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Topping up your National Insurance Contributions

Topping up your National Insurance Contributions

Old May 12th 2021, 5:53 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by robo43 View Post
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. 🤔🤔
I'd say the first thing to do is to check that what I have said above is in fact correct. I truly believe it is but it would be great to have one or two expats on here to confirm it is correct - preferably someone who currently fits the bill in the scenario that I have described. If it is correct, and with your circumstances, then I can see a pathway for you to retire in the next year or two. But please don't do anything without first seeking professional advice - to double check that there are no future downsides or gotchas. I reckon its easy enough to retire but very hard to return to the workforce as an older person if you subsequently find that the sums don't add up for your required standard of living and financial commitments.
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Old May 12th 2021, 6:18 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
I'd say the first thing to do is to check that what I have said above is in fact correct. I truly believe it is but it would be great to have one or two expats on here to confirm it is correct - preferably someone who currently fits the bill in the scenario that I have described. If it is correct, and with your circumstances, then I can see a pathway for you to retire in the next year or two. But please don't do anything without first seeking professional advice - to double check that there are no future downsides or gotchas. I reckon its easy enough to retire but very hard to return to the workforce as an older person if you subsequently find that the sums don't add up for your required standard of living and financial commitments.
Thanks Paulry, no obviously i wont, it was just that i had resigned myself to another 5 years in full time work, whereas now i have a few questions to ask my financial adviser when i next see him later in the year.
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Old May 12th 2021, 9:34 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by robo43 View Post
Thanks Paulry, no obviously i wont, it was just that i had resigned myself to another 5 years in full time work, whereas now i have a few questions to ask my financial adviser when i next see him later in the year.
I was quite surprised myself to find the provision is so generous, I kind of just assumed that the system on learning that you get pension from elsewhere would offset your entitlement dollar for dollar and with other incomes on top of that it would result in zero Aussie pension entitlement.

I'm in the same age ballpark as you, and am finding that the sums for me also point towards retiring half a dozen years or so before state pension age, living off the assets and income that we've painstakingly built up, until half a dozen or so years after pension age and then after that settling down to a fairly comfortable existence funded by our state and occupational pensions. We're still aiming for phased in and self funded early retirement but that extra bit of knowledge means we don't need to be mean with ourselves if we don't want to and we'll still be comfortable no matter what we decide.

Good luck. I hope it all works out well for you
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Old May 16th 2021, 3:35 am
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Default Re: Topping up your National Insurance Contributions

This is a good resource for those in Australia wanting to find out what their AU pension entitlements are.

Payment and Service Finder: https://www.centrelink.gov.au/custsi...ale=en_US#stay

Edit: Another good one for calculating pension: https://www.superguide.com.au/in-ret...ion-calculator


Last edited by paulry; May 16th 2021 at 3:55 am.
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Old May 22nd 2021, 12:40 pm
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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....

This is what UK people cannot get their head around. It pays long term to keep ones assets as a lump sum if invested in Australian Superannuation, rather than an income stream, In fact if one is close to the 880K asset cut of limit they should consider upsizing rather than downsizing so as to utilise the Family home being exempt from the assets test. One can then use that remaining ump sum in super as they wish down to a level they are comfortable with. Then Downsize and replenish their super with the 300K each they are allowed under current legislation from the sale of their house.

It's a big trap converting ones Australian super into an income stream.

I can't believe people aren't doing it.

See an Aus Financial advisor is the best advice.


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Old May 23rd 2021, 5:48 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by ozzieeagle View Post
This is what UK people cannot get their head around. It pays long term to keep ones assets as a lump sum if invested in Australian Superannuation, rather than an income stream, In fact if one is close to the 880K asset cut of limit they should consider upsizing rather than downsizing so as to utilise the Family home being exempt from the assets test. One can then use that remaining ump sum in super as they wish down to a level they are comfortable with. Then Downsize and replenish their super with the 300K each they are allowed under current legislation from the sale of their house.

It's a big trap converting ones Australian super into an income stream.

I can't believe people aren't doing it.

See an Aus Financial advisor is the best advice.
Thanks mate, good to see you back here. Just one question: The UK state pension: In the pension means test, does Centrelink treat that as just another income alongside any others that you might have?

I completely get the upsizing and subsequent downsizing approach that you've referred to. I think though I would be inclined to renovate rather than upsize to save myself on the upsizing stamp duty, estate agents and legal fees - plus the hassle and grief of having to move as a retired person. But that of course depends on what value adds can be made to your house in your area. It definitely makes a lot of sense to get financial advice and do heaps of research and analysis before embarking on any investment strategies to ensure the most comfortable retirement possible.
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Old May 24th 2021, 11:44 pm
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
Thanks mate, good to see you back here. Just one question: The UK state pension: In the pension means test, does Centrelink treat that as just another income alongside any others that you might have?

I completely get the upsizing and subsequent downsizing approach that you've referred to. I think though I would be inclined to renovate rather than upsize to save myself on the upsizing stamp duty, estate agents and legal fees - plus the hassle and grief of having to move as a retired person. But that of course depends on what value adds can be made to your house in your area. It definitely makes a lot of sense to get financial advice and do heaps of research and analysis before embarking on any investment strategies to ensure the most comfortable retirement possible.
Good idea renovating/capitalising. You have to be sure that you don't overdo it though and end up over capitalising.


Yes, your pension does count as income. I've actually fallen foul of that trap right now as my wife's income combined with my UK Pension takes us over the limit. However she retires in July, so we'll be ok from that point. I just want the card more than anything. That way you're in the system and have access to the many lump sum payments and other perks the Aus government affords pensioners.



Different states handle stamp duty individually. There are major stamp duty benefits for people on the Aus Pension, wherein some states there is a much-reduced stamp duty or in some cases zero stamp duty for pensioners buying a home in a one off situation. which means if you were to buy as a couple and put the house in separate names, you can get two bites at the stamp duty relief cherry.... upsizing and then downsizing. Just means one name on the title. It would mean a bit of juggling with the super and spending more as a lump sum of off one couples compared to the other.

Must repeat anyone reading get "Australian" financial advisors on board for these detailed pension matters.


The way I see it, is you have free reign to spend 600K Aud (328K GBP) on yourself on luxuries and holidays, etc before you settle down to your final home. That comes out of a combination of your current family home and your Aus super.... Courtesy of the Australian Pension System. That's what people need to see their Aus Financial advisors about.

There actually a new beneficial complication that's been added to the mix in the last budget. Thats the Pension Loans Scheme, which means you can take 36K per annum lump sum on top of your Aus Pension.... Hence the need to see Financial advisors.


To reiterate, you can be doing yourself out of a lot of future income by transferring your UK pension pots etc into income streams here in Australia, rather than using that pension pot as a lump sum to buy a bigger house (if indeed that is possible?). It is complicated and the two systems definitely clash. Hence it needs a lot of studying and understanding.



Last edited by ozzieeagle; May 25th 2021 at 12:04 am.
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Old May 25th 2021, 4:06 pm
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Default Re: Topping up your National Insurance Contributions

Originally Posted by ozzieeagle View Post
Good idea renovating/capitalising. You have to be sure that you don't overdo it though and end up over capitalising.

Yes, your pension does count as income. I've actually fallen foul of that trap right now as my wife's income combined with my UK Pension takes us over the limit. However she retires in July, so we'll be ok from that point. I just want the card more than anything. That way you're in the system and have access to the many lump sum payments and other perks the Aus government affords pensioners.

Different states handle stamp duty individually. There are major stamp duty benefits for people on the Aus Pension, wherein some states there is a much-reduced stamp duty or in some cases zero stamp duty for pensioners buying a home in a one off situation. which means if you were to buy as a couple and put the house in separate names, you can get two bites at the stamp duty relief cherry.... upsizing and then downsizing. Just means one name on the title. It would mean a bit of juggling with the super and spending more as a lump sum of off one couples compared to the other.

Must repeat anyone reading get "Australian" financial advisors on board for these detailed pension matters.

The way I see it, is you have free reign to spend 600K Aud (328K GBP) on yourself on luxuries and holidays, etc before you settle down to your final home. That comes out of a combination of your current family home and your Aus super.... Courtesy of the Australian Pension System. That's what people need to see their Aus Financial advisors about.

There actually a new beneficial complication that's been added to the mix in the last budget. Thats the Pension Loans Scheme, which means you can take 36K per annum lump sum on top of your Aus Pension.... Hence the need to see Financial advisors.

To reiterate, you can be doing yourself out of a lot of future income by transferring your UK pension pots etc into income streams here in Australia, rather than using that pension pot as a lump sum to buy a bigger house (if indeed that is possible?). It is complicated and the two systems definitely clash. Hence it needs a lot of studying and understanding.
Yep, I'll definitely get advice because while I generally know quite a lot on the subject there are also some gaps. For example the bit you mentioned above regarding husband and wife combined income. I'm not completely clear about that. I'd previously read somewhere that our spouse's income and pension entitlements are assessed entirely separately to our own, ie if I am at pension age and my wife is still working, her income would have no impact on my pension entitlement calculation, but that appears to be incorrect.

I'm in the same boat as you regarding the card. There seems to be a lot of savings that can be had with that.
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Old May 30th 2021, 1:29 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by paulry View Post
Yep, I'll definitely get advice because while I generally know quite a lot on the subject there are also some gaps. For example the bit you mentioned above regarding husband and wife combined income. I'm not completely clear about that. I'd previously read somewhere that our spouse's income and pension entitlements are assessed entirely separately to our own, ie if I am at pension age and my wife is still working, her income would have no impact on my pension entitlement calculation, but that appears to be incorrect.

I'm in the same boat as you regarding the card. There seems to be a lot of savings that can be had with that.

It's all in the following link Paulry.

Age Pension - Income test for pensions - Services Australia

One other factor that needs to be taken seriously is deeming on one's assets. Basically, your assets are subject to deeming which means the sum total of both of your assets is subject to 5pct being counted as assessable income. Currently, it's 2.5 pct during Covid. Generally, it's 5pct. This means if you are at the upper end of the cut-off point of circa 890K then your pension would be cut to around 374 dollars per fortnight each, as you would be deemed to have earnt 44,000 AUD over the year (1690 per fortnight) on that 890K balance.

The other big thing that UK people miss is the fact that one's partners superannuation is not counted as asseable until they reach retirement age. This means you can plan your life so the younger partner holds the majority of the assets so as to gain the pension for oneself.

Right now I've just missed out on the Aus Pension because I failed to consider my wife's salary sacrifice component of her wage. That will change as she will leave work permanently in July and most of her assets will be in Super. She is 32 months younger than me.

The final point needs to be illustrated. When one is married one gets a couples portion payment of the Pension even if the other partner is younger. Which is circa 150 AUD per fortnight less than the maximum rate.

There are people out there that have upsized to the tune of 4 Million dollars just to get that Pension Card.
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Old Jul 13th 2021, 2:24 am
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Default Re: Topping up your National Insurance Contributions

Originally Posted by keel View Post
I checked my National Insurance contributions lately and found out, to my surprise, that I had 21 years of contributions (£94.86 per week) . I was surprised because I opted out in about 1988. However I was in the Territorial Army for 18 years and they paid my stamp every month. What a result, well worth the mild arthritis after so many sodden night on Otterburn moors. My wife also qualifies for 19 years.

We going through an agent to sort out our extra contributions. We emigrated in 2003 and I have work almost continuously over that time so I should qualify for part 2 contributions (£158.60 per year) . My wife was looking after the children and only returned to work 3 years ago so most of her years will be at Class 3 (£795.60 per year).

At the moment I'm not sure if we will pay all her missing years. We'll have to crunch the numbers in a month or 2 when we find out the cost.

This pension thing is all new to us and seems quite confusing. Can anyone help with my queries below?

If we both qualify for the full contributions pension of £168.80 ( $295) per week do we get £168.80 x 2 = £337.6 ($593) per week or is it less because we are a couple?

I believe we we will qualify for an Australian Pension as well.

I've now paid 14 years national insurance stamp for my self and 5 years for my wife. Mine was a mixture of part 2 and 3 contributions, the wifes was all class 2 which all up cost us about £4000 .. This will give us an extra £95 a week or £4940 a year. So well worth the effort. I have 1 more year to pay and my wife about 11 years then we should both qualify for full UK state pensions of £179 each or $333 each per week.
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