International Social Security Agreements

Australia currently has 18 bilateral international social security agreements. Israel is not included in that list.
As of August 2005 there were 51,442 Centrelink customers residing overseas permanently who were receiving the Australian Age Pension. The majority of these customers (79%) reside in European countries. A further 8,409 customers were receiving the Disability Support Pension, 792 customers were receiving Widow B Pension and 1,627 customers were receiving Wife Pension.
There is no uniformity to Australia’s bilateral international social security agreements and different benefits are covered depending on the countries involved.
The Southern Cross Group, an advocacy group for expat Australians, claims that these bilateral social security agreements make it easier for Australians who live overseas and contribute to the social security system in their host country, to claim benefits, in particular age pension benefits, in either Australia or the host country later on.
Here is a list of the sort of benefits that Australian pensioners can be getting contributions for, from separate governments, if covered by one of these international agreements:
• retirement;
• disability;
• widowhood; or
• survivorship.
It also includes:
• payments to a partner or carer; and company pensions and superannuation payments that are regulated through a country's national social security system.
Maybe you’ve been living in Israel since your 20’s or maybe you’ve retired here, so whether you’d be basically eligible for Australian social security is an individual issue. Either way the key words in the Australian social security system are residence and financial circumstances.
The Australian government sees bilateral social security agreements as based on the concept of shared responsibility. Partner countries under each agreement make concessions against their social security qualification rules so that people covered by the agreement may access payments for which they might otherwise fail to qualify. According to The FaCSIA*site these agreements are bilateral treaties which close gaps in social security coverage for people who migrate between countries. They do this by overcoming barriers to pension payment in the domestic legislation, such as requirements on:
• citizenship
• minimum contributions record
• past residence record
• current country of residence
There is a fundamental difference between the Australian income support system and the contributory systems found in other developed countries. The rate of social security benefits paid in Australia depends on need (assessed through income and assets tests) and not on the length of contribution. Australia's income support system is residence based and is funded from general revenue. Generally, social security payments are only available to Australian residents who, when assessed against means tests, qualify for income support. There are minimum residence requirements for some payments. But its possible that if there was a bilateral agreement between Israel and Australia, mutually recognising rights accrued in the partner country, and if you’d spent a couple of decades in Australia sometime in your life, that you’d be considered an eligible Australian resident and entitled to some form of Australian social security. Try working it out from the FaCSIA site.
'Portability' refers to the continuation of Australian income support payments during a recipient's overseas absence. Portability policy acknowledges that travel is an integral part of modern living. The bilateral agreements extend the eligibility conditions for people who are unable to receive pensions from either Australia or the agreement countries because they cannot meet the minimum residence requirements or contribution conditions. Under these agreements, Australia equates social insurance periods/residence in those countries with periods of Australian residence in order to meet the minimum qualifying periods for Australian pensions. The other countries generally count periods of Australian working life residence as periods of social insurance in order to meet their minimum qualifying periods for payment. Also, some countries will only pay their pensions overseas into countries where there is an agreement that provides for this. Usually, each country will pay a part pension to a person who has lived in both countries.
As of July 2005, 351,000 Australian age pensioners were also receiving a foreign pension; out of those 46,424 resided outside Australia. From the Australian government point of view A Comparable Foreign Payment (CFP) is any payment from a foreign country that is paid periodically to an Australian pensioner to provide income. The FaCSIA claims that in an overwhelming number of cases, the combination of the Australian pension and the CFP increases the person's overall level of disposable income. This constitutes a 'win-win' situation for Australian pensioners and taxpayers alike.
The FaCSIA claims that the policy underlying the portability of Australian pensions reflects international practice. Most contributory systems, particularly those operating in the member states of the European Union, have for many years encouraged portability of their benefits. They acknowledge that the individual's acquired right to benefits is derived from financial contributions and that the modern, global economy requires unhindered movement of people, finances and services. Portability of benefits as well as the possibility of accruing rights in one country and being paid in another country constitutes an important part of this new philosophy in the globalised world. Nevertheless, some countries still restrict portability of their social security payments to countries with which they have international social security agreements or reciprocal portability arrangements.
It’s not only Centrelink customers who stand to benefit from bilateral social security agreements, its also multinational employers. Amongst the countries that Australia has bilateral International Social Security agreements with is the USA. Social security payments hardly seems to be the sort of thing your typical off shore Aussie in the US is in need of.
So why is it in the interest of these two governments to enter into such a treaty? The US Social Security Administration site explains that theses agreements, often called "Totalisation agreements," have two main purposes. First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. Dual Social Security tax liability is a widespread problem for U.S. multinational companies and their employees. Secondly, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country.
The aim of all U.S. totalisation agreements is to eliminate dual Social Security coverage and taxation while maintaining the coverage of as many workers as possible under the system of the country where they are likely to have the greatest attachment, both while working and after retirement.
You see these agreements are in the interest of big business too.
By the way Israel has social security agreements with Belgium, Holland, Germany and Finland and is at least negotiating totalisation agreements with the USA and Canada. That’s not necessarily an accurate up to date list.
Since its formation, the Southern Cross Group has been pushing for Australia to enter into more bilateral social security agreements with countries where none exist. In their Bilateral Agreements Overviewthey claim:
“If you are making contributions to a state pension scheme in a country with which Australia does not have a bilateral agreement, and with which Australia has not yet started negotiations for such an agreement, we strongly encourage you to send an e-mail to the Australian Minister for Family and Community Services, pointing out this fact and urging the government to extend its network of agreements. It is only by making decision-makers in Canberra aware of the impact of the deficit in the current bilateral coverage that we can hope to see Australia enter into negotiations for further agreements. By working for more bilateral agreements today, we can help make sure that people retiring in ten, twenty or thirty years from now are not financially disadvantaged in the future.”
(*the Australian government’s Department of Families, Community Services and Indigenous Affairs)