Pensioner statistic that rang alarm bells
AGE pensioners living abroad will have to prove they are alive every two years,
amid fears relatives are pocketing Australian taxpayer money long after their loved ones die.
The Federal Government will unleash a "dead welfare payment" crackdown, with up to $120 million a year being paid into the bank accounts of deceased former Australians.
The move, listed as a savings measure in next Monday's Mid-Year Economic and Fiscal Outlook, will be unveiled today by Social Services Minister Paul Fletcher.
Under the reform, which will need to pass the parliament, from 2019, those aged 80 years and over will have to submit a life certificate form signed by a justice of the peace, doctor or official at an Australian embassy or consulate.
It is estimated about 6000 deceased Australians who had been living abroad are still receiving the age pension, disability support pension, widow B pension, wife pension or carer's payment.
About 96,000 Australian pensioners permanently live overseas, and about 25,000 are aged over 80 years.
It is understood the issue raised alarm bells when it was found the reported death rate of ageing Australians was much less overseas.
Age pensioners receive up to $20,000 a year, depending when they left Australia and how long they were a resident for.
The MYEFO measure is expected to save taxpayers about $200 million over four years.
Mr Fletcher said there were families wrongly receiving money that was being paid to dead relatives.
"We estimate there are several thousand cases where Australians who were living overseas and lawfully receiving a pension have now died - yet taxpayers' money is continuing to be paid out,'' Mr Fletcher said.
"On the current figures from the Australian Government's pension system, the annual death rate among Australians aged over eighty living overseas on a pension is about half the death rate of Australians aged over eighty living in Australia on a pension.
"The most likely explanation is that a considerable number of Australians living overseas on a pension have now died - but that has not been made known to the Australian Government and we are continuing to pay their pension.
"In some cases it could be fraud. In other cases it could be that the former Australian pensioner's family incorrectly think that they remain entitled to receive the pension formerly paid to their loved one.
"But whatever the reason, we have a duty to taxpayers to make sure the Australian Government is not paying a pension in circumstances where an Australian was formerly entitled to receive it but has now died."
He said the system would be simple and fair.
Pensioners will have 13 weeks to submit their form. If they don't respond their payment will be cancelled.