Post by Banjo on Oct 28, 2012 7:15:52 GMT 7
Australia in the Asian Century White Paper Release.
this document is being released to day and contains submissions by myself and our member, writer Bruce Bickerstaff.
Our circumstances have changed dramatically since I made my submission, we still had high hopes for the unlimited portability but Bruce's is excellent and well worth reading.
asiancentury.dpmc.gov.au/about
PARITY FOR PENSIONER PARIAHS
A submission in relation to ‘Australia in the Asian Century’
Amended version - 24 February 2012
Bruce Bickerstaff
Emerging social and economic trends are seeing substantial numbers of Australian citizens venturing northwards, and doing so more often and for longer periods of time. I suspect many others are waiting in the wings seeking to follow in their footsteps. Government regulation, in both Australia and in potential host countries, is a key variable in determining the extent to which this latent demand is expressed. In some cases regulations impose financial penalties, or provide other forms of disincentive, that will have the effect of curbing the propensity of Australians to spend time in Asia or relocate there.
The focus of this submission is the provision of government welfare support, both financial and non-financial, for Australian citizens spending extended periods of time in Asian countries. In particular I examine the situation of those in receipt of the Aged Pension and the Disability Support Pension. In so doing I consider the effect of existing policies and procedures, as well as the nature of what I see as necessary reforms. Central to my concerns are the application of deemed residency and portability of benefits, as are currently applied to welfare recipients.
I was motivated to write this submission as I believe that some of these regulations, and the manner of their administration, are anachronistic, illogical, and discriminatory. In addition, current requirements and related procedures represent a significant and unnecessary financial impost for both government and citizen alike.
The typical knee-jerk reaction upon hearing the words ‘welfare recipients overseas’ is often one that features frothing mouths and expressions of righteous indignation. Conversations then typically move off on wild tangents, with positions quickly becoming polarized. To clarify and diffuse the situation, this submission does not argue a position in relation to matters such as (non-residential) eligibility criteria, appropriate levels of benefit, or the range of welfare programs on offer. It is assumed that these issues are already being competently addressed by the relevant authorities. It may well be that they are not, but that shall be the fodder for other submissions and other inquiries.
It is no longer appropriate to consider the preferred or usual residential location of a welfare recipient as a primary factor in determining whether support is warranted. Barring compelling evidence to the contrary, an Australian citizen in an Asian country is just as deserving of support as others who are permanently situated in Australia. I believe that all of the benefits of citizenship should be accorded to Australians wherever they choose to reside, provided that they conform to other reasonable requirements. The only exceptions to this rule should be those specific situations where it can be proven that the provision of benefits would not be in the national interest.
To properly address these matters I propose that a review and rationalization of relevant government regulations now occur. Whilst this should encompass programs other than just the Aged Pension and the Disability Support Pension, it is in these two situations that I find the argument for immediate reform to be most compelling.
Australians in Asia
Apart from the traditional short-term holiday-maker, many thousands of Australians live in Asian countries, or spend extended periods of time there each year. This vast grouping of disparate of individuals includes the following:
Status Some typical examples
Employed and not in receipt of Aust. government benefits Employed or operating a business in an Asian country, operating an internet-based business, telecommuting from an Australian business, those employed in a fly in/fly out capacity in a country other than Australia or their Asian country of residence, and those ‘working’ as a volunteer in a not-for-profit organisation.
Not employed/ Not seeking employment/ Not in receipt of Aust. Government benefits Self-supporting retirees, people on extended holidays (for example, those on long-service leave or taking a ‘time-out’ from their careers), people obtaining medical treatment (i.e. medical tourism), and people spending time with the family of a foreign-born spouse (for example to assist during illness)
Not employed/ Not seeking employment/ In receipt of Aust. Government benefits or insurance payments Retirees in receipt of aged pension, Australians who are permanently incapacitated and in receipt of the Disability Support Pension, people recovering from accidents or illness or trauma
Miscellaneous Serial bar-flies, brothel-creepers, criminals and drug addicts – that very small minority often portrayed in the popular media as being representative of western expats in Asia
Some of those living in Asia for extended periods of time have a regular routine, for example to take advantage of seasonal weather which may assist certain medical conditions, or simply to comply with government regulations, for e.g. residency or visa requirements. It should be noted though that many others come and go from Australia intermittently, depending on personal financial circumstances, work and family commitments, health issues, and other factors.
It is difficult to ascertain the precise number of Australians living in the various situations described in the preceding table. I attempted a similar exercise looking at all expats living in one particular Asian country. That informal study identified the number of expats in Thailand as being in the low hundreds of thousands, this figure excluding those from neighboring Asian countries. The best we can do, in the absence of extensive and time-consuming research efforts, is to obtain an incomplete picture using data from the Australian Bureau of Statistics concerning arrivals and departures to/from each Asian country.
There is no one particular lobby group that represents the interests of these Australians. Some Australian welfare groups have spoken up on the issue of portability of benefits, but given current prejudice one could understand if they were somewhat reserved about being seen to lobby for the interests of absentee or travelling welfare recipients.
This lack of a strong unified lobbying force, combined with the fact that many older expats no longer vote, makes this particular group of Australians a soft target for any government that wishes to score populist points whilst riding rough-shod over their rights.
In drafting this submission I was, however, able to draw upon the experience of members of an informal network of Australian citizens concerned about the rights of welfare recipients who choose to regularly spend time outside Australia. Their basic premise is that recipients of the Disability Support Pension should be granted the ‘Right to travel and live where they please’. Members of this network previously tendered a submission to the Inquiry into the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010.
The world has changed – but some regulations, procedures & mindsets remain rooted in the past
By and large, the foundations of the current Australian regulatory regime arose in a very different era when:
• Many Australians did not travel overseas, and if they did it was typically only for a couple of weeks (annual vacation or a business trip)
• If people moved away from Australia and lived in another country then the move was often permanent
• Most husbands, wives and children lived together 52 weeks of the year
• People lived and worked in the same country
• People worked continuously for several decades and then stopped working permanently when they retired or died
• Most Australians were born in Australia, married other Australians, and lived and died in Australia
The situation in 2012 differs in that:
• Telecommuting means that people can work – or even run a business – in one country whilst living or travelling in one or more other countries
• More and more people are taking “time-outs” during their careers to retrain or reinvigorate themselves
• Health tourism is growing to take advantage of cheaper treatment in Asian countries, plus the availability of budget carriers and discounted airfares
• Growing numbers of people are working in fly-in-fly-out situations or contract jobs where they are separated from their spouse/family for weeks or even months at a time.
• Many people travel and are confident of their ability to cope in other countries … one aspect of this being a greater willingness to consider retirement in another country
• Growing numbers of Australians are marrying Asian nationals
Some other pertinent factors include:
• The cost of medical treatment in Australia and other issues with the public health system
• The high and increasing cost of living in Australia
• The current high cost of retirement living and aged care in Australia, despite the often miserable living conditions on offer therein … and the knowledge that worse is yet to come as our population ages
• The strong Australian dollar
• The Global Financial Crisis which has seen the retirement savings of many Australian decimated
Although all these significant changes have taken place, and the pace of change is ongoing, the old ways continue to be reflected in government regulations and procedures, and in the mindset of those responsible for their oversight.
The current regulatory framework
I shall not provide a summary of the many types of benefits relevant to those spending time in Asia, and the myriad conditions applying to each. This is a complex issue and rather than devote a large portion of my submission to it, I would direct readers to that information which is available within referenced web sites and other online sources. This complexity and variation across programs and agencies is in fact, part of the problem. Instead I will endeavor to provide a concise overview of some of the main topics.
Two related factors form the basis of restrictions on the ability of some Australians to spend time in Asia, and these are the regulations governing residency requirements and portability of benefits.
In general, a person must be an "Australian resident", as defined in the section 7 of the Social Security Act 1991, in order to qualify for Australian social security payments … “The principle that only Australian residents should qualify for social security payments is fundamental to the Australian income support system.” Simply being an Australian citizen, even one who has lived most of their life in Australia, does not automatically make someone an “Australian resident”.
The web site of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) notes that:
“In deciding whether a person is residing in Australia, factors such as the person's domestic, financial and family ties to Australia are taken into account, as well as the frequency and duration of any absence from Australia and the reasons for such absences.”
In practice, however, factors other than time spent outside Australia are secondary matters, often only considered in the context of an administrative decision that has been subject to appeal.
“Portability of benefits relates to the ability to maintain support whilst outside of Australia.
The term '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. This is particularly true in ethnically diverse societies such as Australia, where almost a quarter of the population is overseas born.” (NB: The same page within the FaHCSIA web site provides other important background information on the issue of portability of benefits)
According to the Centrelink web site:
“Most Centrelink payments and services can only be paid for temporary absences of up to 13 weeks outside Australia and you must remain qualified for your payment while you are absent from Australia (you continue to meet the normal qualification rules for the payment, your permanent home is still in Australia, and you are only absent from Australia temporarily, e.g. for a holiday or a visit).”
Exceptions are made for certain individuals, for example those who have been granted the right to stay overseas permanently via “grandfather” provisions related to earlier regulations. Such individuals pay a substantial price for their freedom to reside overseas, however, in that they forfeit the right claim many benefits including (for example) Medicare, upon their return to Australia.
It is noted that qualifying periods apply to newly-arrived settlers to Australia, before they can claim welfare benefits. Most people would consider this measure to be entirely appropriate. Such periods vary from two to ten years depending on the type of benefit, although exceptions are made for certain groups such as refugees.
Qualifying periods also apply to Australian citizens who have lost their residency status due to time spent overseas. A common example of this is Australians who have spent time in Asia immediately prior to reaching 65 years of age. Such individuals are generally required to move back to Australia and remain there for at least two years before they become (potentially) eligible to receive the aged pension.
I believe that any freeing-up of the residency requirements should not come at the expense of losing the right to claim benefits (either temporarily or permanently) when visiting or moving back to Australia, and that instead a seamless transition should be made possible.
Elements of the current regulatory regime were considered as recently as 2010 within the context of the Inquiry into the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010. Rather than liberalizing the regulations in place at that time, based on those factors discussed in this submission, the thrust of the proposed changes was in the opposite direction:
“The purpose of schedule 2 of the bill is to amend the Social Security Act 1991 (the Act) to introduce a requirement for ongoing residence in Australia to qualify for the disability support pension (DSP), bringing the DSP into line with other workforce age payments.
The main purpose of the DSP is to assist recipients with the cost of living in Australia, and to support their engagement in workforce age activities that lead to greater levels of social and economic participation. The amendments are intended to prevent payment of the DSP to people who live permanently overseas but return to Australia every thirteen weeks in order to retain their pension.” (my emphasis added)
Whilst the Advisory Panel might benefit from reading the entire report, this quote illustrates a fixation on the notion that only Australian citizens in Australia have legitimate needs and the right to be assisted in meeting those needs. It would seem that the purported merits of this position are such that they make redundant any consideration of the benefits that might accrue to the government and to affected individuals by treating all Australians as equals.
As a result of representations received and further consideration of the matter the amended draft legislation was somewhat more accommodating although still imperfect.
Problems related to consistency, coordination and communication
Adding to difficulties caused by the nature of existing regulations are the following issues:
• a lack of consistency in the way these issues are dealt with by different Australian government agencies
• a lack of consistency in the way these issues are dealt with by different staff within the same government agency, and sometimes an
• unwillingness or inability to provide a reasonable standard of customer service to Australian citizens located outside of Australia
In relation to the last two dot points, one agency that has been identified as a consistently poor performer is Centrelink. Based on feedback from members of the DSP-Overseas network, there would appear to have been very many instances of Centrelink staff furnishing incorrect and/or contradictory information in response to queries. This often results in welfare recipients being forced to appeal administrative decisions, with many such appeals being subsequently found in favor of the aggrieved individual. There are also reports of Australians in Asia –or those wishing to travel to Asia - being subjected to hostility and/or derisive comments from Centrelink staff when seeking assistance.
It would appear that the Centrelink customer service model is very much based on face-to-face contact, with its ability to service the needs of clients outside Australia leaving much to be desired:
Phone contact with Centrelink: The 1800 numbers usually provided in commonwealth government agency web sites do not work when called from overseas, and there is no international free-call number. The Centrelink website suggests calling reverse-charges, but not all countries offer this facility. If people elect to call at their own expense then they are generally forced to wait in lengthy phone queues.
Email contact with Centrelink: The Centrelink web site discourages email contact, and when emails are sent often no response is ever received – even when file numbers, etc, are provided.
Current regulations hinder overseas travel and residence by Australian citizens – but for what purpose?
The major reason for those receiving support wishing to spend time in Asia is probably the far lower cost of living there, compared with Australia. Those whose need to seek out a low-cost living environment is greatest, are also those most likely to be reliant on government support.
Issues such as residency and portability do not constrain the travel plans of wealthy self-funded retirees, as they are not reliant on the provision of government benefits. Note that I included the word “wealthy” as the savings and retirement plans of many Australians have been left in tatters by the prevailing economic conditions of the past few years.
As a consequence of existing residency requirements, individuals on limited incomes face the choice of remaining in hardship in Australia or spending a portion of their limited income traveling to Australia every few months to meet residency requirements - in order to enjoy the financial and other advantages of life in Asia for the remainder of the year.
In researching this issue I could not readily identify justification for the existing residency requirements, so I posed this question at a meeting of the DSP-Overseas network. The answer I received was “which makes better headlines? … Crackdown proposed for jet-setting welfare cheats, or Government to save money by relaxing restrictions on Australians living abroad”?
Is this overly cynical or is it an accurate reflection of the factors that drive public policy on this issue? Upon arriving home afterwards I went online and sure enough, quickly discovered the following newspaper article:
www.couriermail.com.au/money/welfare-loophole-allows-disability-pensioners-to-go-on-permanent-vacation/story-e6freqoo-1225846381856
I invite members of the Advisory Panel to read this article, and also to scan the many comments contributed by readers. Some of these are quite pragmatic and level-headed, whilst others are the sort of angry and ill-informed rhetoric encountered on talk-back radio ... for example “if they can afford to travel overseas they don’t need welfare”, and “living it up like kings in popular holiday destinations”.
I would further suggest that the Advisory Panel then consider the personal insights offered by those Australians who have posted their stories on this page (and elsewhere in this site):
dspoverseas.proboards.com/index.cgi?board=writing&action=display&thread=227
I have encountered many aged and disabled Australians in Asia. Yes, some favor pony-tails and loud shirts, which cynical onlookers find to be a source of amusement. Yet while they may struggle with their disabilities and/or encroaching infirmity, I notice they often sport a smile on their faces. They have managed to ‘get a life’ here in Asia. And surely that’s not a bad thing.
In my online searching I found no argument provided, or evidence given, that (for example) fraud was more prevalent amongst recipients in locations remote from agency shop-fronts. I would imagine, and this is only conjecture, that if someone was determined to cheat the system then they would be just as likely to attempt to do so whilst living in Australia, as against (for example) whilst traveling in an Asian country.
What I did find online – indeed even in FaHCSIA’s own web site - was confirmation that the Australian economy is the winner when we compare support payments paid by foreign governments to people residing in Australia, with Australian government support payments flowing offshore. On the positive side of the balance sheet are:
• Foreign nationals living in Australia, all or part of the year, receiving support from their respective governments
• Australian permanent residents or citizens, who were born in or have lived in another country, being paid support by foreign governments
• Australians living overseas all or part of the year who are forgoing payments that they would otherwise be eligible for, for example rent assistance. They are also not drawing on Medicare or pharmaceutical benefits or the health or aged care system, etc.
On this last dot point, FaHCSIA was challenged in a 2010 legislative inquiry about the true cost/benefit situation (of further restricting Asian long-stays) given the various payments and services that expats would be foregoing. Their response was to highlight the savings that would be achieved by having Asia-based Australians relinquish their rights to the welfare support provided to mainland Australians – essentially forcing them out of the welfare system.
Now I could well understand this argument being put forward by Treasury, but when it is advanced by a ‘welfare’ agency … well it seems a bit ‘off’. At the same time, however, FaHSCIA conceded that savings would occur if people were allowed unlimited portability of benefits.
Let’s be quite clear about this, allowing welfare recipients to spend time overseas does not involve an additional financial drain on the Australian community – it actually saves money and frees up resources within the system. Further, should these absences overseas result in enhanced physical and mental well-being then there would likely be additional follow-on financial savings to the Australian community.
In my experience once older expats are settled in Asia they often opt to have medical procedures undertaken locally, rather than travelling back to Australia to take advantage of ‘free’ medical care. In making this decision they consider factors such as the cost of airfares and accommodation for themselves and their spouse/carer, plus the more affordable cost of hospital treatment in Asia.
FaHCSIA states that:
“Australia's income support system is based on residence and need … Payments for the long-term contingencies of life, such as old age and disability, are further restricted to those people with a long-term connection with Australia (unless, in the case of Disability Support Pension, the disability occurs while the person is an Australian resident).”
So what of this emphasis placed on the need to demonstrate “enduring ties” to Australia? This seems to imply that Australians living overseas have ‘turned their backs on Australia’ or do not take their citizenship status seriously. What a patronizing and parochial perspective this would seem to be. Some of these individuals have served in the Armed Services on Australia’s behalf. Many, if not most, have raised families in Australia and have worked and paid taxes for decades. As noted elsewhere in this submission, a major factor for many is the financial imperative of seeking out a lower cost environment – rather than some sort of pointed rejection of Australia or Australian values.
Is another issue a fear that employment, income, or assets are being hidden overseas? If so, has this been proven to be a valid concern? Many of the affected individuals retain Australian tax-resident status and lodge annual returns. In other cases, reciprocal tax arrangements and information sharing could potentially be employed to flush out any miscreants.
I am advised that Centrelink staff, when communicating with Australians who have been in Asia for many months, have been known to quip “Well, you’re a resident of (for example) Thailand then?”. This is not the case at all. For an Australian citizen to obtain ‘permanent residency’ in Thailand is a particularly difficult process – even more so than in the case of Thais obtaining Australian resident status. The standard free-on-entry tourist visa only permits a stay of up to 30 days. Many of those individuals who are the focus of this submission must opt for a ‘non-immigrant O-A visa’, intended for retirees aged 50 or over who wish to stay for a year or more. As an aside, this particular visa prohibits any form of employment, a term which is defined very broadly in the relevant Thai statute.
Given all of the preceding, the issue of where welfare recipients choose to travel or to live now seems to me to be, to a very large extent, simply a ‘red herring’.
As hinted at earlier, more significant issues could well be:
• the procedures for assigning permanent resident status and citizenships for newly arrived migrants, and the qualifying periods for receipt of various benefits
• the integrity of Australia’s tax system and information sharing with tax agencies in other countries
• the integrity of systems used to ensure that recipients are accorded appropriate levels of support, for example, that people claiming family assistance actually have families, that people claiming disability support pensions are in fact disabled, etc.
• the availability of cost-effective systems to check and monitor, to consult with, and to provide human support to, those recipients of government support who are situated in remote locations.
This last dot point is interesting given that recent advances in technology, and existing government strategy, is rapidly bridging the gap between service provider and service recipient – no matter where each is located. Note for example the following extract from the recently-released federal Digital Economy Strategy:
“The Government has also demonstrated how key services such as education and health can be delivered to regional, rural and remote communities of Australia through innovative uses of broadband. For example, the Enhancement of Telehealth in Western Australia project includes remote patient assessments, virtual mental health clinics and virtual health clinics that allow health workers, medical professionals and specialists to consult with and advise patients across the state ... Through the ConnectCare project, the installation of new software and of broadband capabilities has allowed small to medium sized aged care facilities to digitise large amounts of their day-to-day operations. Patient records are now held digitally and networked throughout the facility, allowing staff to check and update patient information anywhere in the facility at any time. The broadband capability allows residents to use videoconferencing to make contact with relatives and families regardless of their location.”
Now let’s substitute the words “Australians living abroad” for “regional, rural and remote communities of Australia”. And of course we already have access to web-based communication tools like Skype and social networking that are available – to varying degrees – right across Asia.
Should ‘in-the-flesh’ personal consultations be desirable or necessary, there is also the option of:
• basing a welfare contact officer within Australia’s embassy in those Asian countries with exceptionally large numbers of expats, and/or
• utilizing the existing network of Australian government accredited doctors in Asian countries that is used in conjunction with applications for spouse visas, etc.
It really is quite untenable to require the frail aged and severely disabled to make the arduous journey to Australia every few months simply so that a departmental officer can tick a box. Bueller? Bueller?
Another important matter that I would like to address is the need for access to good quality aged care facilities. Issues associated with the cost, standard and availability of such facilities and services in Australia have been well-publicised, and most would recognized the current situation as being a far from ideal. Further, it would seem that building and operating high-quality aged care facilities is simply not financially viable in Australia at the present time. Indeed it may never be feasible in the absence of massive additional and ongoing injections of government funding. Perhaps there is a better way?
Whilst aged care facilities have not traditionally been a part of the Asian cultural landscape, we are now seeing the emergence of this type of venture – partly to satisfy the demand from western retirees and partly due to changes in Asian society. This could most certainly be a win/win situation for all concerned, but will only be of benefit to many Australians if they are permitted to continue to receive government support whilst living overseas.
To give an example of the difference in cost, consider Dok Kaew Gardens. This new two-stage residential aged-care facility in Northern Thailand is pictured below. The cost of a private room in the low-care wing is THB24,000 per month (approx AUD26 per day), and THB35,000 per month (approx AUD38 per day) in the medium-care (dementia) wing. This is about a quarter of the cost to the Australian government of providing a place in an Australian aged care facility (comprising annual subsidy plus capital financing costs). Alternatively, consider the plight of Australians whose assets/income are in excess of the Australian means-test, and who pay around $100 per day, plus an accommodation bond of up to several hundred thousand dollars.
Australia's International Social Security Agreements
Australia has 27 international social security agreements, but only two of which are in Asia. It should come as no surprise that these are with the more affluent nations of Japan and South Korea. These agreements are said to “help to cover gaps in social security coverage for people who migrate between countries. Responsibility for social security is shared between the countries where a person has lived between certain ages, and they may be able to receive pensions from both countries. Usually, each country will pay a part pension to a person who has lived in both countries.”
The benefit of these agreements from the perspective of the welfare recipient is that they:
• allow people to add together periods of social insurance (or residence in some cases) in an agreement country together with periods of Australian residence to meet the minimum qualifying residence periods for an Australian pension or a pension from the agreement country.
• overcome payment restrictions by the agreement country based on citizenship or country of residence, and sometimes
• enable recipients to lodge a claim for a benefit under an agreement while living in a country other than the two countries that are party to the agreement.
Given the very limited social welfare systems in many Asian countries and other factors, reliance on negotiating further such agreements may not be a viable solution to the problems discussed in this submission. Although in saying this, the major obstacle in some countries might be as much political as it is economic in nature. A case in point is Thailand, which garners very substantial revenue via expenditure by expats and international tourists, and through foreign investment generally.
Current developments in Britain
Other countries are also grappling with issues related to the fading significance of international borders, as well as the provision of social welfare in ageing populations. Indeed it is my view that this issue is sure to become a matter of considerable significance affecting people and governments in many western countries.
Interestingly, whilst finalizing this submission I happened upon a discussion in an online expat forum in which I noted a reference to a British newspaper article entitled “Why has Britain turned its back on expats”. The article was written by John Markham the director of the ‘International Consortium of British Pensioners’. This lobby group fights for the rights of pensioners living overseas, and maintains a web site which contains a great deal of information relevant to this issue. The Telegraph article, and the many comments subsequently contributed by readers, can be accessed at:
www.telegraph.co.uk/finance/personalfinance/offshorefinance/9080075/Why-has-Britain-turned-its-back-on-expats.html
The original forum discussion at www.thaivisa.com/forum/topic/534898-british-ex-pat-pensioners received 2,000 views in the first day and a half online. A related discussion thread was started soon afterwards at www.thaivisa.com/forum/topic/535277-you-think-thailand-is-bad-try-the-uk-pensions-lot. That discussion thread received 92 replies and well over 800 views in its first six hours online. This is clearly an issue of considerable concern to many western expats in Asia.
One extraordinary point of difference between Australia and the UK is that almost half of Britain’s aged pensioners choose to live overseas. Despite this and other differences between the two welfare systems, it is interesting to note that there are also significant similarities. These include the strength and the polarization evident in public sentiment, the consensus that pensioners living offshore lessen the financial burden on the community, and each respective government’s illogical and short-sighted approach to managing the issue.
Action that now needs to be taken to address this situation
1. Undertake a major review of the Government’s position on the issue of residency and portability of benefits
Identify those federal government regulations and procedures that restrict the ability of Australian citizens to undertake extended stays and/or reside in Asian countries, and then undertake a review of each. The aim of the review should be a comprehensive overhaul of the Government’s position on this matter, with an analysis of the cost and benefits of alternate future courses of action, and finally outlining a recommended course of action based on a consistent and coordinated whole-of-government approach.
Some of the key stakeholder agencies would include:
Department of Social Security/Centrelink/Family Assistance Office
Department of Families, Housing, Community Services and Indigenous Affairs
Department of Immigration and Citizenship
Department of Veterans Affairs
Department of Foreign Affairs and Trade, and the
Taxation Department
2. Further enhance the provision of government services and support for Australians remote from agency shop-fronts, including Australians travelling or based overseas
Each agency to undertake a review of the range and standard of service it provides to Australian citizens outside Australia. Outcomes of this exercise might include enhancements to web site functionality, adopting service standards in relation to answering email enquiries, providing call-centre staff trained to provide advice specific to the needs of Australians overseas, as well as the provision of an international free-call service.
3. Interim measures to be considered whilst awaiting the implementation of recommendations arising from the proposed major review
3.1 Relax and standardize Australian residency criteria: The residency requirements related to time spent within Australia should be brought into line with the current requirement for those entering Australia and granted “permanent residency”, viz. Australian residence is recognized when individuals spend at least two years within Australia (cumulatively) within each successive five year period.
3.2 Establish greater clarity and uniformity in terminology: At present the definition of terms such as “residency”, “holidays”, “short trips”, “visit” and “living overseas”, varies across agencies, is frequently ambiguous, and thus is subject to differing interpretations and often leads to costly administrative appeals.
3.3 Strive for the consistent and uniform application of existing regulations within each agency: Greater efforts to be made, by all relevant agencies, in achieving uniformity in the implementation of existing policies applying to the portability of benefits, and the needs of Australians overseas, across all staff within each respective organisation.
this document is being released to day and contains submissions by myself and our member, writer Bruce Bickerstaff.
Our circumstances have changed dramatically since I made my submission, we still had high hopes for the unlimited portability but Bruce's is excellent and well worth reading.
asiancentury.dpmc.gov.au/about
PARITY FOR PENSIONER PARIAHS
A submission in relation to ‘Australia in the Asian Century’
Amended version - 24 February 2012
Bruce Bickerstaff
Emerging social and economic trends are seeing substantial numbers of Australian citizens venturing northwards, and doing so more often and for longer periods of time. I suspect many others are waiting in the wings seeking to follow in their footsteps. Government regulation, in both Australia and in potential host countries, is a key variable in determining the extent to which this latent demand is expressed. In some cases regulations impose financial penalties, or provide other forms of disincentive, that will have the effect of curbing the propensity of Australians to spend time in Asia or relocate there.
The focus of this submission is the provision of government welfare support, both financial and non-financial, for Australian citizens spending extended periods of time in Asian countries. In particular I examine the situation of those in receipt of the Aged Pension and the Disability Support Pension. In so doing I consider the effect of existing policies and procedures, as well as the nature of what I see as necessary reforms. Central to my concerns are the application of deemed residency and portability of benefits, as are currently applied to welfare recipients.
I was motivated to write this submission as I believe that some of these regulations, and the manner of their administration, are anachronistic, illogical, and discriminatory. In addition, current requirements and related procedures represent a significant and unnecessary financial impost for both government and citizen alike.
The typical knee-jerk reaction upon hearing the words ‘welfare recipients overseas’ is often one that features frothing mouths and expressions of righteous indignation. Conversations then typically move off on wild tangents, with positions quickly becoming polarized. To clarify and diffuse the situation, this submission does not argue a position in relation to matters such as (non-residential) eligibility criteria, appropriate levels of benefit, or the range of welfare programs on offer. It is assumed that these issues are already being competently addressed by the relevant authorities. It may well be that they are not, but that shall be the fodder for other submissions and other inquiries.
It is no longer appropriate to consider the preferred or usual residential location of a welfare recipient as a primary factor in determining whether support is warranted. Barring compelling evidence to the contrary, an Australian citizen in an Asian country is just as deserving of support as others who are permanently situated in Australia. I believe that all of the benefits of citizenship should be accorded to Australians wherever they choose to reside, provided that they conform to other reasonable requirements. The only exceptions to this rule should be those specific situations where it can be proven that the provision of benefits would not be in the national interest.
To properly address these matters I propose that a review and rationalization of relevant government regulations now occur. Whilst this should encompass programs other than just the Aged Pension and the Disability Support Pension, it is in these two situations that I find the argument for immediate reform to be most compelling.
Australians in Asia
Apart from the traditional short-term holiday-maker, many thousands of Australians live in Asian countries, or spend extended periods of time there each year. This vast grouping of disparate of individuals includes the following:
Status Some typical examples
Employed and not in receipt of Aust. government benefits Employed or operating a business in an Asian country, operating an internet-based business, telecommuting from an Australian business, those employed in a fly in/fly out capacity in a country other than Australia or their Asian country of residence, and those ‘working’ as a volunteer in a not-for-profit organisation.
Not employed/ Not seeking employment/ Not in receipt of Aust. Government benefits Self-supporting retirees, people on extended holidays (for example, those on long-service leave or taking a ‘time-out’ from their careers), people obtaining medical treatment (i.e. medical tourism), and people spending time with the family of a foreign-born spouse (for example to assist during illness)
Not employed/ Not seeking employment/ In receipt of Aust. Government benefits or insurance payments Retirees in receipt of aged pension, Australians who are permanently incapacitated and in receipt of the Disability Support Pension, people recovering from accidents or illness or trauma
Miscellaneous Serial bar-flies, brothel-creepers, criminals and drug addicts – that very small minority often portrayed in the popular media as being representative of western expats in Asia
Some of those living in Asia for extended periods of time have a regular routine, for example to take advantage of seasonal weather which may assist certain medical conditions, or simply to comply with government regulations, for e.g. residency or visa requirements. It should be noted though that many others come and go from Australia intermittently, depending on personal financial circumstances, work and family commitments, health issues, and other factors.
It is difficult to ascertain the precise number of Australians living in the various situations described in the preceding table. I attempted a similar exercise looking at all expats living in one particular Asian country. That informal study identified the number of expats in Thailand as being in the low hundreds of thousands, this figure excluding those from neighboring Asian countries. The best we can do, in the absence of extensive and time-consuming research efforts, is to obtain an incomplete picture using data from the Australian Bureau of Statistics concerning arrivals and departures to/from each Asian country.
There is no one particular lobby group that represents the interests of these Australians. Some Australian welfare groups have spoken up on the issue of portability of benefits, but given current prejudice one could understand if they were somewhat reserved about being seen to lobby for the interests of absentee or travelling welfare recipients.
This lack of a strong unified lobbying force, combined with the fact that many older expats no longer vote, makes this particular group of Australians a soft target for any government that wishes to score populist points whilst riding rough-shod over their rights.
In drafting this submission I was, however, able to draw upon the experience of members of an informal network of Australian citizens concerned about the rights of welfare recipients who choose to regularly spend time outside Australia. Their basic premise is that recipients of the Disability Support Pension should be granted the ‘Right to travel and live where they please’. Members of this network previously tendered a submission to the Inquiry into the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010.
The world has changed – but some regulations, procedures & mindsets remain rooted in the past
By and large, the foundations of the current Australian regulatory regime arose in a very different era when:
• Many Australians did not travel overseas, and if they did it was typically only for a couple of weeks (annual vacation or a business trip)
• If people moved away from Australia and lived in another country then the move was often permanent
• Most husbands, wives and children lived together 52 weeks of the year
• People lived and worked in the same country
• People worked continuously for several decades and then stopped working permanently when they retired or died
• Most Australians were born in Australia, married other Australians, and lived and died in Australia
The situation in 2012 differs in that:
• Telecommuting means that people can work – or even run a business – in one country whilst living or travelling in one or more other countries
• More and more people are taking “time-outs” during their careers to retrain or reinvigorate themselves
• Health tourism is growing to take advantage of cheaper treatment in Asian countries, plus the availability of budget carriers and discounted airfares
• Growing numbers of people are working in fly-in-fly-out situations or contract jobs where they are separated from their spouse/family for weeks or even months at a time.
• Many people travel and are confident of their ability to cope in other countries … one aspect of this being a greater willingness to consider retirement in another country
• Growing numbers of Australians are marrying Asian nationals
Some other pertinent factors include:
• The cost of medical treatment in Australia and other issues with the public health system
• The high and increasing cost of living in Australia
• The current high cost of retirement living and aged care in Australia, despite the often miserable living conditions on offer therein … and the knowledge that worse is yet to come as our population ages
• The strong Australian dollar
• The Global Financial Crisis which has seen the retirement savings of many Australian decimated
Although all these significant changes have taken place, and the pace of change is ongoing, the old ways continue to be reflected in government regulations and procedures, and in the mindset of those responsible for their oversight.
The current regulatory framework
I shall not provide a summary of the many types of benefits relevant to those spending time in Asia, and the myriad conditions applying to each. This is a complex issue and rather than devote a large portion of my submission to it, I would direct readers to that information which is available within referenced web sites and other online sources. This complexity and variation across programs and agencies is in fact, part of the problem. Instead I will endeavor to provide a concise overview of some of the main topics.
Two related factors form the basis of restrictions on the ability of some Australians to spend time in Asia, and these are the regulations governing residency requirements and portability of benefits.
In general, a person must be an "Australian resident", as defined in the section 7 of the Social Security Act 1991, in order to qualify for Australian social security payments … “The principle that only Australian residents should qualify for social security payments is fundamental to the Australian income support system.” Simply being an Australian citizen, even one who has lived most of their life in Australia, does not automatically make someone an “Australian resident”.
The web site of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) notes that:
“In deciding whether a person is residing in Australia, factors such as the person's domestic, financial and family ties to Australia are taken into account, as well as the frequency and duration of any absence from Australia and the reasons for such absences.”
In practice, however, factors other than time spent outside Australia are secondary matters, often only considered in the context of an administrative decision that has been subject to appeal.
“Portability of benefits relates to the ability to maintain support whilst outside of Australia.
The term '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. This is particularly true in ethnically diverse societies such as Australia, where almost a quarter of the population is overseas born.” (NB: The same page within the FaHCSIA web site provides other important background information on the issue of portability of benefits)
According to the Centrelink web site:
“Most Centrelink payments and services can only be paid for temporary absences of up to 13 weeks outside Australia and you must remain qualified for your payment while you are absent from Australia (you continue to meet the normal qualification rules for the payment, your permanent home is still in Australia, and you are only absent from Australia temporarily, e.g. for a holiday or a visit).”
Exceptions are made for certain individuals, for example those who have been granted the right to stay overseas permanently via “grandfather” provisions related to earlier regulations. Such individuals pay a substantial price for their freedom to reside overseas, however, in that they forfeit the right claim many benefits including (for example) Medicare, upon their return to Australia.
It is noted that qualifying periods apply to newly-arrived settlers to Australia, before they can claim welfare benefits. Most people would consider this measure to be entirely appropriate. Such periods vary from two to ten years depending on the type of benefit, although exceptions are made for certain groups such as refugees.
Qualifying periods also apply to Australian citizens who have lost their residency status due to time spent overseas. A common example of this is Australians who have spent time in Asia immediately prior to reaching 65 years of age. Such individuals are generally required to move back to Australia and remain there for at least two years before they become (potentially) eligible to receive the aged pension.
I believe that any freeing-up of the residency requirements should not come at the expense of losing the right to claim benefits (either temporarily or permanently) when visiting or moving back to Australia, and that instead a seamless transition should be made possible.
Elements of the current regulatory regime were considered as recently as 2010 within the context of the Inquiry into the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010. Rather than liberalizing the regulations in place at that time, based on those factors discussed in this submission, the thrust of the proposed changes was in the opposite direction:
“The purpose of schedule 2 of the bill is to amend the Social Security Act 1991 (the Act) to introduce a requirement for ongoing residence in Australia to qualify for the disability support pension (DSP), bringing the DSP into line with other workforce age payments.
The main purpose of the DSP is to assist recipients with the cost of living in Australia, and to support their engagement in workforce age activities that lead to greater levels of social and economic participation. The amendments are intended to prevent payment of the DSP to people who live permanently overseas but return to Australia every thirteen weeks in order to retain their pension.” (my emphasis added)
Whilst the Advisory Panel might benefit from reading the entire report, this quote illustrates a fixation on the notion that only Australian citizens in Australia have legitimate needs and the right to be assisted in meeting those needs. It would seem that the purported merits of this position are such that they make redundant any consideration of the benefits that might accrue to the government and to affected individuals by treating all Australians as equals.
As a result of representations received and further consideration of the matter the amended draft legislation was somewhat more accommodating although still imperfect.
Problems related to consistency, coordination and communication
Adding to difficulties caused by the nature of existing regulations are the following issues:
• a lack of consistency in the way these issues are dealt with by different Australian government agencies
• a lack of consistency in the way these issues are dealt with by different staff within the same government agency, and sometimes an
• unwillingness or inability to provide a reasonable standard of customer service to Australian citizens located outside of Australia
In relation to the last two dot points, one agency that has been identified as a consistently poor performer is Centrelink. Based on feedback from members of the DSP-Overseas network, there would appear to have been very many instances of Centrelink staff furnishing incorrect and/or contradictory information in response to queries. This often results in welfare recipients being forced to appeal administrative decisions, with many such appeals being subsequently found in favor of the aggrieved individual. There are also reports of Australians in Asia –or those wishing to travel to Asia - being subjected to hostility and/or derisive comments from Centrelink staff when seeking assistance.
It would appear that the Centrelink customer service model is very much based on face-to-face contact, with its ability to service the needs of clients outside Australia leaving much to be desired:
Phone contact with Centrelink: The 1800 numbers usually provided in commonwealth government agency web sites do not work when called from overseas, and there is no international free-call number. The Centrelink website suggests calling reverse-charges, but not all countries offer this facility. If people elect to call at their own expense then they are generally forced to wait in lengthy phone queues.
Email contact with Centrelink: The Centrelink web site discourages email contact, and when emails are sent often no response is ever received – even when file numbers, etc, are provided.
Current regulations hinder overseas travel and residence by Australian citizens – but for what purpose?
The major reason for those receiving support wishing to spend time in Asia is probably the far lower cost of living there, compared with Australia. Those whose need to seek out a low-cost living environment is greatest, are also those most likely to be reliant on government support.
Issues such as residency and portability do not constrain the travel plans of wealthy self-funded retirees, as they are not reliant on the provision of government benefits. Note that I included the word “wealthy” as the savings and retirement plans of many Australians have been left in tatters by the prevailing economic conditions of the past few years.
As a consequence of existing residency requirements, individuals on limited incomes face the choice of remaining in hardship in Australia or spending a portion of their limited income traveling to Australia every few months to meet residency requirements - in order to enjoy the financial and other advantages of life in Asia for the remainder of the year.
In researching this issue I could not readily identify justification for the existing residency requirements, so I posed this question at a meeting of the DSP-Overseas network. The answer I received was “which makes better headlines? … Crackdown proposed for jet-setting welfare cheats, or Government to save money by relaxing restrictions on Australians living abroad”?
Is this overly cynical or is it an accurate reflection of the factors that drive public policy on this issue? Upon arriving home afterwards I went online and sure enough, quickly discovered the following newspaper article:
www.couriermail.com.au/money/welfare-loophole-allows-disability-pensioners-to-go-on-permanent-vacation/story-e6freqoo-1225846381856
I invite members of the Advisory Panel to read this article, and also to scan the many comments contributed by readers. Some of these are quite pragmatic and level-headed, whilst others are the sort of angry and ill-informed rhetoric encountered on talk-back radio ... for example “if they can afford to travel overseas they don’t need welfare”, and “living it up like kings in popular holiday destinations”.
I would further suggest that the Advisory Panel then consider the personal insights offered by those Australians who have posted their stories on this page (and elsewhere in this site):
dspoverseas.proboards.com/index.cgi?board=writing&action=display&thread=227
I have encountered many aged and disabled Australians in Asia. Yes, some favor pony-tails and loud shirts, which cynical onlookers find to be a source of amusement. Yet while they may struggle with their disabilities and/or encroaching infirmity, I notice they often sport a smile on their faces. They have managed to ‘get a life’ here in Asia. And surely that’s not a bad thing.
In my online searching I found no argument provided, or evidence given, that (for example) fraud was more prevalent amongst recipients in locations remote from agency shop-fronts. I would imagine, and this is only conjecture, that if someone was determined to cheat the system then they would be just as likely to attempt to do so whilst living in Australia, as against (for example) whilst traveling in an Asian country.
What I did find online – indeed even in FaHCSIA’s own web site - was confirmation that the Australian economy is the winner when we compare support payments paid by foreign governments to people residing in Australia, with Australian government support payments flowing offshore. On the positive side of the balance sheet are:
• Foreign nationals living in Australia, all or part of the year, receiving support from their respective governments
• Australian permanent residents or citizens, who were born in or have lived in another country, being paid support by foreign governments
• Australians living overseas all or part of the year who are forgoing payments that they would otherwise be eligible for, for example rent assistance. They are also not drawing on Medicare or pharmaceutical benefits or the health or aged care system, etc.
On this last dot point, FaHCSIA was challenged in a 2010 legislative inquiry about the true cost/benefit situation (of further restricting Asian long-stays) given the various payments and services that expats would be foregoing. Their response was to highlight the savings that would be achieved by having Asia-based Australians relinquish their rights to the welfare support provided to mainland Australians – essentially forcing them out of the welfare system.
Now I could well understand this argument being put forward by Treasury, but when it is advanced by a ‘welfare’ agency … well it seems a bit ‘off’. At the same time, however, FaHSCIA conceded that savings would occur if people were allowed unlimited portability of benefits.
Let’s be quite clear about this, allowing welfare recipients to spend time overseas does not involve an additional financial drain on the Australian community – it actually saves money and frees up resources within the system. Further, should these absences overseas result in enhanced physical and mental well-being then there would likely be additional follow-on financial savings to the Australian community.
In my experience once older expats are settled in Asia they often opt to have medical procedures undertaken locally, rather than travelling back to Australia to take advantage of ‘free’ medical care. In making this decision they consider factors such as the cost of airfares and accommodation for themselves and their spouse/carer, plus the more affordable cost of hospital treatment in Asia.
FaHCSIA states that:
“Australia's income support system is based on residence and need … Payments for the long-term contingencies of life, such as old age and disability, are further restricted to those people with a long-term connection with Australia (unless, in the case of Disability Support Pension, the disability occurs while the person is an Australian resident).”
So what of this emphasis placed on the need to demonstrate “enduring ties” to Australia? This seems to imply that Australians living overseas have ‘turned their backs on Australia’ or do not take their citizenship status seriously. What a patronizing and parochial perspective this would seem to be. Some of these individuals have served in the Armed Services on Australia’s behalf. Many, if not most, have raised families in Australia and have worked and paid taxes for decades. As noted elsewhere in this submission, a major factor for many is the financial imperative of seeking out a lower cost environment – rather than some sort of pointed rejection of Australia or Australian values.
Is another issue a fear that employment, income, or assets are being hidden overseas? If so, has this been proven to be a valid concern? Many of the affected individuals retain Australian tax-resident status and lodge annual returns. In other cases, reciprocal tax arrangements and information sharing could potentially be employed to flush out any miscreants.
I am advised that Centrelink staff, when communicating with Australians who have been in Asia for many months, have been known to quip “Well, you’re a resident of (for example) Thailand then?”. This is not the case at all. For an Australian citizen to obtain ‘permanent residency’ in Thailand is a particularly difficult process – even more so than in the case of Thais obtaining Australian resident status. The standard free-on-entry tourist visa only permits a stay of up to 30 days. Many of those individuals who are the focus of this submission must opt for a ‘non-immigrant O-A visa’, intended for retirees aged 50 or over who wish to stay for a year or more. As an aside, this particular visa prohibits any form of employment, a term which is defined very broadly in the relevant Thai statute.
Given all of the preceding, the issue of where welfare recipients choose to travel or to live now seems to me to be, to a very large extent, simply a ‘red herring’.
As hinted at earlier, more significant issues could well be:
• the procedures for assigning permanent resident status and citizenships for newly arrived migrants, and the qualifying periods for receipt of various benefits
• the integrity of Australia’s tax system and information sharing with tax agencies in other countries
• the integrity of systems used to ensure that recipients are accorded appropriate levels of support, for example, that people claiming family assistance actually have families, that people claiming disability support pensions are in fact disabled, etc.
• the availability of cost-effective systems to check and monitor, to consult with, and to provide human support to, those recipients of government support who are situated in remote locations.
This last dot point is interesting given that recent advances in technology, and existing government strategy, is rapidly bridging the gap between service provider and service recipient – no matter where each is located. Note for example the following extract from the recently-released federal Digital Economy Strategy:
“The Government has also demonstrated how key services such as education and health can be delivered to regional, rural and remote communities of Australia through innovative uses of broadband. For example, the Enhancement of Telehealth in Western Australia project includes remote patient assessments, virtual mental health clinics and virtual health clinics that allow health workers, medical professionals and specialists to consult with and advise patients across the state ... Through the ConnectCare project, the installation of new software and of broadband capabilities has allowed small to medium sized aged care facilities to digitise large amounts of their day-to-day operations. Patient records are now held digitally and networked throughout the facility, allowing staff to check and update patient information anywhere in the facility at any time. The broadband capability allows residents to use videoconferencing to make contact with relatives and families regardless of their location.”
Now let’s substitute the words “Australians living abroad” for “regional, rural and remote communities of Australia”. And of course we already have access to web-based communication tools like Skype and social networking that are available – to varying degrees – right across Asia.
Should ‘in-the-flesh’ personal consultations be desirable or necessary, there is also the option of:
• basing a welfare contact officer within Australia’s embassy in those Asian countries with exceptionally large numbers of expats, and/or
• utilizing the existing network of Australian government accredited doctors in Asian countries that is used in conjunction with applications for spouse visas, etc.
It really is quite untenable to require the frail aged and severely disabled to make the arduous journey to Australia every few months simply so that a departmental officer can tick a box. Bueller? Bueller?
Another important matter that I would like to address is the need for access to good quality aged care facilities. Issues associated with the cost, standard and availability of such facilities and services in Australia have been well-publicised, and most would recognized the current situation as being a far from ideal. Further, it would seem that building and operating high-quality aged care facilities is simply not financially viable in Australia at the present time. Indeed it may never be feasible in the absence of massive additional and ongoing injections of government funding. Perhaps there is a better way?
Whilst aged care facilities have not traditionally been a part of the Asian cultural landscape, we are now seeing the emergence of this type of venture – partly to satisfy the demand from western retirees and partly due to changes in Asian society. This could most certainly be a win/win situation for all concerned, but will only be of benefit to many Australians if they are permitted to continue to receive government support whilst living overseas.
To give an example of the difference in cost, consider Dok Kaew Gardens. This new two-stage residential aged-care facility in Northern Thailand is pictured below. The cost of a private room in the low-care wing is THB24,000 per month (approx AUD26 per day), and THB35,000 per month (approx AUD38 per day) in the medium-care (dementia) wing. This is about a quarter of the cost to the Australian government of providing a place in an Australian aged care facility (comprising annual subsidy plus capital financing costs). Alternatively, consider the plight of Australians whose assets/income are in excess of the Australian means-test, and who pay around $100 per day, plus an accommodation bond of up to several hundred thousand dollars.
Australia's International Social Security Agreements
Australia has 27 international social security agreements, but only two of which are in Asia. It should come as no surprise that these are with the more affluent nations of Japan and South Korea. These agreements are said to “help to cover gaps in social security coverage for people who migrate between countries. Responsibility for social security is shared between the countries where a person has lived between certain ages, and they may be able to receive pensions from both countries. Usually, each country will pay a part pension to a person who has lived in both countries.”
The benefit of these agreements from the perspective of the welfare recipient is that they:
• allow people to add together periods of social insurance (or residence in some cases) in an agreement country together with periods of Australian residence to meet the minimum qualifying residence periods for an Australian pension or a pension from the agreement country.
• overcome payment restrictions by the agreement country based on citizenship or country of residence, and sometimes
• enable recipients to lodge a claim for a benefit under an agreement while living in a country other than the two countries that are party to the agreement.
Given the very limited social welfare systems in many Asian countries and other factors, reliance on negotiating further such agreements may not be a viable solution to the problems discussed in this submission. Although in saying this, the major obstacle in some countries might be as much political as it is economic in nature. A case in point is Thailand, which garners very substantial revenue via expenditure by expats and international tourists, and through foreign investment generally.
Current developments in Britain
Other countries are also grappling with issues related to the fading significance of international borders, as well as the provision of social welfare in ageing populations. Indeed it is my view that this issue is sure to become a matter of considerable significance affecting people and governments in many western countries.
Interestingly, whilst finalizing this submission I happened upon a discussion in an online expat forum in which I noted a reference to a British newspaper article entitled “Why has Britain turned its back on expats”. The article was written by John Markham the director of the ‘International Consortium of British Pensioners’. This lobby group fights for the rights of pensioners living overseas, and maintains a web site which contains a great deal of information relevant to this issue. The Telegraph article, and the many comments subsequently contributed by readers, can be accessed at:
www.telegraph.co.uk/finance/personalfinance/offshorefinance/9080075/Why-has-Britain-turned-its-back-on-expats.html
The original forum discussion at www.thaivisa.com/forum/topic/534898-british-ex-pat-pensioners received 2,000 views in the first day and a half online. A related discussion thread was started soon afterwards at www.thaivisa.com/forum/topic/535277-you-think-thailand-is-bad-try-the-uk-pensions-lot. That discussion thread received 92 replies and well over 800 views in its first six hours online. This is clearly an issue of considerable concern to many western expats in Asia.
One extraordinary point of difference between Australia and the UK is that almost half of Britain’s aged pensioners choose to live overseas. Despite this and other differences between the two welfare systems, it is interesting to note that there are also significant similarities. These include the strength and the polarization evident in public sentiment, the consensus that pensioners living offshore lessen the financial burden on the community, and each respective government’s illogical and short-sighted approach to managing the issue.
Action that now needs to be taken to address this situation
1. Undertake a major review of the Government’s position on the issue of residency and portability of benefits
Identify those federal government regulations and procedures that restrict the ability of Australian citizens to undertake extended stays and/or reside in Asian countries, and then undertake a review of each. The aim of the review should be a comprehensive overhaul of the Government’s position on this matter, with an analysis of the cost and benefits of alternate future courses of action, and finally outlining a recommended course of action based on a consistent and coordinated whole-of-government approach.
Some of the key stakeholder agencies would include:
Department of Social Security/Centrelink/Family Assistance Office
Department of Families, Housing, Community Services and Indigenous Affairs
Department of Immigration and Citizenship
Department of Veterans Affairs
Department of Foreign Affairs and Trade, and the
Taxation Department
2. Further enhance the provision of government services and support for Australians remote from agency shop-fronts, including Australians travelling or based overseas
Each agency to undertake a review of the range and standard of service it provides to Australian citizens outside Australia. Outcomes of this exercise might include enhancements to web site functionality, adopting service standards in relation to answering email enquiries, providing call-centre staff trained to provide advice specific to the needs of Australians overseas, as well as the provision of an international free-call service.
3. Interim measures to be considered whilst awaiting the implementation of recommendations arising from the proposed major review
3.1 Relax and standardize Australian residency criteria: The residency requirements related to time spent within Australia should be brought into line with the current requirement for those entering Australia and granted “permanent residency”, viz. Australian residence is recognized when individuals spend at least two years within Australia (cumulatively) within each successive five year period.
3.2 Establish greater clarity and uniformity in terminology: At present the definition of terms such as “residency”, “holidays”, “short trips”, “visit” and “living overseas”, varies across agencies, is frequently ambiguous, and thus is subject to differing interpretations and often leads to costly administrative appeals.
3.3 Strive for the consistent and uniform application of existing regulations within each agency: Greater efforts to be made, by all relevant agencies, in achieving uniformity in the implementation of existing policies applying to the portability of benefits, and the needs of Australians overseas, across all staff within each respective organisation.
