Retirees living abroad face Pension Supplement cut

Australians who have retired overseas will see a reduction in their pension payments, following a Federal Government decision to stop paying part of the Pension Supplement to people living outside Australia for extended periods.

The changes, which took effect on 20 September 2026, were announced in the Federal Budget under a measure called Better Targeting the Pension Supplement.

While the government says the reform will make the system fairer and more sustainable, some retirees living overseas will lose up to $30.70 a fortnight from their payments.

The Age Pension itself is not being abolished. Eligible pensioners will continue to receive their main pension payment under existing overseas payment rules. The change affects only the Pension Supplement, an additional payment that was introduced as part of pension reforms in 2009.

According to the Department of Social Services (DSS), the Pension Supplement was created to help cover several Australian living costs, including the former Telephone Allowance, Utilities Allowance, Pharmaceutical Allowance, and a GST Supplement.

The Government argues that the basic component of the supplement was primarily intended to compensate pensioners for Goods and Services Tax (GST) costs.

The argument is that people living overseas permanently or for lengthy periods are generally no longer paying Australian GST on day-to-day expenses and therefore don't face the same costs as pensioners living in Australia.

The Federal Government says the measure is expected to save taxpayers around $218 million over five years and about $63.8 million annually thereafter.

Under the current rules, pensioners who travel overseas for more than six weeks, or who move overseas permanently, continue to receive the Pension Supplement's "basic amount" indefinitely.

Currently, the maximum amount of the pension supplement is $88.20 for singles and $66.50 for each member of a couple. $30.70 of this is the basic amount, for singles, and $25.30 each for couples. This forms part of the whole pension payment, currently a maximum of $1,237.70 for singles and $933 each for couples.

From 20 September, that basic amount is no longer payable after 12 weeks overseas or after a permanent move overseas.

At the same time, travellers will be allowed to keep receiving the full Pension Supplement for up to 12 weeks overseas, rather than the current six weeks.

Changes at a glance

Rules before 20 September 2026 

Time overseas	Age Pension base rate	Pension Supplement (basic amount)	Pension Supplement (remaining amount)
0-6 weeks	Yes	Yes	Yes
7-12 weeks	Yes	Yes	No
13+ weeks	Yes	Yes	No
Permanent move OS	Yes	Yes	No

New rules from 20 September 2026)

Time overseas	Age Pension base rate	Pension Supplement (basic amount)	Pension Supplement (remaining amount)
0-6 weeks	Yes	Yes	Yes
7-12 weeks	Yes	Yes	Yes
13+ weeks	Yes	No	No
Permanent move OS	Yes	No	No