What is a retired person visa?

The name misleads people in both directions. Retirees assume they qualify because they have retired. Younger people assume they cannot apply because they have not.

Neither is how the category works. It is a financial test with a misleading label.

What it is

Section 20 of the Immigration Act 13 of 2002 provides for a retired person visa, issued to a foreigner who intends to retire in South Africa, either permanently or for a season each year.

The word "retire" in that sentence describes what the visa permits you to do, which is to live here without working. It is not a condition that you have ceased employment somewhere else, and it is not tied to any age.

The financial test

The applicant must satisfy the Department that they have, and will have, one of the following:

A pension, irrevocable retirement annuity or retirement account producing at least the prescribed monthly amount.

A net worth, or a combination of assets, capable of realising at least that monthly amount.

A combination of the two.

For a retired person the prescribed minimum is R37 000 a month. That amount is determined by the Minister by notice in the Gazette and is adjusted from time to time, which is why it should be confirmed against the current notice rather than against any article, including this one.

Three points about how the test operates.

It is per applicant. A couple applying together each need to meet it, not jointly.

It is about the income the assets can produce, not just the assets. A net worth figure has to be shown to realise the monthly amount. A valuable but illiquid asset that produces nothing does not do that on its own.

It has to be documented. Bank statements, pension or annuity statements, investment portfolio statements, and where net worth is relied on, a certified valuation of the assets and evidence of the income they generate.

There is no age requirement

This is the feature that surprises everybody.

A forty-year-old with an investment portfolio that reliably produces the prescribed income qualifies on exactly the same basis as a seventy-year-old drawing a pension. The Act asks whether you can support yourself without working here, not how old you are.

That makes the category attractive to people who would not describe themselves as retired at all: those with passive income from property or investments abroad, those who have sold a business, and those who want to spend part of each year here without an employer or a business visa.

How long it lasts

A retired person visa may be issued for a period not exceeding four years at a time. It is renewable, and renewal turns on the financial requirement still being met at the time of the renewal application. Our guide on renewing a South African visa sets out the timing, which is earlier than most people expect, and the consequences of an application still pending when the visa expires.

Because the term is long and the renewal is on paper, keep the financial records continuous. A four-year gap in bank statements, or an annuity that lapsed in year two and was replaced by something less certain, is what produces a refused renewal.

What it does not allow

Work. A retired person visa does not authorise employment or business activity unless work is specifically authorised on it. A holder who wants to work needs a work authorisation or a different category, and our guide on which visa you need to work in South Africa compares them.

Automatic permanent residence. The visa is temporary. Permanent residence on the basis of retirement is a separate application with its own financial requirement, and our guide on permanent residence and the permanent residence and citizenship checker set out the routes.

Public healthcare or social assistance as of right. Applicants should expect to hold medical cover, and the financial test exists precisely because the holder is not to become a charge on the state.

The documents

Beyond the financial evidence, an application typically requires:

• a valid passport with sufficient remaining validity
• police clearance certificates from every country in which you have lived for 12 months or longer since turning 18
• a medical report and a radiological report
• proof of medical cover or the means to fund it
• a marriage certificate or proof of the relationship where a spouse or partner applies with you
• the application fee

Police clearances are the document that most often delays or derails the application, because they come from foreign authorities on their own timetable. Order them first. Where a clearance genuinely cannot be obtained, our guide on section 31(2)(c) waivers explains the mechanism for having a prescribed requirement waived for good cause, and what it takes to show that.

Where to apply

Ordinarily from outside South Africa, at the mission in your country of residence or through its visa facilitation centre. Whether the application can be made or a change of status effected from inside the country is restricted, and our guide on changing your visa status from inside South Africa sets out the general rule.

A person already here on a visitor's visa who decides to stay should not assume they can simply apply for this category before the visitor's visa expires. Check the position first, because an overstay produces an undesirability declaration that no amount of income cures, and our guide on overstaying your visa sets out how quickly that happens.

Bringing family

A spouse or life partner and dependent children can apply to accompany the holder. Their applications are assessed alongside yours, and the financial position has to be shown to support all of them.

Where a relationship is the basis for a dependant's application, the evidence of the relationship matters as much as the money. Our guides on spousal visas and relative's visas deal with the proof that is expected.

Buying a home here

Most people on this visa intend to own where they live, and three points are worth knowing before the offer to purchase.

Foreigners may own property in South Africa. The visa does not change that, and owning property does not by itself satisfy the visa's financial test, which is about income rather than assets you live in. A paid-up house is not the same as a net worth realising the prescribed monthly income, because it produces none.

Finance is harder for a non-resident. Banks commonly require a substantially larger deposit from a buyer who is not a permanent resident, and some will not lend at all against a temporary residence visa. Budget on a cash purchase or a large deposit rather than assuming an ordinary bond, and read our guide on what happens if a bond is not approved before signing an agreement that depends on one.

Exchange control follows the money. Funds brought into the country to buy property should be recorded as such when they arrive, because that record is what allows the proceeds to leave again when you sell. Non-residents who cannot show how the purchase was funded have difficulty repatriating. The conveyancer and your bank both need to know you are a non-resident at the outset, not at the end.

Our guide on transfer costs and the transfer costs calculator set out what falls due on a purchase, none of which differs for a foreign buyer.

Tax, briefly

Living in South Africa for extended periods has tax consequences that are separate from immigration status and are routinely overlooked by people who arrive on this visa.

Physical presence tests can make you a South African tax resident whatever your visa says, with consequences for worldwide income. Foreign pensions and annuities are treated in particular ways, and double taxation agreements with your home country may or may not help. Take tax advice before the first year is out rather than after the first assessment arrives.

Worked example

This example is illustrative. A 52-year-old from Germany sold her share in a business two years ago. She has no pension yet, but she holds an investment portfolio that produces a documented income comfortably above the prescribed monthly minimum, and she wants to spend most of the year in the Western Cape.

She is not retired in any ordinary sense and she is nowhere near retirement age. Neither matters. She applies on the basis of a net worth realising the prescribed income, supported by portfolio statements over three years and an accountant's letter setting out the income actually produced.

She orders her German police clearance first, because it takes longest. She obtains the medical and radiological reports, arranges medical cover in South Africa, and applies from Germany. The visa is issued for four years.

In year three she checks the current prescribed amount in the Gazette rather than relying on the figure from her original application, and she keeps every portfolio statement in one file, because her renewal will be assessed on whether the income is still there.

What she does not do is take a consulting engagement for a Cape Town client in year two. Her visa does not authorise work, and a breach of that condition would sit in her immigration history when the renewal is assessed.