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Topping up your National Insurance Contributions

Topping up your National Insurance Contributions

Old Sep 30th 2020, 1:36 am
  #46  
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Default Re: Topping up your National Insurance Contributions

Originally Posted by louie View Post
Does anyone know if, if you return to live (i.e. long term, not for a holiday) in the UK as a pensioner but then decide at a later stage to leave again, whether the state pension "resets", so that you would henceforth be entitled to a higher albeit again frozen rate?
That's exactly what happens Louie
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Old Sep 30th 2020, 1:43 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by spouse of scouse View Post
That's exactly what happens Louie
Thanks. Personal (spousal) experience?
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Old Sep 30th 2020, 1:50 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by louie View Post
Thanks. Personal (spousal) experience?
Yep. Husband had just started claiming his UK State pension in Oz, a few months before we moved to the UK. He advised the International Pensions Centre in Newcastle before he left that he was moving back, they in turn told him to contact the Department of Works and Pensions when he arrived. He did that and shortly afterwards received a letter from them advising of his new (increased) pension rate. That's stayed the same since we moved back to Oz two years ago.
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Old Sep 30th 2020, 2:39 am
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Default Re: Topping up your National Insurance Contributions

Good to know. Thanks for that.
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Old Sep 30th 2020, 2:43 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by louie View Post
Good to know. Thanks for that.
You're very welcome Louie
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Old Sep 30th 2020, 3:41 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by louie View Post
Good to know. Thanks for that.
This is an interesting one. My Dad lived in South Africa but now lives in The Philippines. His pension was frozen in SA but bumps up to current value when he is in The Philippines. When he returns to SA to stay for a while it reverts back to the previous frozen value. I wonder if the reset and retention of current value only occurs if the pensioner moves back to the UK.
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Old Sep 30th 2020, 3:47 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
This is an interesting one. My Dad lived in South Africa but now lives in The Philippines. His pension was frozen in SA but bumps up to current value when he is in The Philippines. When he returns to SA to stay for a while it reverts back to the previous frozen value. I wonder if the reset and retention of current value only occurs if the pensioner moves back to the UK.
I never heard of that. You may be right.
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Old Sep 30th 2020, 4:00 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by Zig Zag Wanderer View Post
I never heard of that. You may be right.
Would be good to see the actual legislation/rules. Will see if I can dig it up later.
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Old Feb 3rd 2021, 1:45 pm
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Default Re: Topping up your National Insurance Contributions

Hi there, long time no see. Back specifically for this particular thread.

Enjoying my retirement and fill my days with things other than the net presently.

I've just got off of the phone after successfully claiming my UK pension and it does need topping up.

There are a hell of a lot of misconceptions about the Aus Pension V the UK Pension as far as I'm concerned. However everyone has individual circumstances. OK ... Well it does turn out that everyone that works and lives overseas does indeed qualify for class 2 payments as stated by the OP. A years worth of payments whether that be 158 pounds for class2 or 748 Pounds for Class3 is worth an extra 5 pounds a week extra on one's pension. Hence class 2 payers get their return after 32 weeks. I'm not sure that class 3 top up payments are worth paying from Australia as we all now know the UK pension is frozen here in Australia, plus it would take at least 3 years to see any profit on that investment. IE: Those top up payment at class 3 rates of 748 quid may well get you a better return in the tax free zone of the Aussie Superannuation system. Especially noting the frozen aspect of the UK pension here.

Then there's the Aussie Assets test on the Aus Government pension, which most UK migrants can't seem to get their head around. An alien foreign concept so to speak.

Thing is you can own your own home to any value that you like as it's fully outside of the assets test.. So if one falls close to the AUD 886,000K in the assets test for a couple that cuts one off a Aus Pension, then you can upsize and hold the money in one's family home. Plus after the pension age here in Aus some states have no or reduced stamp duty on purchasing property. Then one can release the funds as needed held in the property by downsizing as one uses up either their super or other assets... It's the best way to play the assets test game here in Aus. If you can be bothered... It could well be a lucrative game though. Bear in mind that currently you can top up your super from any downsizing of property to the tune of 300k each for a couple.

Changing the subject just slightly. I also after a hell of a lot of paperwork, dealing with international tax accountants and pension specialists managed to cash in my UK private pension. It was a trivial sum.... circa 40K AUD for the 7 years or so I worked between 73 and 80 in the UK. Cost 2,200 bucks to land that and a hell of a lot of complicated tax issues both here and the UK. I really didn't want a small portion of that as an annual income as it would have complicated the way I or should I say my wife and I will deal with the Australian Pension system.


Might chat about Lifestyle villages later.... been looking at a lot of them. Some very nice ones out there, complete with Golf courses, swimming pools fishing boats, access to electric cars etc etc.
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Old Feb 3rd 2021, 11:18 pm
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Default Re: Topping up your National Insurance Contributions

Then there's the Aussie Assets test on the Aus Government pension, which most UK migrants can't seem to get their head around. An alien foreign concept so to speak.

Thing is you can own your own home to any value that you like as it's fully outside of the assets test.. So if one falls close to the AUD 886,000K in the assets test for a couple that cuts one off a Aus Pension, then you can upsize and hold the money in one's family home. Plus after the pension age here in Aus some states have no or reduced stamp duty on purchasing property. Then one can release the funds as needed held in the property by downsizing as one uses up either their super or other assets... It's the best way to play the assets test game here in Aus. If you can be bothered... It could well be a lucrative game though. Bear in mind that currently you can top up your super from any downsizing of property to the tune of 300k each for a couple.
Agree with the class 2 contributions being a great deal. Class 3 probably not so much. Freezing the pension rate is an awful con, but it can be reset by returning to the UK temporarily.

Things to consider regarding oz age pension and asset/income tests that most people don't seem to know and are hard to find out:

Any assets, including super but excluding primary residence, over about $150k for an individual (iirc $250k for a couple) starts cutting into your pension at 50c per 'deemed' dollar earned. This is based on 'deeming' at 4.25% of assets which is temporarily halved during the pandemic.

All of your uk pension adds to this deemed income, cuttiing a further 50c for each $ of the uk pension.

The income and assets tests are confusing, but I worked it out in the end. They asses your assets, then you're income based on those assets and any other income (not super income, that is counted as an asset only). Given the results of these two tests, they reduce your pension by choosing the one that makes a maximum reduction. It's a bit rough, tbh. The situation I've described is the income test. The asset test would only apply for quite large assets.

The really, really stupid thing is, you can get at your super from 60 if retired or semi-retired (some a bit earlier if nearing pension age now cuttoff birthday is 1st July 1964). That means you can spend as much as you like from 60 to 67, reducing your super to 150k, and get the maximum pension, assuming no other income. That was a stupid decision made by stupid bureaucrats, but some may want to take advantage. Many are.
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Old Feb 4th 2021, 2:16 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by Zig Zag Wanderer View Post
Agree with the class 2 contributions being a great deal. Class 3 probably not so much. Freezing the pension rate is an awful con, but it can be reset by returning to the UK temporarily.

Things to consider regarding oz age pension and asset/income tests that most people don't seem to know and are hard to find out:

Any assets, including super but excluding primary residence, over about $150k for an individual (iirc $250k for a couple) starts cutting into your pension at 50c per 'deemed' dollar earned. This is based on 'deeming' at 4.25% of assets which is temporarily halved during the pandemic.

All of your uk pension adds to this deemed income, cuttiing a further 50c for each $ of the uk pension.

The income and assets tests are confusing, but I worked it out in the end. They asses your assets, then you're income based on those assets and any other income (not super income, that is counted as an asset only). Given the results of these two tests, they reduce your pension by choosing the one that makes a maximum reduction. It's a bit rough, tbh. The situation I've described is the income test. The asset test would only apply for quite large assets.

The really, really stupid thing is, you can get at your super from 60 if retired or semi-retired (some a bit earlier if nearing pension age now cuttoff birthday is 1st July 1964). That means you can spend as much as you like from 60 to 67, reducing your super to 150k, and get the maximum pension, assuming no other income. That was a stupid decision made by stupid bureaucrats, but some may want to take advantage. Many are.
Ahh your talking in GBP with your figures. I've been studying the assets and income test full-on for at least 3 years now. I have a very good understanding of it. The figures are (for couples) under 401,000 AUD in assets beyond the family home and you receive the full Australian pension of circa 1438 AUD for a couple per fortnight. These figures slide down to the cut off point of 868,000AUD for a couple. You are allowed to earn (and this is where the UK pension comes in as it is counted as income in Australia) 370AUD per fortnight per couple, so even if that UK pension is paid entirely in my name, it's still counted as couples income as far as the Australian assets test is concerned.

The big thing that UK expats are missing as they seem to throw their hands up in the air as it's all too hard. Is that very special pension card. That is a real asset. So the clever thing to do is keep ones liquid assets as close to the cut off point as possible and get that pension card. It's supposedly worth at least 4,000 AUD per annum in discounts. Energy/car rego/pharmacy and other rebates. For instance Pensioners received a cash payment during this COVID outbreak here. You wouldn't qualify for that without that card. Plus if ones assets do fall below that 868,000AUD (which increases every year with the cpi) then at that point you need to apply for the Australian Pension.

It is complicated, it is a bloody nightmare dealing with centerlink, but most importantly it is worth it.

Especially with that bottom line "Frozen" UK pension.

One last point your right about spending that super before ones full retirement age.... Hence my wife is going to retire 3 years before her 67 birthday in August and we are about to live it up big time. We have the buffer of a inner city property to downsize from. It's going to be hard to restrain ourselves. Although Covid is doing quite a good job of putting the brakes on. BTW that figure of 150K your quoting should be 224K in GBP as that is the 401,000 AUD assets figure for a couple currently from under which you can receive a full Australian Pension.





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Old Apr 1st 2021, 2:20 am
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Default Re: Topping up your National Insurance Contributions

Means tests threshold have renewed their yearly increases for the Aus Government pension.

A couple can now earn up to 98,500 dollars per annum and receive a part Australian pension (Pension Card)
A Home owning couple can also receive a full pension with 616,000 AUD worth of assets including the family home. The cut of point for assets on top of the family home is now 1,095,000 AUD.... (Pension card)

Not too sure how many people would fit above those categories. Not many I would wager, especially if they've taken the sensible option of upsizing their main residence to come in under the quite generous thresholds.

I think UK people are falling into the trap of having their super and other assets converted into an income stream and thus negating themselves from the AUS pension, where they could be using anything excess above those figures to upsize their main residence, then using some of their lump sum assets for trips and other luxuries, then downsizing and taking advantage of the pension reduced stamp duty once one reaches the official retirement age.


More detail here.

https://startsat60.com/media/money/a...um=email&uuid=


Re the NI contributions still waiting to hear about class 2 or not. Been months now since I/we applied, might have to recontact them


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Old May 6th 2021, 5:39 am
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Default Re: Topping up your National Insurance Contributions

Running through the figures, etc if an Australia-resident couple have the full (maximum) UK pension entitlements, then they are eligible for no Australian based benefits - not even a pension card. On the bright side, it means they won't feel any pressure to burn through their super to means test their way for the full state pension. But if a person has overseas occupational pensions too it will likely take them over the threshold for taxable income.
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Old May 10th 2021, 10:18 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
Running through the figures, etc if an Australia-resident couple have the full (maximum) UK pension entitlements, then they are eligible for no Australian based benefits - not even a pension card. On the bright side, it means they won't feel any pressure to burn through their super to means test their way for the full state pension. But if a person has overseas occupational pensions too it will likely take them over the threshold for taxable income.
Actually running through it again, I believe I was incorrect.

It seems that if a married couple living in Australia on full UK state pension and nothing else as an income (UKP176 * 2 per week = AU$1260 per fortnight), the Aussie pension income test translates thus:

$316 threshold before reducing any pension at all, then with what remains, they take 50c off the Aussie pension entitlement (which is currently set at $1436.20 per fortnight) for every $, which equals $944 * $0.50 which equals $472 and subtract that from $1436 leaving $964 Aussie pension entitlement. So add that to the UK pension (AU$1260) and we have $2224 per fortnight per couple, which is equal to $57824 per year in combined UK and AU pension.

Sure, that is excluding the assets test but if you own your home and have less than approx $557k in assets at age 67 then the above test takes precedence over what you'll receive.

Okay, my income will wipe out 100% of the Aussie entitlement but if the UK state pension is all that you and your spouse have....
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Old May 12th 2021, 5:25 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
Actually running through it again, I believe I was incorrect.

It seems that if a married couple living in Australia on full UK state pension and nothing else as an income (UKP176 * 2 per week = AU$1260 per fortnight), the Aussie pension income test translates thus:

$316 threshold before reducing any pension at all, then with what remains, they take 50c off the Aussie pension entitlement (which is currently set at $1436.20 per fortnight) for every $, which equals $944 * $0.50 which equals $472 and subtract that from $1436 leaving $964 Aussie pension entitlement. So add that to the UK pension (AU$1260) and we have $2224 per fortnight per couple, which is equal to $57824 per year in combined UK and AU pension.

Sure, that is excluding the assets test but if you own your home and have less than approx $557k in assets at age 67 then the above test takes precedence over what you'll receive.

Okay, my income will wipe out 100% of the Aussie entitlement but if the UK state pension is all that you and your spouse have....
Hmm thats got me thinking ( which is dangerous) but both myself and my better half are 60 and 59 respectively and have around $500,000 in super. We still have around $250,000 on mortgage due to a business loss. We both quallify for full UK pension and Australian pension. So my thoughts are how can i utilise the info quoted above to retire or semi retire and hit the road earlier than planned, we also would be looking to downsize eventually. 🤔🤔
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