A social security agreement between Australia and the Republic of Macedonia was signed in Canberra on 26 October 2009 and came into effect on 1 April 2011.
In general terms, this agreement provides for the cumulation of periods of work in both countries in order to generate retirement, invalidity and survivors' pension rights while avoiding double contributions for workers temporarily employed in the other country. The agreement also covers the payment of retirement and other pensions abroad without deductions or retentions and is intended to facilitate the administrative procedures.
The agreement provides better social protection for people who work or who have worked in both countries, their spouses and descendants, facilitating the mobility of residents in the countries party to the agreement and promoting commercial activities between Australia and Macedonia. Workers and their employers thus avoid making contributions to two social security schemes when temporarily relocated.
The agreement will provide access to pensions for approximately 4,000 residents in the two countries.
In terms of its field of application, the agreement covers the same areas as those included under the Republic of Macedonia Insurance Legislation on Pensions and Handicaps concerning:
- old age pensions;
- disability pensions;
- survivors' and other pensions and disability insurance benefits in the Republic of Macedonia.
It applies in the same way to the Australian legislation concerning:
- old age pensions provided under social security legislation;
- pensions provided under the various laws governing the Superannuation Guarantee (1992 Acts).
The agreement will apply to future legislation extending the existing regulations in one of the States to new groups of beneficiaries only if the state authorities involved, agree in writing. Similarly, the legislation affected by the agreement does not include other social security agreements between Australia or Macedonia and a third party state.
The agreement provides cover for individuals resident in Australia who have been subject to Republic of Macedonia legislation, as well as to all those with acquired rights as their dependents.
The signatory States agree to pay the benefits laid down in the agreement to that resident in either of them.
Workers on temporary transfer will remain subject only to the legislation of the State where they normally work as if they continued to work within the national territory. This is provided that the duration of the transfer does not exceed four years; this period may be extended. As a result of this measure, workers who move temporarily remain subject to legislation in their country of origin and are not required to pay social security contributions in the host country.
Thus, under the agreement, periods of activity can be cumulated to enable workers or their survivors to claim the above-mentioned benefits.
The Macedonian system is contributory while the Australian system is non-contributory; the agreement therefore provides for the cumulation of periods of activity in Macedonia with periods of residence in Australia. In concrete terms, periods of cover under Macedonian legislation will be assimilated with periods of residence in Australia, while periods of residence in Australia from the age of 16 and over ("Australian Working Life Residence") will be cumulated with periods of activity under the Macedonian legislation, along with periods worked in other countries which have an agreement with Macedonia. In both cases, only periods of activity of more than one year will be taken into account, and that provided that they do not overlap with others completed at the same time in the other country.
Concerning the amount of the benefits, Macedonia will pay in proportion to the periods of cover completed under its legislation. This will be based on the amount of the pension which would theoretically be paid for the total number of periods cumulated under both schemes. Australia will pay the equivalent of that country's normal non-contributory pension, adjusted to take into account the total number of years of residence in Australia minus the amount paid by the Macedonian system.
Under the terms of the agreement the mechanisms of administrative cooperation will be based on the principle of mutual assistance between the institutions, who will forward the information required by each of them to implement the agreement as quickly as possible, mostly free of charge. Thus, any exemptions, rebates and other reductions in cost applied in either State for the provision of documents will be applied by the other for similar documents. Similarly, these documents will not have to be approved by the diplomatic authorities.
To sum up, the social security agreement between Australia and Macedonia provides a framework for the protection of their retirement benefits for workers from both countries while avoiding the duplication of social security payments. The coordination of benefits payable under contributory and non-contributory schemes is of special interest.
Implementation date: 04.2011