not2old

If this has not already been covered or discussed somewhere on the Australia threads .....

For those who are already collecting any UK state pension or in due course will - Osborne the UK finance minister (chancellor) in his autumn statement

http://www.thisismoney.co.uk/money/p...e-pension.html

Anyone here with half a brain know if this would work to our advantage?

Pensioners will be given the opportunity to buy retirement income from the Government by making additional National Insurance contributions that could get them an extra £1,300-a-year on top of their state pension.

Chancellor George Osborne announced in his Autumn Statement that pensioners missing out on the flat-rate £155-a-week state pension will get the chance to boost their incomes in a six month window between October 2015 and April 2016.

Currently, the average pension income for those with basic state pension and S2P is between £130 and £135-a-week, and many people due to retire in the next few years are unhappy to be missing out on the £155-a-week new state pension being introduced in April 2016.

But pensioners will be able to close this gap by paying additional contributions, the value of which they will get back just a few years down the line.
Even those who have achieved the maximum state pension and S2P will be able to buy additional income, as will those on defined benefit pension schemes who were contracted-out of S2P, and therefore were only eligible to take the basic state pension.

More details about how it will work will be revealed in the next 18 months, but those interested in boosting their income should consider starting to save now.

Mike at Taree

Thanks, that interests me as I'm up for about a quarter of a pension in the New Year, as I worked in the UK in the 60s and 70s for about 8 years.
I wonder if the contributions are going to be based on what I would have to contribute in todays money or if it's pegged to the contributions of that era, when a quid would get you well hammered on Brains SA.

ozzieeagle

9.5 years for me in the UK workforce... I thought that meant I was 6 months of off the full basic minimum pension ?

Ergo all I have to do is top up 6 months worth to get the minimum UK pension ? ... then we see this news


Bloody confusing as all I know is the Aussie system.


Maybe I need an expert... you too Mike ?

Mike at Taree

ozzie, the system changed a couple of years ago, and you can now get a thirtieth of a pension for each year you worked, AFAIK. However I think they are going to switch it back when they bring in the new increased rate. So it's a window of opportunity for us at the moment. You could end up getting a third pension, handy beer money. SWMBO's daughter in law is getting a part pension, she rang the office in the UK - that I'll probably have to do myself -

International Pension Centre, Wolverhampton: 0011 44 191 218 7777


edit: I believe under the previous system the ten year thing meant that you had to work for at least ten years to get ANY sort of a pension, nevermind the full one. I expect you would still have to have a full thirty years of contributions to get 100% payment. However there are a lot of little old ladies out there on the full pension who never worked. As you say, expert advice required.

not2old

under the current rules 30 years of NIC's gets you 100% pension, you'll get 8/30 of approx current full pension of £110.95

My suggestion is to get a pension forecast after that you are allowed to make voluntary NIC's contributions for back 6 years at class 2 or class 3 depending on your circumstances.

With 8 or 9 years + another 6 = 14/30 approx 46% of the pension

http://www.hmrc.gov.uk/ni/volcontr/abroad.htm

If you turn pension age before April my suggestion is to defer till May 1 - not only will your percentage be based on the new rate of £113/wk & for every 5 wks you deferred you'll get an extra 1% increase in your pension.

ozzieeagle

Thanks for the number... I was of the understanding that you could top up under the previous system, IE: in my case circa 6 months to qualify for the minimum .... The number you've given, is it one of those 1 pound a minute jobs that they had in place last time I tried ?

I can see now that the whole system has changed and I must be entitled to 9.5 of 30 at the current time... without the new protocols.


Does anyone know if my old private pension scheme with Willis would have kept my NI number ? I've got a private pension scheme of circa 8 years as well from my time at my last employer ?

Mike at Taree

According to their site, I seem to be able to top up my missing contributions at the rate of GBP 2.70 a week, based on my age, or about $250 a year.

They calculated that I actually have around 11 years of credit because I was at school and uni between the ages of 16 and 19 so a further 4 years of contributions would get me a half pension, and presumably around five grand Australian would entitle me to the full pension.

Hmm, might get the forms sent out.

Edit: I've just had to fill in Centrelink forms for them to forward to UK and it's clear that based on your name, date of birth, last address in the UK and the last three employers, your National Insurance number and employment record should all be on their system.

Worth drawing down five grand from my Aussie Super if necessary. Should recoup that in less than a year after Centrelink have taken a wee chop out of the UK stream .

ozzieeagle

Thats news to me, that you claim via the Aussie system and Centerlink... I thought you had to contact the UK yourself and go through their phone systems or write detailed letters.

I may go see them and get some advice... Not that Centerlink is my favourite place to queue up and wait for hours Might be worth it though.

NickyC

You don't as a rule. You claim a UK pension via the UK.

If you're claiming an Australian pension and you're also entitled to a UK pension then Centrelink will sort out the UK pension claim for you. This is so they can deduct what you get from the UK from the Australian pension. (Why should they pay you money if they can get the UK government to pay some of it )

If you're not getting an Australian pension you can still claim your UK pension and you don't have to involve Centrelink.

annier

We have just gone through this, We had to sort out our own UK pensions, and what we get is not taken off the Aussie pension but classed as taxable income at the end of the tax year, our New Zealand pension is deducted from the Aussie pension though, so many forms to fill in, but must say Centrelink where very helpful on the Gold Coast.

Mike at Taree

What happens is that when you originally get into the Centrelink system, whether it's Newstart, family payments, whatever then if you are a migrant you are flagged on the system to ring a bell when you reach about four months before your 65th birthday.

Then you have about six weeks to fill out a form for them to forward to the UK Pensions Office. Centrelink have an overseas Pensions Office in Hobart who can assist.

If you are entitled to an overseas pension then you must at least return the forms to Hobart otherwise any Centrelink payment you are on gets cancelled. However they are quite flexible if there are details you need to chase up at your end. They forward your forms onto Newcastle Upon Tyne in a format that meshes in with their requirements and Newcastle sends you claim forms.

Centrelink doesn't follow up, but you are obliged to inform them of any new income stream, as per standard.

For age pensioners I understand you can get about an extra $150 per fortnight before they start chopping into your Aussie pension. In my case a half pension would be a sweet spot.

As posted, if you aren't eligible for a Centrelink pension then they won't be interested in you.

Hino

well I have just gone through it as well and my experience is entirely different.

When Centrelink discovered that I was in receipt of a UK pension, not only did they deem my UK pension to be income and deducted my Australian pension by 50c for every $1 of pension that I received from UK. They also deemed that the lump sum I had recieved from UK in reward for not claiming my UK from the date of my 65th birthday, was actually 'pension payments' and extended the deemed period of UK pension receipts back a further twelve months.

This almost magical feat of accounting, has now resulted, by Centrelink's reckoning, in me being "overpaid" by $2,500 which I now have to "repay".

So for me the net result of this UK pension award ( 56 Pounds per week ), and the lump sum back payment of 2,800 Pounds has been........

Australian State pension reduced by $80 per fortnight, demand from Centrelink for $2,500 in "overpayment" plus I can look forward to giving the ATO a further 30% of all funds I receive from UK.

In my situation, every Dollar I receive from UK results in a net gain to me of 20c. ( before accountancy and compliance fees).

And bye the bye...Centrlink have been far from helpful. In fact it was totally wrong "information" from Centrelink that caused me to be in this tax paying situation in the first place.

p.s. I forgot to add, that this could also put me into a UK tax paying situation.

annier

Hi Hino, they told us you can earn $125-00 per week without it effecting your pension, as that's the only other income we have it doesn't effect it, sorry you had a bad experience with them at Centrelink, we went to the Robina office and they were very good, they did say anything over $125 per week would reduce the pension by 50 cents a week out of every dollar.

Hino

Hi Annier,

I glad to here that it worked out for you and I hope that extra pension helps with the Christmas bills

I'm a single man, so my "allowance" is only $160 per fortnight and I'm already over that. I'm particularly 'dirty' with Centrelink because they gave me completely wrong information as how the proceeds from the recent sale of my house would effect my pension.

This latest mess with the UK pension just compounds the problem.

I'll detail my experiences in this thread when I have more time in the hope that might help others avoid the trap I fell into.

Hino

bobbyftm

Does anyone know by chance the situation regarding income tax in Australia if one was to start claiming from a private pension in England whilst now residing in Australia (lump sum & weekly pension) if the person involved is under both the state pensionable ages in both countries. Is this taxable in Australia ?
Thank you