The Pension Problem For Australian And French Expats

Carlie: Hey there it’s Carlie with another episode of the Expat Focus Podcast. The camera’s coming back on, and I have two guests joining me for this one, so if you want to watch as well as listen, head over to YouTube and search Expat Focus – and don’t forget to subscribe.

Do you know if there’s a pension agreement between your home country, and the one you’re living in now? Do you know what you’ll be entitled to come retirement age, if you decide to stay living abroad? The lack of an agreement and what that means is what I’m discussing today with fellow Aussies Judy and Peter, a writer and a lawyer behind the group Australian Pensions in France.

Australia has 31 international social security agreements with other countries, and France has 42, but they don’t have one with each other. For eligible Aussies living in France, and vice versa, it’s a pretty big problem that’s not easy for all to overcome. Now, it’s worth noting at the time of recording this episode, Australia’s international flight caps and border restrictions, due to COVID-19, were still in place and the country had just announced a new submarine deal with the USA and UK, blindsiding France in the process.

Judy and Peter, thanks so much for joining me on the Expat Focus podcast.

Peter: No problem, thank you for asking us to come along.

Judy: Yeah.

Carlie: Now I know for myself, when I moved abroad initially back in 2013, I was in my late twenties and retirements and pensions, it really was not top of mind. Top of mind was this exciting adventure I was about to embark on. I really didn’t think about the future and I think that’s pretty common. Would you say that was your attitudes as well when you both moved abroad for the first time?

Judy: Oh, well I was over 60, so, but on the other hand, I hadn’t assumed, because I had just quickly checked and found that Australia had these agreements with, you know, up to a million countries. So I thought, oh well, that’s cool because I’m going to France because France is really big and important. So it was only after I arrived in 2015 that it dawned on me that things weren’t quite as I’d hoped. Because I’d sorted everything, I’d sold everything in France and I divided up my money and I thought, well, that will last me until X when I will get my pension. And that’ll be okay.

Carlie: You sold everything in Australia. When you moved?

Judy: I put money into a house in France, well you can do this (inaudible) Melbourne. A house in France, a bank account, super bribed my children ran away. And then great planning, but no, it didn’t quite work out that way.

Carlie: And what about for you Peter?

Peter: Look, I didn’t even think about pensions. No. It was the furthest thing from my mind. I tend to kind of look after myself and so, you know, my own finances and I just, like I’ve worked for myself for a long time pretty much. And so no, it was completely the last thing I was thinking about.

But obviously once I’ve gotten to the social security system in here, you know, and obviously because France has got a different social security system, it’s based on contributions, not based on, you know, the sort of flat pinching system in Australia.

I soon realized, well, actually it would be quite useful if my trimesters or, you know, the periods that I spent working in Australia could be counted towards French trimesters, which is the way that they work out the French pension. So then I started thinking, yeah, well that’s not really going to happen unless the social security agreement. So, voila. That’s how I got involved in the whole effort.

Carlie: And it was actually a woman’s post in another Expats in France Facebook group a couple of years ago that alerted me to your group, Australian Pensions in France.

She had recently retired and was putting out a word of warning to younger expats in France saying, hey, if you haven’t thought of this, this is the problem I’ve encountered, it’s actually really serious. I’m not going to have a lot of money for retirement because there’s no agreement between the two countries. Can you explain for me what that means for people that might not be aware?

Judy: I met somebody, was it 2016, 17? And it had occurred to her that this was the case. She’d looked through lawyers, they couldn’t find any way through it. And she actually sold her house in France and moved to Spain at an enormous cost and hassle. She shifted her whole life over the border, basically. And that’s essentially what’s facing people and of course, many people have very different situations.

It would be enormously awkward for me, more than awkward really, cause it was pretty life shifting to actually move here in the first place and to do it all again, somebody else’s systems, somebody else’s language et cetera. Or to go all the way back to Australia and promise I won’t leave in order to regain my pension rights, you know, that sort of thing.

But, you know, mine is just one of many, many stories. And most of them worse than mine, actually, the people just can’t move sometimes.

Carlie: And you mentioned Spain because the difference between Australia and Spain and Australia and France, is that Australia does have social security and pension agreement with Spain. Is that correct?

Judy: I think the last one off the blocks was Estonia, so there we go. I have nothing against Estonia, but it does seem weird.

Carlie: And so basically this means that the years you work in Australia do not count towards your retirement if you’re retiring in France and vice versa. They’re treated as two separate things and you need to be in a certain country to claim, but you can only claim the portion of your working years in retirement and the rest is lost. Is that essentially it?

Peter: Well, actually it’s a bit more complicated. So, social security agreement obviously deals with social security, which obviously itself encompasses a whole lot of different things. For Australians in France, the impact is that, so under Australia’s social security legislation, one of the requirements to get an Australian pension is residency. So you need to actually be a resident in Australia to get the pension. And that requirement is waived if there is an international agreement with a country that says otherwise.

So if you are, for example, in Spain, if you’re living in Spain, there’s a social security agreement between Australia and Spain and the social security agreements with Australia and 21 other European countries, but not France, not the UK either, by the way. And so it means that you can stay living in Spain and then apply from Spain for the Australian pension and you don’t need to be a resident in Australia as you would normally. But in the absence of an agreement, then you need to be an Australian resident.

So if you are living in Australia, however, and you’re getting the pension in Australia and you have done for some time, for example, you can actually still move overseas to a country where there is no social security agreement, like France, and still get the pension. So actually some Australians can live in France and get the pension. You lose such certain other benefits and actually we yeah, it sort of gets complicated.

But so anyways, so that’s the age pension, that’s just one. Then there’s also the disability pension. So that also doesn’t kick in, if you live in Australia and lived in France and you want to get the disability pension. But usually under social security agreements, but not always, there is a reciprocal arrangement where your years working in Australia are counted towards your years working in France for the purposes of calculating the French pension and vice versa.

So if you’re French living in Australia, the number of years that you’ve worked in France can be used. So for example, in Australia, you have to be living there for 10 years before you can apply for the pension.

So if you’re a French person and you go to Australia, (inaudible) I don’t know, say 60, and you work in Australia for another five years, then you’ve only got five years up your sleeve because you’ve only been working in Australia for five years.

But if there was a social security agreement, you could say, well, I worked in France for 20, 20 plus 5 is 25, therefore… So you can sort of see. But there’s other kind of aspects to it as well. But that’s the crux of it. Yeah.

Judy: Both sides are really done in by this lack of an agreement. And interesting situations, like one of our members who is French, but worked for 35 years in Australia and then moved back to France and he also has no pension at all.

Carlie: Wow.

Judy: Yeah. So, you know, it’s just, it is kind of silly. And in this day and age, it’s not something that immediately occurs to you is going to happen to you. And of course, you know, we’ve had some odd reactions from people back home when we raise it. But I think one reaction to me was, you’re so entitled and I thought, well, actually I’m entitled to my own pension. Actually.

Carlie: I think there’s a real misconception that people who move abroad, particularly Judy, such as yourself, approaching retirement age must be really wealthy. And that’s not always the case, is it? We’re not, you know, living in the south of France sunning ourselves in our chateaus or something.

Judy: I’m in the scrappy end of the South of France. Just want to say.

Carlie: Ok. So you have a little bit of…

Judy: I don’t, I don’t. I mean, the thing is, I have probably less than most people actually, you know, in my hand. And of course you can’t get a pension if you’re over a certain income anyway. You can’t, you know, if you’ve got too much in super or something like, you can’t get a pension, so we’re not, you know, sitting around on our yachts with a mint Julep or whatever have you do. Pasties actually, I suppose.

But no, we’re not, we’re just ordinary people. And many people have families. Some people came back to care for parents. We’re still alive, so they can’t just go. Somebody, he thought he was okay, he knew about this. He has super, he had super, and then he had a court case. And although he won the court case, his entire super, pretty well, was spent on it as a French wife and the blended family.

And there’s no way knowing they’re all picking up states and going somewhere else. And a lot of those stories, you know, people who thought they were fine and endured all sorts of crashes or random, various reasons. COVID was the last one that basically wiped them out financially. And now they’re just stuck. They haven’t got super, they thought they were self-financed and they don’t even have a pension. So, you know, yeah.

Carlie: So the Australian pensions in France collective group, lobby group, organization, whatever you’d like to call it, that was really started to try to push the governments on both sides to restart negotiations on a social security agreement between France and Australia. Because there had been talks in the past, but as far as we understand, they’ve stalled for a very long time.

So what can you tell me about how a social security agreement is generally reached between countries and what motivates them to want to do it in the first place?

Peter: I’ll jump in here if you don’t mind Judy. It’s, I mean, look, fundamentally, you know, there’s social security agreements between countries all around the world. I mean, France has something like 30 social security agreements and it’s seen as fundamentally part of international mobility, international worker mobility, you know, it facilitates, you know, cultural exchange between countries. And, you know, certainly within the EU for example, it’s really important that workers be able to move all around the European Union.

It’s not just about actually just getting welfare. It is actually about forging links between countries. So you know, there’s a web of social security agreements. They’re quite standard. I mean, they do, they tend to take quite a long time to negotiate. I have to say. I mean, the Estonia agreement for example, took around about 10 years to negotiate.

And then once they’re negotiated and concluded, which is the technical term, then, you know, can take two years to get through the respective parliaments. I mean, the standard agreement took around about two years, more than that I think actually, to get through the Australian parliament. I mean, these are treaties, international treaties, they take a while to get done.

And yes, look it is unfortunate. There was (inaudible) negotiation as we understand it, about 2011, I think. And actually when Macron went to Australia in 2008, they put out a statement saying, you know, those pledges of great friendship and amity between France and Australia and they promised to restart it again. Macron and Turnbull said that they would introduce a social security agreement that just hasn’t happened.

Judy: But yeah, it does take years and that’s one reason why every time we write, we say, and could there be an interim arrangement because we might all be dead and gone by then.

Carlie: That’s the thing, especially on the back of COVID, there are so many Australians already retired or approaching retirement age in France that for many reasons, you know, flight caps and no flights available being one of them, even if they wanted to return to Australia in order to claim their pension as an Australian resident, they can’t do it right now.

Judy: And things are iffy generally overseas, or even just cross the border. You never really know from one moment to the other, you know, what crisis is going to turn up. So moving is not an easy option at all.

Peter: No. Especially in this current circumstances, you know, this is, you know, this is something that we’ve tried to point out that, you know, the current circumstances make it even more important that, you know, the welfare of Australians abroad are taken into consideration. I mean, just returning to Australia, you know, in the current sort of COVID context is just one of them.

There are a lot of Australians still abroad and, you know, the Australian government just can’t say, oh not our problem. They just can’t do that. It’s just not acceptable. And so, you know, the current circumstances really kind of augment the need to introduce some sort of arrangement.

Judy: And then to heap one thing on the other just, well, this morning I woke up to the wonderful news that the, that wonderful much vaunted submarine deal has just fallen through and the French are really quite cross. So that relations between the country are now at an all time low, possibly.

And so it’s going to be quite hard for what might be a 1000 or 2000 Australians to say, oh, don’t look at that, just look at us, please. And that’s going to be quite hard to argue. So, thanks for that. But we will have to, I mean, which is not something you can give up on, we’re just here, we need our pensions like anybody else.

Carlie: For the time of recording this the US, UK and Australia have announced a new nuclear submarine deal. And that basically scratches a deal that’s been in place between Australia and France, for France to design and supply Australia with new subs and that deal was worth billions.

And essentially it’s gone down the drain overnight. The announcement of this new agreement and that in effect would affect relations between the two countries and therefore your efforts. I know you’ve been writing to ministers and obviously, you know, good relations between countries is essential for them to be open to these kinds of things, right?

Judy: Yeah, we have been, and I think up until yesterday, we would have thought, well, we’ve at least inched forward a bit. Cause we have, or had several supporters and sympathizers on both sides and maybe more importantly in France because we, basically got not a lot of response from the ministers in Australia, although occasionally from MPS, you get some sympathy, but in France, it’s really starting to get a little bit of a reaction.

So it’s hard to say today what kind of reaction we’re going to get. And we’ll have to use arguments, like for example, there remain business links between the two countries and therefore there remain those issues of, you know, what do people who have done business in France and would like to settle in France and vice versa, what are they supposed to do? And the inequities such as you can get a government pension while you were in France, but you can’t get an ordinary old age pension.

And they’re also service pensions. I believe that would still apply. You can get in France, but you can’t get an old age pension. So it’s all very unequal and unbalanced. And so, you know, it’s obviously something that at some stage needs looking at, but now would be good, you know?

And it’s a great pity that they’ve arrived at this impasse with their submarine deal, but there are other links between the countries that they need to look at, particular and also historical links. You know, all those, all those graveyards around the place, which are actually, which actually receive a lot of honor from the French. So it’s not as though Australia’s, you know, a non-existent country at all, you know, nobody’s ever heard of, they have heard of us. The rights that we expected in Australia, you would think could follow us after all these years.

Carlie: And I think it’s going to be an issue that becomes more and more important because there are just more and more people around the world living and working in different countries. And if you’re not an EU citizen working in another EU member state, where they do have such a clear cut and agreed to pension deal then you could encounter this situation such as Australians and French have in each other’s countries.

So Judy and Peter, I know you have been spearheading a lot of the communication with government officials to try to get this on the radar of both countries and encourage them to begin talks again. How can people best support what you’re doing and get involved?

Judy: I may have to rewrite them, but some letters that people could use as a template to approach the local deputy, if they live in France, their local Mary to get them to support them, maybe write a letter for them. You know, this is a very worthy member of our community, et cetera. And a lot of small villages are very aware who’s living there. And, you know, if you haven’t actually sort of insulted the baker, then they probably like you. So…

Carlie: Cause the baker knows the mayor and it’s probably their cousin.

Judy: Yeah, probably. Well, but the thing is too, I mean, the problem as we speak at this moment, I don’t know it might change next week, is that the French are angry with the Australians and the French are the ones who currently need to be persuaded to take us seriously and to see that there’s a future involved and to continue to support us to the degree that they have, because they haven’t knocked us back. They haven’t said we have no plans there.

They’ve said we’ve had some issues in the past but why don’t you write to this guy, which is actually quite hopeful when you think about politics. So, if as many people as possible, and I’ll put this template up on our Facebook site, if they can write to their local representatives or whoever they are and ask them to intercede with a list of ministers, which we’ll give them, just to make sure that they know that there are a number of people who are anxious. And you know, praise, France. I mean, you know, we love living here and we make sure that they know that, you know.

Peter: The other thing is too actually, this is a bit of a business issue because you know, it is about cultural exchange. It is about business relationships. A lot of Australian companies are in France. A lot of French companies are in Australia. So anybody who’s involved in one of those enterprises can certainly agitate within the companies in which they work.

Carlie: That’s a good idea.

Peter: Because once you get business involved and once business starts to make the case that this affects their investment decisions, then you know, that can certainly help the situation. And you know, there’s no doubt about it. I mean, you know, France spends a lot of money every year and so does Australia. Trying to get companies investing in their respective countries. So companies look at things like this. They look at the local regulations, they look at the conditions for their employees. And so yes, it really has more of an implication than just a cost on the government’s bounce sheet.

Judy: Which is in fact quite a small cost item. Cause there aren’t heaps of us. It’s just that there may be more of us in the future as things develop between the countries, if you allow it to develop.

Carlie: I wonder if that’s a bit of a double-edged sword, like, is it the fact that there’s only a few thousand Australians living in France affected by this contributing to the fact that it’s probably low on each country’s agenda?

Judy: Probably. Although I don’t think they realize that there are five times as many French living in Australia. You also don’t have a social security agreement and many of them won’t realize how it’s going to affect them either yet, because they’re probably younger. They may very well be younger so they don’t know, but they’re there and they will suffer. And that’s why we have the support of the recently elected Conseiller d’ Étranger, Serge Thomann, who’s actually quite keen because he represents those people in Australia. And so it’s more complicated than probably our governments actually realise.

Peter: I think a lot of it is, a lot of this is politics. It really is. And you know, I think that the Australian French relations were… There was a lot of optimism around the Australian French relations a few years ago with this Naval group, a deal that spurred a lot of hope and a picture for a new relationship going forward. Because of course in previous decades, the Australian French relationship has been quite challenged with the French nuclear testing in the south Pacific.

And also you know, the Australians weren’t very happy in the seventies with the European agricultural policy because they viewed that as, well, it is basically, it’s protectionism (inaudible) the European subsidies to the agricultural sector here in Europe. So, you know, things have been a bit rocky, the relationship. (inaudible) things were getting better, but yeah. So it is very unfortunate that this has sort of happened and I think there’s other factors too.

Carlie: Judy, I’m really curious, particularly considering at what point in life you packed up for your life in Australia and moved to France. If you knew what you know now about the lack of a social security agreement between the two countries, do you think you’d be living in the South of France today?

Judy: I think I would be, but later. Because of course I could have after, because of when I was born, I could have applied for the pension at about 66 and a half and so I would have done that. But the thing is, you know, it had come to the point where it was clear I should be moving house and it’s a much more expensive exercise in Melbourne.

And it actually occurred to me at some stage when I was just sort of gloomily surfing the net that it would in fact be cheaper to move overseas if I sold my house than it would be to stay in Melbourne, which is a really interesting situation. And, you know, it’s been great and it’s been wonderful, but I didn’t imagine this would be so complex and that my government would so abandon people, who’ve just made a choice.

And sometimes it was a choice because they met somebody, you know, or their parents lived here or whatever. Somebody’s got here, can’t move because he has cancer and he didn’t in the system here. So, you know, it’s just, there are so many stories and it’s quite ridiculous, but basically we don’t have a lot of power. We have met though some people who are lobbying for the return of the vote which could help in the future because we’re obviously powerless at the moment.

Carlie: And what about for yourself Peter? If you understood that you would have difficulties getting pension credit for the time you worked in Australia before you decided to move to France, do you think you’d be here today?

Peter: Yes, because I love France. I mean, I’ve always loved France. I came here for several holidays when I was younger, I studied here in 2012, I mean, I fell in love. I fell in love with this country and I really, really have loved my time here. I’ve been here for six years and you know, I think I sort of threw caution to the wind.

And as I said, I’ve always, you know, tried to look after myself so it really wasn’t a major consideration. I’m just sort of jumping behind this effort now because I’m here and it would make things easier, but yes, I think I still would have come.

Carlie: Well we know there’s a hard slog ahead, especially after this latest announcement about the submarine deal being kaput to get both countries engaged and deciding to take action on this issue. But fingers crossed. We can keep pushing as Aussies in France, get French in Australia behind this as well. You can head to the Australian Pensions in France Facebook group and join up to stay across all the latest activity that Judy is really spearheading and find out how you can help support.

Judy: I think that we should’ve mentioned superannuation, that’s a whole other thing.

Peter: Yes. Super and tax too, because there’s a double tax treaty between Australia and France and it doesn’t deal with superannuation and a lot of our members are getting taxed on superannuation and it’s not fair.

Judy: If that’s what they’ve got to live on.

Carlie: So look, regardless of whether you think you’ll be eligible for a government pension in the future, if you have superannuation in Australia, this is still going to be something worth engaging with. So definitely get involved.

Peter: Maybe we could have a podcast just about tax. Wouldn’t that be great fun?

Carlie: No doubt it will be our most listened to episode. Absolutely.

That’s it for this episode, to find out more and get involved in the Australian Pensions in France campaign, you can search for the group on Facebook. Expatfocus.com is where to go for specific country guides and loads of resources to help you move abroad easily. And I’ll catch you next time!