Social Security (Proportional Portability of Pensions) Amendment Act 1986

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Social Security (Proportional Portability of Pensions) Amendment Act 1986

No. 5 of 1986

 

An Act relating to Social Security

[Assented to 10 April 1986]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title, &c.

1. (1) This Act may be cited as the Social Security (Proportional Portability of Pensions) Amendment Act 1986.

(2) The Social Security Act 19471 is in this Act referred to as the Principal Act.

Commencement

2. This Act shall come into operation on 1 July 1986.

3. Section 83aa of the Principal Act is repealed and the following section is substituted:

Interpretation

“83aa. (1) In this Part, unless the contrary intention appears—

‘pension’ means a pension under Part III or IV or a benefit under Part IVaaa;


‘period of residence in Australia’, in relation to a person, means the period, or the aggregate of the periods, during which the person has been a resident of Australia, other than any period—

(a) during which the person had not attained the age of 16 years; or

(b) after the person, being a woman, had attained the age of 60 years or, being a man, had attained the age of 65 years.

“(2) Where a person who is in receipt of an age pension or an invalid pension is a married person and the person’s spouse is in receipt of an age pension or an invalid pension, the period of residence in Australia of the person shall, for the purposes of this Part, be taken to be the period of residence in Australia of the person or the person’s spouse, whichever is the longer.

“(3) For the purposes of this Part—

(a) the period of residence in Australia of a person who is in receipt of a wife’s pension shall be taken to be the period of residence in Australia of the person’s spouse; and

(b) the period of residence in Australia of a person who is in receipt of a carer’s pension shall be taken to be the period of residence in Australia of the person in respect of whom the first-mentioned person is providing constant care and attention.

“(4) The period of residence in Australia of a person who is in receipt of a widow’s pension and who became qualified to receive that pension by reason of the death of the person’s former spouse shall, for the purposes of this Part, be taken to be—

(a) the period of residence in Australia of the person; or

(b) the period of residence in Australia of the person’s former spouse,

whichever is the longer.

“(5) For the purposes of the definition of ‘period of residence in Australia’ in sub-section (1), a person shall be taken to have been a resident of Australia during a period during which the person was an absent resident.

“(6) Where the period of residence in Australia of a person would, apart from this sub-section, be a number of whole months, that period of residence in Australia shall, for the purposes of this Part, be increased by one month.

“(7) Where the period of residence in Australia of a person would, apart from this sub-section, be a number of whole months and a day or days, that period of residence in Australia shall, for the purposes of this Part, be increased so that it is equal to that number of months plus one month.”.

4. After section 83ab of the Principal Act the following section is inserted:

Rate of pension payable outside Australia

“83ac. (1) Where a person who commences to receive a pension after 1 July 1986 leaves Australia after commencing to receive that pension and is absent from Australia for more than 12 months, the annual rate of pension payable to the person after the end of the period of 12 months after the departure of the person from Australia and while the person is absent from Australia is the rate calculated in accordance with sub-section (3).

“(2) Where a person who is absent from Australia on 1 July 1986 commences, after that date, to receive a pension by virtue of section 21a or 24a, sub-section 31 (1a), sub-paragraph 33 (1) (c) (ii) or section 61a or 61b, the annual rate of pension payable to the person while the person is absent from Australia is the rate calculated in accordance with sub-section (3).

“(3) For the purposes of sub-sections (1) and (2), the annual rate of pension payable to a person is the rate calculated in accordance with the formula where—

P is the annual rate of pension that would be payable to the person apart from this section; and

Q is the number of months of the period of residence in Australia of the person or 300, whichever is the lower number.

“(4) Where—

(a) this section applies in relation to a person who is receiving a pension; and

(b) another pension is granted to the person by virtue of section 83af, this section continues to apply in relation to the person while the person remains outside Australia.

“(5) This section does not apply to—

(a) a person who—

(i) was a resident of Australia or an absent resident on 8 May 1985; and

(ii) commences to receive a pension before 1 January 1996,

during any absence of the person from Australia that commenced before 1 January 1996;

(b) a person who—

(i) was a resident of Australia or an absent resident on 8 May 1985; and

(ii) is in a country with which Australia does not have an agreement that affects the operation of this Act;


(c) a person who is receiving an invalid pension that the person became qualified to receive by reason of becoming permanently incapacitated for work or permanently blind while the person was in Australia or during a temporary absence from Australia; or

(d) a person who is receiving a widow’s pension that the person became qualified to receive under section 60 by reason of the death in Australia or during a temporary absence from Australia of the person’s former spouse.”.

Grant of new pension to pensioner outside Australia

5. Section 83af of the Principal Act is amended by omitting sub-section (4) and substituting the following sub-section:

“(4) A reference in sub-section (2) or (3) to a prescribed provision is a reference to section 21a or 24a, sub-section 31 (1a), sub-paragraph 33 (1) (c) (ii) or section 61a.”.

 

NOTE

1. No. 26, 1947, as amended. For previous amendments, see Nos. 38 and 69, 1948; No. 16, 1949; Nos. 6 and 26, 1950; No. 22, 1951; Nos. 41 and 107, 1952; No. 51, 1953; No. 30, 1954; Nos. 15 and 38, 1955; Nos. 67 and 98, 1956; No. 46, 1957; No. 44, 1958; No. 57, 1959; No. 45, 1960; No. 45, 1961; Nos. 1 and 95, 1962; No. 46, 1963; Nos. 3 and 63, 1964; Nos. 57 and 152, 1965; No. 41, 1966; Nos. 10 and 61, 1967; No. 65, 1968; No. 94, 1969; Nos. 2 and 59, 1970; Nos. 16 and 67, 1971; Nos. 1, 14, 53 and 79, 1972; Nos. 1, 26, 48, 103 and 216, 1973; Nos. 2, 23 and 91, 1974; Nos. 34, 56, 101 and 110, 1975; Nos. 26, 62 and 111, 1976; No. 159, 1977; No. 128, 1978; No. 121, 1979 (as amended by Nos. 37 and 98, 1982); No. 130, 1980; Nos. 61 and 170, 1981; No. 159, 1981 (as amended by No. 98, 1982); Nos. 37, 98 and 148, 1982; Nos. 4 and 36, 1983; No. 69, 1983 (as amended by No. 78, 1984); Nos. 46, 78, 93, 120, 134 and 165, 1984; and Nos. 24, 95 and 127, 1985.

[Minister’s second reading speech made in—

House of Representatives on 20 November 1985

Senate on 19 February 1986]

Overview

The Social Security (Proportional Portability of Pensions) Amendment Act 1986, enacted by the Queen and the Senate and the House of Representatives of the Commonwealth of Australia, addresses the need to reform pension portability for individuals who have resided in Australia and then reside abroad. The Act amends the Social Security Act 1947 to ensure that individuals who have built up pension entitlements in Australia are not disadvantaged by relocating overseas. The policy objective is to provide a proportional pension for those who leave Australia and continue to receive pensions based on their Australian residency periods. This amendment ensures that the pension payable is proportional to the time spent in Australia, offering a fair adjustment for those who have contributed to the Australian pension system but subsequently live abroad.

Scope and Application

The Social Security (Proportional Portability of Pensions) Amendment Act 1986 applies to individuals who are recipients of a pension under Part III or IV of the Social Security Act 1947, as well as benefits under Part IVaaa. The Act is concerned with the calculation of the annual rate of pension payable to individuals who commence receiving a pension after 1 July 1986 and subsequently leave Australia for more than 12 months. It also applies to individuals who were absent residents on 8 May 1985 and commence receiving a pension after 1 July 1986. The Act has a Commonwealth reach, applying across Australia. The Act does not apply to certain categories of pensioners, such as those who were residents or absent residents on 8 May 1985 and commence receiving a pension before 1 January 1996, pensioners in countries with which Australia does not have an agreement that affects the operation of this Act, those receiving an invalid pension due to permanent incapacity for work or blindness acquired in Australia or during a temporary absence from Australia, and those receiving a widow's pension due to the death of their former spouse in Australia or during a temporary absence from Australia. The Act extends its application through subordinate instruments by referring to specific sections of the Principal Act.

Key Provisions

The Social Security (Proportional Portability of Pensions) Amendment Act 1986 introduces amendments to the Social Security Act 1947, specifically concerning the proportional portability of pensions. Under section 3, the Act repeals section 83aa of the Principal Act and substitutes it with new definitions and provisions for calculating pension rates based on the period of residence in Australia. This includes provisions for married couples and dependents, as well as for widows and carers (section 3). The Act also introduces a new section, 83ac, which specifies the rate of pension payable to individuals who are absent from Australia for more than 12 months after commencing to receive a pension. The rate is calculated using a formula that considers the person's period of residence in Australia and the annual rate of pension that would be payable if they were residing in Australia (section 4). The Act imposes obligations on individuals who are in receipt of a pension and subsequently leave Australia. They must comply with the new provisions regarding the calculation of their pension rate while they are absent from Australia. This includes adhering to the rules outlined in section 4 for determining the applicable period of residence in Australia. Additionally, section 5 amends section 83af of the Principal Act to clarify the circumstances under which a new pension may be granted to a pensioner who is outside Australia. The Act provides for certain exceptions to the application of section 83ac, such as for individuals who were residents of Australia on a specific date prior to the commencement of the Act, or who are receiving certain types of pensions based on their circumstances in Australia (section 4(5)). Failure to comply with the provisions of the Act may result in incorrect calculation of pension rates, which could have financial implications for the individual and the relevant government authorities. However, the Act does not explicitly state any specific penalties or consequences for non-compliance beyond the incorrect calculation of pension rates.

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Social Security Law
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Act
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Commencement Provisions
Definitions & Interpretation
Repeal & Amendment
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.