Australians planning to retire to France warned over little-known pension trap
For many people retiring to France is a lifelong dream, but for anyone in Australia thinking of making the move, there is a little-known fact about pensions that could put a dampener on their plans.
There are around 4,000 - 5,000 Aussies living in France but despite this Australians who are nearing the age when they are able to claim their Australian state pension face a major dilemma that could leave them significantly worse off.
The problem lies in the fact that the Australian and French authorities do not yet have an international social security agreement.
That means that if an Australian has been living in France for several years when they become eligible for their pensions, they are not able to claim it.
So, while you can be an Australian living in Austria, Belgium, Chile, Croatia, the Czech Republic, Spain or Estonia, among others, and still claim your Australian pension, this is not the case in France.
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Photo: AFP
This leaves many Australian citizens who have made lives in France - as well as French people in Australia - faced with a choice of leaving a country they have made their home in order to claim the pension they earned over several years, if not decades.
In order to claim an Australian pension at the moment, people are faced with no choice but to head back to Australia and wait for two years before applying for the pension - at which which point they can return to France and still receive their pension.
And those who wait until after they have secured their Australian pension before moving to France are also in the clear. The lack of agreement only affects those who become eligible for their pension when they are already living in France.
An added problem is that many Australians are unaware of the situation until they get here.
Judy Crozier, an Australian writer who "sold up everything" to buy a house and live in France, told The Local: "It was not ever clear to me that this would mean being marooned in Europe with no pension for my old age.
"Unless you know where to look online, it is very easy to miss this somewhat salient information."
Crozier, who lived and, once old enough, worked in Australia from 1965 to 2014 has chased elected officials in both France and Australia for an answer on why a social security agreement does not exist between two countries that have recently worked together on other significant partnerships, notably the recent €30 billion submarine deal.
"I am now 65. Recently, the Australian government pushed the pensionable age up to 67; because of when I was born, this means I reach pensionable age at 66 and a half. I don’t have long to go!" said Crozier.
"I have no ‘private pension’ as such, though I have a Superannuation (the Australian version of enforced saving) account into which I dropped actual money when I sold everything up to come here.
"Essentially, I am consuming my savings while I await some sense from the Australian government. Or from the French government – whichever is holding up proceedings."
Photo: AFP
Crozier added that other Australians she has come into contact with living in France, who are in a similar position, are considering moving to Spain - one of the countries that Australia has an international agreement with. You can click here for a full list of countries that do have a social security agreement with Australia.
But of course upping sticks and moving abroad yet again isn't for everyone.
"I have already made the major and most stressful move of my life and honestly would rather not do it again, even if I could afford it. I was kinda relying on my pension, a pittance though it would be!"
So is there a solution on the horizon?
It seems that for the moment nothing is set to change.
The latest international social security agreement confirmed by Australia was with Estonia on January 1st 2018. So far, nothing has been revealed regarding an agreement with France.
According to the Australian government's social security department: "Australia presently has 31 international social security agreements, with several more under negotiation.
"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."
In order to claim an Australian pension at the moment, people must either move back to Australia and wait for two years, or move to a country that does have an agreement.
Only people who have worked in France are eligible for a French pension, so early retirees would not be entitled to anything from the French state.
For more information on Australia's international social security agreements, click here.
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Photo: AFP
This leaves many Australian citizens who have made lives in France - as well as French people in Australia - faced with a choice of leaving a country they have made their home in order to claim the pension they earned over several years, if not decades.
In order to claim an Australian pension at the moment, people are faced with no choice but to head back to Australia and wait for two years before applying for the pension - at which which point they can return to France and still receive their pension.
And those who wait until after they have secured their Australian pension before moving to France are also in the clear. The lack of agreement only affects those who become eligible for their pension when they are already living in France.
Photo: AFPIn order to claim an Australian pension at the moment, people must either move back to Australia and wait for two years, or move to a country that does have an agreement.
Only people who have worked in France are eligible for a French pension, so early retirees would not be entitled to anything from the French state.
For more information on Australia's international social security agreements, click here.
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