Amendment (Miscellaneous Matters) Bill 2000. That
bill included measures that modified the proportional portability
Comparable Foreign Payments (CFP)
Recipients of the following payments, are
required to take reasonable action to obtain CFPs:
- Age Pension
- Widow Allowance
- Wife Pension
- Widow B Pension
- Parenting Payment
- Disability Support Pension
- Carer Payment, and
- Bereavement Allowance
A CFP is a payment from a foreign country
similar to a social security pension. Payments included are those
paid periodically to provide income support for:
- Retirement or old age
- Invalidity or disability, and
- Widowhood or survivorship.
Payments made to a wife or carer and company
pensions and superannuation are also included. However payments
such as war, military service, restitution or compensation payments
are not included.
The initial CFP provisions were introduced in
March 1994. From September 2000 the requirement to seek a CFP was
extended from those with entitlement in countries that Australia
had a social security agreement with to those with entitlement in
any country.(1) As a transitional measure an amnesty
applied from 20 September 2000 to 19 January 2001 preventing the
recovery of overpayments caused by the receipt of undeclared or
under declared CFPs.
This Bill proposes to correct an anomaly that
prevents the recovery of overpayments caused by the receipt of a
lump sum of arrears of a CFP where the pension comes from a country
which does not have a social security agreement with Australia.
Part 1 of Schedule
1 increases the AWLR from 25 years to 30 years.
Part 2 of Schedule
1 provides for bonus periods for the purposes of the
Pension Bonus Scheme to be added to a person s AWLR.
Part 3 of Schedule
1 deals with comparable foreign payment debt recovery.
Proposed section 1228A sets out a standardised
approach to the treatment of lump sum arrears of comparable foreign
- See the Digest for the Social Security and Veterans
Entitlements Legislation Amendment (Miscellaneous Matters) Bill
Digest No. 145 1999 200.
12 March 2002
Social Policy Group
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