Permanent Residence For Qualified Foreigners On Retirement

Section 27(e)(i) and (ii) – Retirement Category

Permanent Residence under the Retirement Category is identical and falls to be determined under the same requirements set out in the section on Retirement Visas under temporary residence.

Note: The DHA have unfortunately adopted an agenda to refuse permanent residence on the Retirement Category even though the applicant may already have a Retirement Visa. This remains one of the biggest challenges facing those foreign persons who have sufficient wealth to contribute to the economy in South Africa but are nevertheless refused for inadequate reasons.

It is therefore advisable to contact Legal Immigration Services for a discussion of the requirements and approach to succeed under the Retirement Category for permanent residence.

Permanent Residence based on the Retirement Category provides for permanent residence to be granted to a foreign person who qualifies in terms of the financial tests, which remain the key to success.

Our DHA to this day have failed to clearly apply this category correctly and regrettably is exacerbated by its inability to provide clarity on the basis upon which the application for permanent residence on retirement is suitably adjudicated. It is therefore imperative to remain extra vigilant in the preparation process to ensure total compliance thereby limiting the DHA to ‘find’ anything deficient in the application. Legal Immigration Services are proficient in overcoming this pitfall created by the DHA.

There are two different financial tests to qualify for Permanent Residence on the Retirement Category:

Actual Monthly Income from Pensions, Retirement Accounts or Irrevocable Annuity

The first financial test to become eligible for a South African permanent residence on Retirement Category is one which may be granted to a foreign person who is able to prove a monthly income through a pension, irrevocable annuity, or requirement account showing a minimum monthly amount of R37,000.00 to support him or herself indefinitely.

 Realisable Amount from Combination of Assets – Net Worth

The second financial test to become eligible for a South African permanent residence on Retirement Category is based on the test of “net worth” as defined in our 2014 Regulations as a “combination of assets that will realise an amount of R37,000.00 per month”.

This “net worth” test is the subject of much confusion in that it remains unclear whether the test would be to show evidence of assets in the form of banking, investments and property as a total amount or could it be interpreted to show assets that can prove a monthly amount being received like property rental.

It is the considered view of Legal Immigration Services that the “net worth” test would envisage potentially both versions above. In the recent case of Link versus Department of Home Affairs the High Court confirmed the rental income version as a valid way of proving “net worth”.

Then, it would be our view that if a lump sum of banking and investments could be presented which can be readily reduced to monthly amounts by cashing in such investments or banking on a monthly basis would similarly qualify.

There is constant disappointment for those who endeavour to apply for South African permanent residence on Retirement Category without the assistance of an expert since the two tests are in many cases (especially permanent residence) being applied without a proper appreciation of the Act and the 2014 Regulations.

Note: The Department of Home Affairs do not set an age minimum, for example,  50 years of age or older, in order to qualify for South African permanent residence on Retirement Category.