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23 May 2018 11:10
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  •   Home > News > International

    The pensioners retiring overseas because they can't afford Australia

    For Alan and Ros Cuthbertson, joining the buzzing expat community in Thailand has shaved 15 years off their expected retirement date. They join a growing number of Australians who've realised their pension goes further abroad.


    On a cobbled street in the south of Spain, Norah Ohrt lives like a typical Andalusian in a little white house with red flowers blooming from the windows.

    It's a world away from what her life would be like if she was still living in Australia. The 71-year-old former gallery owner says that in Perth she'd be living in state housing, surviving "on the smell of an oily rag on the Australian pension".

    With property prices and cost of living on the rise, the number of Australians retiring overseas has dramatically increased in the past 10 years, with swelling expat communities in Thailand, Spain and Cambodia.

    In 2016, 11,660 Australians over 55 permanently relocated overseas, compared to just 7,910 in 2005, according to ABS data. The most popular retiree destinations for Australians include New Zealand, Italy, Greece and Spain.

    'It wasn't that scary'

    Five years ago, Norah shipped all her belongings and her two Abyssinian cats to Martos, a charming Spanish town. Of Martos' 24,000 residents, Norah is the only Australian listed on the council roll.

    In Martos, Norah lives comfortably in a lofty three-bedroom, two-bathroom house with panoramic views of the old city.

    Rows of olive trees are stacked on the horizon; Norah's home is just 20 minutes from Jaen, the source of 20 per cent of the world's olive oil, thanks to its 66 million olive trees.

    "You can see the local millionaire olive oil baron having coffee with the man who empties the rubbish bins because they went to school together. The people here have no artifice. There's no snobbery. Everybody mixes, everybody blends in," Norah says.

    With a three-course meal costing as little as $12, annual council rates 110 euro ($175) and water bills just 120 euros ($192), Norah can rely solely on her pension to pay her bills.

    Norah renovated her $65,000 home in Martos using her superannuation and says many of her Australian friends have been tempted to do the same, with property in Spain available for as little as $20,700.

    "If you're on an Australian pension and struggling, I would strongly suggest that you look to alternatives, particularly if you have a second language that you can use.

    "The hardest part was coming into the unknown, but I've always been an adventurer, so it wasn't as scary as my friends thought it would be," Norah says.

    How do you get the pension overseas?

    Access to an Australian pension while living abroad is reliant on several factors including the length of time away, whether assets and income have changed and whether the pension is delivered through a social security agreement with another country.

    Australia has 31 agreements with countries such as Spain, Japan and Italy that allow for more cohesive social security coverage, overcoming barriers to pension payment in areas such as citizenship. Depending on a pensioner's place of residence and how long they've lived in each country, they may also be eligible to receive a split pension from Australia and their host nation.

    While settling down abroad might seem appealing, retirees should be wary of the requirements around accessing a pension.

    In 2013 there was a massive overhaul for pensioners living overseas. If a pensioner decides to relocate to Australia after being abroad, travelling outside the country for as little as six weeks within two years of returning could result in payments being cut. For this reason, the Department of Human Services says pensioners must report their travel plans through Centrelink's online portal if they're planning to move overseas or travel abroad for more than six weeks.

    "When looking at the aged pension it's always good advice to sit down with a financial planner before moving overseas permanently as everyone has different access rights and you may find yourself stranded," says Ryan Cullinan, an international financial adviser for Compare Return.

    Health care abroad

    Australians citizens living abroad for more than five years and permanent residents living overseas for more than 12 months forfeit the right to Medicare benefits. They are also exempt from paying the Medicare levy, according to the Department of Human Services.

    With health procedures often cheaper abroad and popular retiree destinations such as Thailand seeing a spike in medical tourism, losing out on Medicare might not be a deal-breaker for some pensioners.

    But in some countries, pensioners may rack up quite a debt before they are eligible to be covered under the public healthcare system. Smart Traveller advises pensioners to closely research and compare private health insurance policies, the public health care available and medical facilities before moving abroad:

    "The Australian Government won't pay for your medical treatment overseas … expatriates without appropriate insurance are personally liable for covering any medical and associated costs they incur."

    White sand, cheap living

    Freelance writer Rob Schneider, 70, was drawn to Cambodia 11 years ago by its inexpensive lifestyle and white-sand beaches. He hasn't returned to Australia since.

    After an unexpected divorce, Rob left his Avoca Beach home and began trawling through the Australian property market.

    Of the two properties he says he could afford in NSW, one was infested with termites and the other was in a shady neighbourhood that Rob's real estate agent said to avoid or he'd "get robbed".

    Rob visited Sihanoukville on a whim, hoping to challenge Lonely Planet's description of the Cambodian village as bleak and unexciting.

    Soon after arriving, Rob found his new home in the tropics, later moving to Kampot with his new wife.

    Instead of living on a "pittance" with the Australian pension, Rob decided he'd spend his retirement writing articles in Cambodia's beachside cafes.

    "If I was in Australia I'd be living alone, I couldn't afford to do anything, even if I was still freelancing," he says.

    "Here, I can afford to send two kids to school, feed six people and send money to my wife's mother."

    Retiring sooner

    For Alan and Ros Cuthbertson, retiring abroad has shaved 15 years off their expected retirement date.

    The former IT manager and disability worker have joined a buzzing expat community in Thailand, with more than 73,000 expats from around the world applying for retirement visas in 2017.

    For the past three years, the Queenslander couple have enjoyed a tranquil lifestyle in Chiang Mai, surrounded by mountains and Buddhist temples.

    "We didn't want to keep working until 65. Lots of family members are no longer with us and we might not get to that age. It just made us rethink everything," they say.

    Alan and Ros now spend half the year away from Thailand, housesitting throughout Europe and Asia.

    The pair have travelled to "41 countries and counting", documenting their trips on their website Frequent Traveller.

    Alan and Ros are often shocked by Australian prices when they return to visit their family.

    Despite the ease and affordability of Thai life, Alan and Ros say they will eventually return to their Bundaberg home, longing to set foot on our pristine Australian beaches again.

    But Norah and Rob have no desire to return, keen to avoid the penny-pinching lifestyles they would have to practise as Australian pensioners.

    While Norah misses being able to buy a decent-sized leg of lamb back home, she says she'll "die in Spain".

    "When my five years are up for this residency period I may even take Spanish citizenship," Norah says.

    "Peter Allan always said 'I still call Australia home', but I can't, I don't. Andalucía is my home now, Martos is my home."

    © 2018 ABC Australian Broadcasting Corporation. All rights reserved


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