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Superannuation contribution caps for 2015/16

The concessional and non-concessional contributions caps for the 2015/16 financial year have not changed from the 2014/15 financial year. As a reminder, these rates are as follows:

General concessional contributions cap$30,000$30,000
Higher concessional contributions cap (for persons aged 50 or over at the end of the financial year)$35,000$35,000
Non-concessional contributions cap$180,000$180,000
Non-concessional contributions cap – bring forward$540,000$540,000

Age pension and travelling overseas

If you receive the Age Pension and intend to travel overseas for an extended period of time, you should know there are rules that affect whether you can receive your entitlements whilst you are overseas.

The rules discussed below apply if you qualify for the Age Pension without the assistance of a Social Security Agreement with another country and are a general understanding of the rules, your situation may be different.

The first rule that you should be aware of is that Age Pension is portable indefinitely. This means it can continue to be paid to you for an unlimited period time while you are outside Australia.

The second rule is a qualification of the first rule.  If you are overseas for more than 26 weeks, your payment will be re-calculated in proportion to your individual circumstances. (Note: the Government has announced in the 2015/16 Federal Budget that it proposes to reduce this period to 6 weeks from 1 January 2017.) This means you may receive a proportion of your normal rate of Age Pension, if you have not resided in Australia for at least 35 years during your working life (between age 16 and Age Pension age). The period of your ‘Australian working life residence’ is measured in months and the proportional rate is calculated as the number of months plus 1 month divided by 420 months (equivalent to 35 years).

Case study:

June receives Age Pension of $3,500 per annum. She intends to travel overseas for more than 26 weeks and has resided in Australia for 18 years between the age of 16 and Age Pension age.

For the first 26 weeks of her overseas holiday, she will receive the same rate of Age Pension. However she will notice a small drop in her payment after 6 weeks, as she is not entitled to the maximum Pension Supplement ($63.90 per fortnight for singles and $96.40 for couples, combined) and instead will receive the Pension Supplement basic amount ($22.30 per fortnight for singles and $37.00 for couples, combined).

Her proportional rate of Age Pension paid after being overseas for 26 weeks will be:

$3,500 x 217 months/420 months = $1,808 per annum.

A special rule applies to persons who live overseas and return to Australia to claim the Age Pension. They cannot take their Age Pension overseas unless they remain in Australia for at least 2 years.

If you have plans to travel overseas and would like more information on how your Age Pension entitlement may be affected, contact Centrelink to discuss your individual situation.

If you would like to discuss your Age Pension, or any other aspects of your financial plan, we would be happy to hear from you.

RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This information does not consider your personal circumstances and is general advice only. You should not act on any information without obtaining professional financial advice specific to your circumstances. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out.
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