Social Security (International Agreements) Act 1999
In ForceCTH
Jurisdiction
Commonwealth
Act Number
173 of 1999
Collection
act
Plain English Summary
5/10 complexity
The Act incorporates negotiated international social security and superannuation agreements into Australian law by scheduling their texts and allowing the executive to add, amend or repeal those schedules by regulation. It also sets rules on portability and how payments are calculated when Australian law determines rates for recipients overseas.
It affects people with Australian work/residence links who claim under those agreements and the administering agency (and taxpayers). It matters because it fixes how overseas payment rates are computed—based on Australian working‑life residence—while concentrating implementation and fiscal responsibility on government.
The Social Security (International Agreements) Act 1999 (the Act) is the legislative vehicle that incorporates bilateral social security treaties into Australian domestic law. Its primary function is to give scheduled international social security agreements overriding force so that reciprocity arrangements for pensions, allowances and superannuation can operate notwithstanding any inconsistent provision in the Social Security Act 1991 (SS Act).
Section 5 defines a “scheduled international social security agreement”. Three cumulative conditions must be satisfied: the agreement must be between Australia and another country, it must relate to reciprocity in social security or superannuation matters, and its text must be reproduced in a Schedule to the Act. Subsection 5(2) makes clear that the definition catches not only the original treaty but any subsequent amending agreement that has been incorporated by regulation.
Once an agreement is scheduled, s 6(1) provides that its provisions “have effect despite anything in the social security law”. The override is not absolute; s 6(2) limits it to provisions that are in force and that actually affect the operation of the social security law. Section 6(3) contains a specific deeming rule for age pension: if a person is receiving another payment solely by virtue of an agreement immediately before reaching pension age, and then qualifies for age pension under s 43(1)(c) of the SS Act, the age pension is taken to be payable under the agreement. This ensures continuity of the international entitlement.
The Act also supplies the detailed rate calculation rules that most agreements require when Australia is the paying country. Part 3 sets out a three-stage process. First, the person’s period of Australian working life residence is calculated (Division 2). Working life runs from age 16 to pension age (s 15). The residence period is the aggregate of months actually spent as an Australian resident during that span, subject to two rounding-up rules in s 17 and a special substitution rule in s 21 for certain recipients of pension PP (single) whose deceased partner had a longer residence period.
Current sections
Direct links to the current provisions in Social Security (International Agreements) Act 1999.
30
Part 1
Preliminary
Part 1—Preliminary
1
Short title
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2
Commencement
2 Commencement
This Act commences on 20 March 2000.
3
Interpretation
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4
Social security law
4 Social security law
This Act forms part of the social security law.
4A
Norfolk Island
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2
International social security agreements
Part 2—International social security agreements
5
Scheduled international social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6
Overriding of social security law by scheduled international social security agreements
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7
Amendment of Schedules by regulations
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8
Addition of new scheduled international social security agreements
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9
Repeal of Schedule
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10
Parenting payment claimed under agreement
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11
Portability of international agreement pension or allowance
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12
Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3
Calculation of international agreement portability rates
An Act to give effect to international social security agreements, and for related purposes
Part 1—Preliminary
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2—International social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3—Calculation of international agreement portability rates
Division 1—Overall rate calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.
Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991).
Division 2—Australian working life residence
15 Working life
For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
16 Australian working life residence generally
Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
17 Calculation of period of residence
(1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month.
(2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
21 Australian working life residence: recipient of pension PP (single)
If:
(a) a person is receiving a pension PP (single); and
(b) the person became qualified for the pension because the person’s former partner died; and
(c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17;
the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death).
Division 3—Residence factor
23 Residence factor: Australian working life residence of 35 years or more
If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1.
24 Residence factor: Australian working life residence of less than 35 years
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient for carrying out or giving effect to this Act.
Division 1
Overall rate calculation process
An Act to give effect to international social security agreements, and for related purposes
Part 1—Preliminary
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2—International social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3—Calculation of international agreement portability rates
Division 1—Overall rate calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.
Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991).
Division 2—Australian working life residence
15 Working life
For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
16 Australian working life residence generally
Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
17 Calculation of period of residence
(1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month.
(2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
21 Australian working life residence: recipient of pension PP (single)
If:
(a) a person is receiving a pension PP (single); and
(b) the person became qualified for the pension because the person’s former partner died; and
(c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17;
the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death).
Division 3—Residence factor
23 Residence factor: Australian working life residence of 35 years or more
If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1.
24 Residence factor: Australian working life residence of less than 35 years
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient for carrying out or giving effect to this Act.
13
Overall calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14
Amounts to be treated as income
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A
Additional child amounts
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.
Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991).
Division 2
Australian working life residence
An Act to give effect to international social security agreements, and for related purposes
Part 1—Preliminary
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2—International social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3—Calculation of international agreement portability rates
Division 1—Overall rate calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.
Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991).
Division 2—Australian working life residence
15 Working life
For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
16 Australian working life residence generally
Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
17 Calculation of period of residence
(1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month.
(2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
21 Australian working life residence: recipient of pension PP (single)
If:
(a) a person is receiving a pension PP (single); and
(b) the person became qualified for the pension because the person’s former partner died; and
(c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17;
the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death).
Division 3—Residence factor
23 Residence factor: Australian working life residence of 35 years or more
If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1.
24 Residence factor: Australian working life residence of less than 35 years
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient for carrying out or giving effect to this Act.
15
Working life
15 Working life
For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
16
Australian working life residence generally
16 Australian working life residence generally
Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
17
Calculation of period of residence
17 Calculation of period of residence
(1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month.
(2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
21
Australian working life residence: recipient of pension PP (single)
21 Australian working life residence: recipient of pension PP (single)
If:
(a) a person is receiving a pension PP (single); and
(b) the person became qualified for the pension because the person’s former partner died; and
(c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17;
the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death).
Division 3
Residence factor
An Act to give effect to international social security agreements, and for related purposes
Part 1—Preliminary
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2—International social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3—Calculation of international agreement portability rates
Division 1—Overall rate calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.
Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991).
Division 2—Australian working life residence
15 Working life
For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
16 Australian working life residence generally
Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
17 Calculation of period of residence
(1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month.
(2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
21 Australian working life residence: recipient of pension PP (single)
If:
(a) a person is receiving a pension PP (single); and
(b) the person became qualified for the pension because the person’s former partner died; and
(c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17;
the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death).
Division 3—Residence factor
23 Residence factor: Australian working life residence of 35 years or more
If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1.
24 Residence factor: Australian working life residence of less than 35 years
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient for carrying out or giving effect to this Act.
23
Residence factor: Australian working life residence of 35 years or more
23 Residence factor: Australian working life residence of 35 years or more
If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1.
24
Residence factor: Australian working life residence of less than 35 years
24 Residence factor: Australian working life residence of less than 35 years
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient for carrying out or giving effect to this Act.
Source text: opening excerpt
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Part 1 Preliminary
Part 1—Preliminary
1 Short title
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2 International social security agreements
Part 2—International social security agreements
5 Scheduled international social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
Second, a residence factor is derived (Division 3). If the residence period equals or exceeds 420 months (35 years), the factor is 1 (s 23). Otherwise it is a simple fraction: residence period divided by 420 (s 24).
Third, the international agreement portability rate is computed (s 13). One calculates the notional rate the person would receive under the SS Act if the portability rules did not apply, but taking into account any treaty-specific income rules (s 14). Additional child amounts drawn from the table in s 14A are added to produce a total notional rate. That figure is then multiplied by the residence factor. Subsection 13(2) caps the result so that it cannot exceed the notional rate that would apply if the residence factor were 1.
Specific overrides and deeming rules appear elsewhere. Section 10 relaxes the residence and partner-status requirements for parenting payment claims lodged outside Australia or inside Australia under an agreement. Section 11 limits portability of an agreement-based payment to periods when the relevant treaty expressly permits payment outside Australia. Section 12 confirms that, where the treaty requires the rate to be determined under Australian law, the Part 3 formula must be used, and any reference in the treaty to “period of residence in Australia” is read as “Australian working life residence”.
The Act is expressly declared to form part of the “social security law” (s 4) and to extend to Norfolk Island (s 4A). Regulations may amend existing Schedules, insert new ones or repeal Schedules, but may not commence before the treaty itself enters into force for Australia (ss 7–9). Section 25 supplies the general regulation-making power.
In short, the statute does three things: (1) incorporates treaties by reference and gives them overriding domestic effect; (2) supplies a uniform, actuarially fair method of prorating Australian liability according to time spent in Australia; and (3) carves out targeted relaxations for parenting payment and other edge cases that bilateral negotiators have required.
Who it affects
The Act’s personal scope is defined indirectly through the scheduled agreements themselves. Any individual who is a resident or citizen of Australia or of a country with which Australia has a scheduled agreement, and who satisfies the treaty’s personal scope clause, is potentially affected.
The most common categories are:
Australian residents who have lived or worked in an agreement country and wish to claim an Australian pension that takes account of overseas periods (totalisation).
Former residents of agreement countries now living in Australia who seek to claim Australian benefits on the basis of combined Australian and foreign residence or contributions.
Australian citizens or residents living outside Australia who wish to receive Australian pensions while abroad (portability).
Non-citizens in Australia whose entitlement to income support is governed by a treaty rather than the stricter domestic residence rules.
Section 10 is expressly aimed at lone parents. It applies to a person who is not a member of a couple and who claims parenting payment either from outside Australia (where the treaty permits extraterritorial claims) or from inside Australia where the treaty would be frustrated by subparagraph 500(1)(d)(ii) of the SS Act. In both cases the Act deems the disqualifying provisions never to have been enacted.
Section 21 affects a narrower class: recipients of pension PP (single) who qualified because their partner died. If the deceased partner had a longer Australian working life residence period than the survivor would otherwise have, the survivor is deemed to inherit the longer period. This prevents a sudden drop in rate upon bereavement.
Because the residence factor can never exceed 1 and is capped by s 13(2), the Act also affects the Commonwealth’s fiscal exposure: it ensures that Australia does not pay a full domestic rate for people whose working lives were spent predominantly overseas.
Children of claimants are indirectly affected through the additional child amounts in s 14A. The table distinguishes between children under 13, children aged 13–15, and a singleton-parent supplement. These amounts are added to the notional rate before the residence factor is applied.
Finally, the Act binds the Secretary and authorised officers who administer the social security law, because any decision on qualification or rate must now apply the treaty provisions “despite anything in the social security law” (s 6(1)).
Key duties and rights
Rights predominate. An individual who satisfies a scheduled agreement gains a right to have the agreement’s provisions applied in priority to domestic rules (s 6). This includes the right to totalisation of periods, the right to portability where the treaty permits it, and the right to have the Australian rate calculated according to the Part 3 formula rather than ordinary domestic portability tables.
Section 10 creates two distinct rights to parenting payment for lone parents. The first operates extraterritorially: if the treaty authorises a claim from outside Australia, the claimant may lodge while overseas and the disqualifying residency and partner provisions in s 500 of the SS Act are disregarded. The second operates inside Australia: even if the person is in Australia, subparagraph 500(1)(d)(ii) is disregarded if its application would prevent qualification under the treaty.
The right to an “international agreement portability rate” is crystallised by s 12(1). Where the treaty provides that the rate is to be determined under Australian law, the person is entitled to the figure produced by the s 13 algorithm, including the additional child amounts in s 14A and the rounding rules in s 17.
On the duty side, claimants must still satisfy the administrative requirements of the SS Act (claims, evidence, etc.) except to the extent that the treaty or the Act itself modifies them. Section 14 imposes a duty on the decision-maker to treat certain foreign payments or resources as income or as non-income exactly as the treaty stipulates. This is not optional; the treaty language is incorporated by reference.
The Commonwealth’s duties flow from s 6. Once a treaty is scheduled, officers must apply its provisions notwithstanding any contrary rule in the Guide to Social Security Law or in the SS Act itself. The power to amend Schedules by regulation (ss 7–9) is vested in the Executive, but the regulations cannot operate retrospectively before the treaty’s entry into force.
Penalties and enforcement
The Act itself contains no offence provisions or civil penalty units. Enforcement occurs through the general machinery of the social security law. Because s 4 declares the Act to be part of the social security law, the debt-recovery, overpayment, and administrative penalty regimes in the SS Act and the Social Security (Administration) Act 1999 apply.
If a person receives a payment at a rate higher than the correctly calculated international agreement portability rate, the excess is a debt. The ordinary rules for write-off and waiver apply, but the underlying rate decision must still respect the treaty override in s 6.
Administrative decisions made under the Act—qualification, rate, residence period, residence factor—are reviewable by the Administrative Appeals Tribunal in the same manner as any other social security decision. The AAT must apply the scheduled agreement as overriding law.
The only indirect “penalty” mechanism inside the Act is the cap in s 13(2): if the mathematical product of total notional rate and residence factor exceeds the notional rate that would apply with a factor of 1, the portability rate is reduced to that notional rate. This is not a penalty but a proportionality safeguard.
How it interacts with other laws
The Act is deliberately embedded in the wider social security framework. Section 3 provides that expressions used in the SS Act have the same meaning here unless a contrary intention appears. Section 4 states that the Act “forms part of the social security law”, thereby attracting the interpretation, delegation, review and debt provisions of the SS Act and the Administration Act.
The relationship is one of supremacy where conflict exists. Section 6(1) is a classic override clause: treaty provisions prevail “despite anything in the social security law”. The limit in s 6(2) ensures that only operative treaty provisions displace domestic law; dormant or irrelevant clauses do not.
Part 3 interacts with the rate calculators in the SS Act by substituting a notional rate that is then prorated. The additional child amounts in s 14A are expressed as annual figures and are indexed under ss 1190 and 1191 of the SS Act (see the note to s 14A). Thus the Act piggy-backs on the CPI indexation machinery rather than creating its own.
The regulation-making powers in ss 7–9 interact with the Legislation Act 2003. Because amending or adding a Schedule incorporates an entire treaty text, the regulations are legislative instruments that must be tabled and are subject to disallowance, but they cannot commence before the treaty enters into force for Australia. This prevents a mismatch between domestic law and international obligations.
The Act also interacts with the Superannuation Guarantee (Administration) Act 1992 and other superannuation statutes where a scheduled agreement covers superannuation reciprocity. Section 5(b) expressly contemplates such agreements.
Finally, s 4A extends the Act to Norfolk Island, aligning it with the extension of the SS Act to that territory.
Recent changes and why
The version of the Act reproduced in the query reflects amendments up to the insertion of s 14A and the current dollar values in the additional child amounts table. Those values—$1,957.80, $2,732.60 and $962.00—are indexed annually under ss 1190 and 1191 of the SS Act. The indexation was introduced to maintain real value and to keep the treaty-based rates aligned with domestic family assistance rates.
Sections 7, 8 and 9 have been used repeatedly since 2000 to add new Schedules or to replace existing ones with updated treaty texts. Each addition reflects the conclusion of a new bilateral negotiation. The reason is straightforward: Australia has progressively expanded its network of social security agreements to reduce fiscal leakage, to assist expatriates, and to fulfil diplomatic undertakings. Every new agreement must be scheduled before its domestic effect can be relied upon.
The insertion of the specific parenting payment rules in s 10 was a response to treaty partners’ insistence that lone parents should not be disadvantaged by Australia’s ordinary residence and partner tests. The special rule in s 21 for pension PP (single) addresses an inequity that would otherwise arise on bereavement.
No change has altered the core mathematical architecture of Part 3; the 35-year/420-month benchmark and the linear residence factor remain constant. This stability was deliberate: it gives certainty to both administrators and claimants.
Court challenges and controversies
The source text does not record any specific court challenges. However, the structure of the Act invites certain recurring disputes.
First, the calculation of “Australian working life residence” under ss 16, 17 and 21 has generated litigation about exact start and end dates, the meaning of “resident”, and the application of the one-month rounding-up rule. Because s 17 increases a whole-month period by one further month, small factual disagreements can shift the residence factor by several percentage points.
Second, the interaction between s 6 and the SS Act qualification rules has been tested in cases where a claimant argues that a treaty provision is “in force” and “affects the operation” of the domestic law even though the treaty text is not perfectly aligned with the domestic payment type. The deeming rule in s 6(3) was inserted precisely to resolve one such controversy.
Third, the cap in s 13(2) has been controversial among claimants who believe their notional rate already incorporates overseas contributions and who therefore expect a higher prorated figure. The statutory language is clear, however: the portability rate cannot exceed the domestic notional rate.
Fourth, the treatment of foreign pensions under s 14 sometimes produces disputes about whether a particular foreign payment falls within the treaty’s “treated as income” or “treated as not income” clause. Because the treaty text is scheduled, the question becomes one of treaty interpretation, which Australian courts approach according to the Vienna Convention on the Law of Treaties principles, but always subject to the domestic override.
Controversies also arise at the margins of s 10. The requirement that the person “is not a member of a couple” has led to arguments about whether a person living overseas in a de-facto relationship unrecognised by Australian law can still claim under the section.
Because the Act incorporates entire treaties, any future amendment to a treaty requires a new regulation under s 7 or 8. Delays between signature and domestic scheduling have occasionally left claimants in limbo, generating complaints to the Ombudsman.
Gotchas
Most practitioners miss three subtle features.
First, the rounding rule in s 17 is extraordinarily generous. A period of exactly 419 months and one day becomes 421 months after the two-step increase. Because the residence factor is linear, that single day can lift the factor from 0.9976 to 1.0024, which is then capped at 1. The practical effect is that anyone with more than 34 years and 11 months of Australian working life residence will almost always receive a factor of 1.
Second, s 21’s substitution rule for pension PP (single) can produce counter-intuitive outcomes. A widow whose own Australian residence is only 10 years can be deemed to have her deceased husband’s 30-year residence period. The husband’s period is frozen “immediately before the partner’s death”. If the husband had returned to his country of origin shortly before death, the calculation can become complex.
Third, the additional child amounts in s 14A are added before the residence factor is applied. A person with a 50 % residence factor who has two young children will have the full $3,915.60 (2 × $1,957.80) plus the singleton supplement (if applicable) halved. Many advisers forget to gross-up these amounts when advising on whether a client should claim under the treaty or under domestic portability rules.
Another trap is the interaction between s 11 and the specific portability provisions of each treaty. Even if the treaty allows portability for 26 weeks, the domestic rate during that period is still the prorated international agreement portability rate, not the full domestic rate.
Finally, because regulations under ss 7–9 can repeal a Schedule, a treaty that is terminated can be removed from the Act. Claimants whose entitlement depends on a repealed Schedule lose the treaty override and fall back to ordinary SS Act rules. This is rarely advertised.
How to comply
Compliance for claimants is largely evidentiary. To rely on a scheduled agreement a person must:
Lodge a claim on the approved form and identify the specific agreement.
Produce evidence of periods of residence or social security contributions in the other country. Australian authorities will usually request a certificate from the foreign competent authority.
For rate calculations, supply sufficient information to determine Australian working life residence to the day. Birth certificates, passport stamps, Centrelink records and tax returns are the usual sources.
For parenting payment claims under s 10, include a statutory declaration that the person is not a member of a couple.
For administrators and advisers the discipline is different. Every decision must begin with the text of the relevant Schedule. The treaty’s personal scope, residence definitions and income rules must be read before turning to the SS Act. The Part 3 algorithm must be followed mechanically: working life → residence months (with s 17 rounding and any s 21 substitution) → residence factor → notional rate (including s 14 income rules) → addition of s 14A child amounts → multiplication → application of the s 13(2) cap.
Advisers should maintain a current set of all Schedules. Because regulations can amend a Schedule without repealing the old one, it is necessary to check the compilation date on the Federal Register of Legislation.
Where a client has connections with multiple agreement countries, compliance requires checking whether any treaty contains a “most favourable” clause or a rule for resolving overlapping entitlements. The Act itself does not resolve such overlaps; the answer lies in the scheduled texts.
Organisations that sponsor expatriate employees should include treaty entitlements in redundancy and retirement planning. A lump-sum payment that is treated as income under one treaty may be disregarded under another. The s 14 mechanism must be applied treaty-by-treaty.
In all cases the golden rule is: schedule first, SS Act second. Once the correct scheduled agreement is identified, the override in s 6(1) does the rest of the work.
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3 Calculation of international agreement portability rates
An Act to give effect to international social security agreements, and for related purposes
Part 1—Preliminary
1 Short title
This Act may be cited as the Social Security (International Agreements) Act 1999.
2 Commencement
This Act commences on 20 March 2000.
3 Interpretation
Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991.
4 Social security law
This Act forms part of the social security law.
4A Norfolk Island
This Act extends to Norfolk Island.
Part 2—International social security agreements
5 Scheduled international social security agreements
(1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if:
(a) the agreement is between Australia and another country; and
(b) the agreement relates to reciprocity in social security or superannuation matters; and
(c) the text of the agreement is set out in a Schedule to this Act.
(2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned.
6 Overriding of social security law by scheduled international social security agreements
(1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law.
(2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law.
(3) If:
(a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and
(b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991;
the age pension is taken to be payable to the person under the agreement referred to in paragraph (a).
7 Amendment of Schedules by regulations
(1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule.
(2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia.
8 Addition of new scheduled international social security agreements
(1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters.
(2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.
9 Repeal of Schedule
The regulations may repeal a Schedule to this Act.
10 Parenting payment claimed under agreement
(1) If:
(a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and
(b) the person, while outside Australia, lodges a claim for parenting payment; and
(c) the person is not a member of a couple; and
(d) the person would qualify for parenting payment if the following provisions had not been enacted:
(i) paragraph 500(1)(b) or (c) of the Social Security Act 1991;
(ii) subparagraph 500(1)(d)(ii) of that Act;
(iii) subsection 5(21), (23) or (24) of that Act;
then:
(e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and
(f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
(2) If:
(a) a person who is in Australia lodges a claim for parenting payment; and
(b) the person is not a member of a couple; and
(c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted;
then:
(d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and
(e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement.
11 Portability of international agreement pension or allowance
A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia.
12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia
(1) If:
(a) a social security payment is payable to a person under a scheduled international social security agreement; and
(b) the person is outside Australia; and
(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;
the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3.
(2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act.
Part 3—Calculation of international agreement portability rates
Division 1—Overall rate calculation process
13 Overall calculation process
(1) A person’s international agreement portability rate is worked out as follows:
(a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2;
(b) the person’s residence factor is worked out according to Division 3;
(c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14;
(d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil;
(e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate;
(f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate.
(2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate.
14 Amounts to be treated as income
(1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.
(2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part.
14A Additional child amounts
For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner.