The Australian and Indian governments have enacted a new package of laws to allow expats from each country to receive the state pension of their home country without having to return home.
As a result, Australian retirees living in India will be able to claim Australia’s so-called ‘age pension’, which is worth a maximum of AU$22,500 (£10,932) a year for a single person over the age of 65, according to an Australian Government statement.
Indian expats in Australia will also have unrestricted access to their Indian pension schemes.
The deal will also affect compulsory superannuation and pension rules in the two countries. An Indian company operating in Australia will not need to make superannuation contributions – which are compulsory for all Australian employers – if they are already making pension contributions back in India. The same goes for Australian companies operating in India, the Government statement said.
Australian Assistant Treasurer Kelly O’Dwyer said the deal “is expected to save Australian businesses operating in India about AU$10m per year, and put Australian businesses on an equal footing with their competitors from other countries that already have similar agreements with India.”
The deal will affect many more Indian expats than Australians. The Australian government says there are 397,000 Indian-born people currently living in Australia.
This dwarfs the number of Australians in India. In 2010 the Australian High Commission estimated there were between 3,000 and 4,000 Aussies living on the subcontinent.
Australia now has 30 such international social security agreements, with Austria, Belgium, Canada, Chile, Croatia, Cyprus, the Czech Republic, Denmark, Finland, the former Yugoslav Republic of Macedonia, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Latvia, Malta, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Switzerland and the USA.
The United Kingdom is notably absent from the list.