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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.

Australians planning to retire to France warned over little-known pension trap
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. 

Australians in France: How many are there and where do they live?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.

Member comments

  1. Even worse for New Zealanders. You can’t even go back and do 2 years in your country. But you could go back and spend 6 months every year there and take a holiday in France. But that puts you in the second home owner category…. no way around it unless you leave France completely and stay in NZ, or Malta or 6 other very small countries where there is an agreement with NZ.

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Pension reform, investment, new jobs – Macron unveils France’s post-Covid recovery plan

French President Emmanuel Macron has announced a series of economic measures, looking beyond the pandemic, although the much-anticipated pensions reform will be delayed until Covid is "under control".

Pension reform, investment, new jobs - Macron unveils France's post-Covid recovery plan
A nurse watches Macron's TV address on Monday. Photo: JEAN-FRANCOIS MONIER / AFP.

Obligatory vaccines and the extension of the health pass made the headlines following Macron’s live TV address on Monday evening, but the President also sketched out his vision for France’s post-Covid economy.

Some of the measures he announced represent a return to the priorities he set at the beginning of his tenure, while others have been shaped by the pandemic.

Pension reform

There had been much speculation about a return of controversial plans to reform France’s retirement system, which were shelved at the start of the pandemic.

Macron confirmed that he planned to raise the retirement age – most people can currently retire at 62, but a number of ministers have been pushing to raise the legal minimum to 64.

READ ALSO France to tackle fourth Covid wave with stricter border controls, health passports and compulsory vaccines

“Because we are living longer, we will have to work longer, and retire later,” Macron said. “Not tomorrow, not brutally, and not in a uniform way because we will take the difficulty of a job into consideration.”

The government will begin consultations with workers and employers in September, but “will not undertake the reform so long as the epidemic is not under control and the recovery guaranteed,” Macron said.

This could mean his plans are not implemented before the presidential election in April 2022.

Macron also returned to a controversial point from the 2019 reform plan which lead to widespread protests: the abolition of the country’s 42 different pension regimes, which currently mean many public-sector workers can retire early. Under the new plans, these special regimes will be abolished for new employees, but people currently employed can keep the generous exceptions.

EXPLAINED: What are France’s special pension regimes?

The plan also includes a minimum pension of €1,000 per month after a full career. “A life of work must offer a dignified pension,” Macron said.

Unemployment reform

Changes to unemployment benefits will be “fully implemented” on October 1st. The reform was supposed to come into effect on July 1st, but in June, France’s Council of State decided to suspend certain elements regarding the way benefits are calculated.

“Uncertainties around the economic situation do not allow for implementing, at this moment, these new rules which are meant to support job stability by making benefits less attractive for workers alternating between short contracts and inactivity,” that decision stated.

“In France, you must earn a better living by working than by staying at home, which is currently not always the case,” Macron said on Tuesday.

From September, the government will also launch “a massive plan for the training and retraining of the long-term unemployed”.

“We have seen during this crisis the strength of our social model,” Macron said. “It’s a jewel we need to preserve. This social model rests on one foundation: work.”

Investment plan

During his address, Macron also emphasised the importance of economic sovereignty, and said an investment plan would be unveiled in the autumn following consultations this summer. The objective is “to build the France of 2030”, and to “reindustrialise, reconcile growth with ecological production”.

“We saw during this crisis the consequences of dependence,” Macron said, calling for French and European independence with regards to technology and primary resources.

Last month, the President announced a series of measures designed to stimulate French innovation in healthcare technology.

Support for young and old

Finally, Macron announced additional support for those who have been hardest hit by the pandemic – young people “who sacrificed so much even though there was little risk for themselves”, and elderly people “who more than others feared for their lives”.

In September, the government will unveil a new revenu d’engagement (commitment-based income) for young people not in education, employment or training. This “will be founded on rights and responsibilities”. This could resemble the garantie jeunes, a monthly benefit for 16 to 25-year-olds not in employment or training, created under François Hollande’s government.

For the older generation, Macron avoided specifics. “We owe them a great humanist ambition for independence, strengthened home care, modernised retirement homes,” he said.