What is the average pension in Australia in 2021

The Australian pension system is one of the most advanced pension systems in the world. It is significantly different from the Russian one. For example, on the Green Continent, older people, whose earnings during their active working years were smaller, receive more state support. Also, pensions in Australia are based on wealth. At the same time, problems associated with the aging of the nation are beginning to appear in the country.

Who is entitled to pension benefits

People who have lived and worked in Australia for at least 10 years can apply for a pension. True, after reaching a certain age, which for immigrants from Russia may become a kind of surprise. Thus, retirement in Australia in 2021 is allowed for men and women at 66 years of age.

Read about the process of adaptation of emigrants from Russia to life in another country, about the activities of the Russian diaspora and other issues related to the arrangement of everyday life and the professional component in the article “Life of Russian emigrants in Australia.”

It is believed that a person retains working capacity until this age. Given the high quality of life and medicine in Australia, this approach is completely justified.

In addition, local residents facing financial difficulties under various circumstances can count on assistance from the state.

The level of wages, social security for residents of the state, the level of development of medicine, the education system, climatic conditions - these and other topics are raised in the article “Australia: the life of ordinary people.”

Income Requirements

In addition to age requirements, a citizen must also meet residency requirements, namely:

• Be a resident of Australia and be physically present in the country on the day of application
• Live in Australia for at least 10 years
• And have at least 1 period of continuous residence in the country for 5 years.

There are exceptions to this rule if the applicant is a refugee or receiving widow's benefits.

To receive a state pension, a future pensioner also needs to prove that he receives insufficient income. In other words, if a citizen at retirement age earns sufficient income, he is not entitled to receive an old-age pension. For 2019, this income per person is $2,024.40.

Structure of the Australian pension system

People who have worked in Australia for at least 10 years and have reached the age of 66 should be aware that the country's pension system includes two components: public and private.

• State pension. The source of funding is the state budget. It is not necessary to work to receive such a pension after a certain age. It is enough to step over the age limit. The size of your salary does not affect the amount of the state pension. But this takes into account income and real estate ownership. The following requirements apply to indigenous residents and immigrants: Australian citizenship. Duration of residence on the Green Continent is from 10 years.
• A pension in Australia for foreigners is granted only if they live in the country upon reaching retirement age.
• The bank account must contain an amount not exceeding 50,000 AUD (Australian dollars).
• The area of ​​the land plot (if it is owned) is no more than 2 hectares.
• The property must be valued at a maximum of AUD 160,000.

For pensioners who do not meet these requirements, financial state assistance may be reduced or denied altogether. The authorities explain this approach as follows: if a family has the opportunity to purchase expensive items or real estate, it can receive income from their use.

• Private pension. Based on the method of formation, it is also called cumulative. According to current legislation, employers contribute 9% of an employee’s salary to a private pension fund (PF) if he has crossed the age limit of 18 years and works more than 30 hours a week. Recently, the country's government announced plans to increase contributions to 12% by 2021.

The right to choose a pension fund (there are a great many of them on the Green Continent) is given to the employee himself. These organizations differ in the percentage charged on the transferred amounts for service, as well as in the size of the entrance fee.

You can change the fund at any time. Thanks to electronic technologies, this is done very simply: a special Relover Form is filled out on the website of the selected institution.

After choosing a fund, the employee has 2 action strategies:

• invest the transferred funds;
• leave money for storage at a fixed interest rate.

Investments can be made in real estate and shares of prosperous Australian or foreign companies. If the investment is successful, the pension fund will return the interest, resulting in an increase in pension.

You can withdraw money from a private pension fund after your sixtieth birthday. The accumulated amount is not subject to tax.

Pensioners decide for themselves what to do with the funds - add them to state financial assistance or buy a cottage on the seashore.

Features of the Australian pension system

There are a number of certain purely Australian aspects of receiving a pension that you need to know if you are going to receive a pension in this country.

So, there is a rule in the Australian pension system that means that the more income a person has, the less his state pension will be.

It is important to know! In Australia, private pensions are also included in the income list.

Thus, a married couple can expect to receive a full pension if their joint income is less than 230 Australian dollars, and a single pensioner will receive full pension payments with an income of less than 130 Australian dollars.

Attention! A pensioner risks depriving himself of government benefits while having additional income.

That is why in Australia, people of retirement age try to regulate their income and keep it below the threshold set by the state.

If we talk about the most profitable type of accumulation of pension funds, then today private pension funds , which the state responsibly controls, are in demand. Payers will have access to the money upon reaching retirement age.

Retirement age in Australia

Due to the aging of the nation in 2021, the Australian Government has expressed its intention to increase the retirement age to 70 years. However, in 2021 this idea was abandoned.

Nevertheless, a law was passed according to which the age limit for retirement will be raised to 67 years by mid-2021. The provisions of this regulation apply only to people born after July 1952.

More detailed information is presented in the table:

But in Australia there are also opponents of such half-measures. They said that the decision to abandon retirement at age 70 would cost the state budget AUD 5 billion.

In the third quarter of 2021, life expectancy on the Green Continent is 84 years. According to forecasts, every fifth resident of the country will be over 65 years of age by 2045, which will lead to a manifold increase in the volume of pension payments.

Types of pensions in Australia

It is worth noting that the Australian pension system is built on two types of pensions - public and private . The first type is financed by the state budget and is paid to an Australian citizen or a person from another country who has reached the age of 65.

To receive a pension from the state in Australia, citizens of the Green Continent need to live in Australia for more than ten years . Immigrants must be in the country at the time they reach the pension threshold.

In addition, it is necessary :

• no more than 50 thousand Australian dollars in your personal bank account
• have a land area of ​​no more than 2 hectares .
• The value of the entire property must be AUD 160,000

If some facts are hushed up or do not add up, then the size of the pension may be reduced, or the state authorities will not approve it at all.

It is important to know! In Australia, it is believed that, having expensive real estate, a person can receive income from its use and does not need a pension.

The main goal of the state type of Australian pension is to provide the country's elderly residents with a decent standard of living.

Another type of pension in Australia is a private pension . It is formed by transferring funds to a private fund, which is carefully controlled by the state.

Private funds operate as an investment structure, providing clients with a choice of one of the proposed methods of investing finances. to accumulate a pension while living and working in Australia by regularly contributing funds to an open account.

It is important to know! In Australia, the employee and the business each pay 9% into the fund.

Another type of pension accumulation, which is unique today and operates exclusively in Australia, is the opening of their own fund by future retirees. Such a fund is subject to much lower taxes.

About the amount of pension payments

Let’s start our conversation about what kind of pension is in Australia by indicating the minimum numbers:

• a single person receives approximately 500 AUD per month;
• the minimum total pension per elderly married couple is 900 AUD.

As for the maximum payments, a single pensioner receives 1,590 AUD per month, and an elderly married person receives 1,200 AUD.

You also need to know what the average pension in Australia is in 2021:

• a single pensioner receives 18,070 AUD per year;
• each spouse of an elderly couple – 13,624 AUD.

When a pensioner continues to work, the size of his salary is taken into account when calculating the pension. If it exceeds AUD 43,000 per year, the pension is not calculated at all.

By the way, if you convert into Russian currency, then the figures in rubles will turn out to be realistic for the Russian labor market: 1,875,690 rubles per year or 156,307 rubles per month. This is the guaranteed salary of a highly qualified programmer in Moscow.

An Australian resident, upon retirement, can count on the following pension supplements:

• Remote Area Allowance (allowance for remote regions). These funds are intended to compensate residents of remote regions for higher communication and transport costs. The size of a two-week benefit of this type: for a single pensioner – equal to 18.2 AUD;
• for each spouse in a couple – 15.6 AUD.

Amount of additional payments:

• a single pensioner is entitled to 60.2 AUD every 2 weeks;
• for a married couple in total – 90.8 AUD.

Currently, the minimum component of the supplement is transferred to the pensioner’s bank account not once every 2 weeks, but quarterly.

How to get extra income

One real opportunity to improve the future financial situation of Australian seniors is to receive additional income through the Super co-contribution scheme. It provides for an increase in the funded part of the pension during the period of active work.

For each voluntary contribution made by an employee to the pension fund, the state adds a certain amount to his account. Its amount depends on the level of income and the size of the additional payment.

To get an idea of ​​how much will be added in 2021, check out the data presented in the table.

For income equal to or greater than AUD 53,564, no additional amount is transferred to the employee's account. Residents of Australia under the age of 71 can take part in the Super co-contribution program.

Another option to increase your future retirement benefit is to create your own pension fund. Entrepreneurs can do this. With the right approach to investing, funds of this type can bring significant income.

The state encourages such activities of entrepreneurs by reducing their tax rate on profits received by 2 times.

Find out about income, property and salary taxes in Australia.

Benefits and allowances

Pensioners, in addition to the actual financial state assistance, receive a discount on a considerable number of services. Of course, for a proper vacation, for example, in the same boarding house, they will have to pay, but to get there by public transport, they will be able to buy a ticket at a reduced rate.

In addition, pensioners who receive some other income pay less taxes.

The purchase of pharmaceutical products deserves a separate discussion. Most pensioners are issued cards for the purchase of medicines: Commonwealth Seniors Health Card or Health Care Card. The bearer of such a document can buy the drug at the minimum price. Moreover, the real cost of the medicine does not play any role: it costs 50 or 15 AUD, the card holder will pay about 4 AUD in any case.

In addition, for elderly people who do not have their own home, the state partially compensates for rental costs. The amount of such assistance for a single pensioner or for a family couple is 3,000 AUD/year.

In Australia, it is possible to receive pensions that are not age-related.

The state will always come to the aid of parents who are raising young children. According to the law, a woman who divorces and is left with a small child in her arms will be paid approximately AUD 16,500 per year until the baby turns 8 years old.

The pension that a mother receives for her children is calculated individually, taking into account her income. The minimum volume is 5,179 AUD/year, and the maximum is 47,330AUD.

Single parents, in addition to money, have the opportunity to receive housing from the state. They still need to pay rent, but it is small.

Married couples with a small income and raising children can also count on a pension. However, receiving funds is not easy: applicants for such benefits must meet a number of requirements and fulfill certain conditions.

Unemployment benefits are paid to people who have lost their permanent job and are not receiving a pension, even if they have lived in Australia for less than 10 years.

How do Australian retirees live?

Life is good for Australian retirees. That is why more and more citizens from various countries of the world, mainly from the post-Soviet space, are moving to Australia for permanent residence.

It is also significant that in addition to a very impressive state pension, the country’s government also offers an extensive list of social benefits, including:

• free medical care;
• subsidies for the purchase of medicines;
• discounts on public transport;
• Once a year you can take advantage of the opportunity to get a free intercity flight ticket and travel to another state.

It sounds tempting, especially since this is only a small list of privileges known outside the country. Citizens who permanently reside there are more aware of social guarantees and willingly use them all.

How is a pension issued to a foreigner?

Residents of the country, as well as immigrants, can receive a pension in Australia. The latter are subject to the following requirements:

• availability of a permanent visa;
• Duration of residence in the country is at least 10 years. The total time is taken into account, but the duration of one of the periods must be at least 5 years.

Issues related to the assignment of pensions, including for immigrants, are dealt with by an agency similar to the Russian Department of Social Protection.

To apply for a pension to this organization you must provide:

• A document capable of proving identity.
• Tax number. Those foreigners who do not have one need to take a special form from Centrelink, fill it out and send it to the tax office at their place of residence. In a few days the TFN tax number will be ready.
• A document confirming 10 years of residence in Australia. This can be done by a certificate from a local employer.

The pension will be issued if there are no comments on the submitted documents.