Pensioners living overseas will have to provide a "proof of life" certificate every two years if they want to continue to receive welfare benefits.
The federal government wants to stop taxpayers' money being paid to dead people, with the measure to be announced in Monday's mid-year budget update.
Social Services Minister Paul Fletcher said the government could be paying pensions to 6000 deceased Australians who were living abroad.
It is estimated ceasing those payments would save the federal budget $150 million over four years.
Mr Fletcher said while the most likely explanation was Australian pensioners living overseas had died, there could also be cases of fraud.
He called the new system an important safeguard and was confident the government would be able to police it properly.
"The point will be to maintain your eligibility to receive the pension, you will need to provide the proof of life certificate," he said on Thursday.
"If you don't, we will give you a period of time but after that, then we will cease the payment of the pension."
Mr Fletcher says there are almost 100,000 Australian pensioners living abroad, with almost all of them receiving the age pension.
Until now, the government has relied on the voluntary reporting of an overseas death by a family member or friend.
"Whatever the reason, we have a duty to taxpayers to make sure the Australian government is not paying pensions to people who are no longer alive," he said.
The requirements will come into effect from July 1 next year, with pensioners living overseas to be sent a letter informing them of the changes.
Mr Fletcher said Australia's new overseas welfare process would fall into line with similar systems in the United Kingdom, Germany, Netherlands, France and Italy.
Labor's social services spokeswoman Linda Burney said the government had a track record of "messing up" Centrelink programs.
"Of course Labor does not think that the age pension should be paid to people who have died. That goes without saying," she said in a statement.
"But we don't want a situation where pensioners are left without any income because of another government IT debacle. Labor will review the details of this plan carefully."
Share
