Ausi expatriates pounded by court ruling

[ausibattler]

Local media in Australia confirmed today  that more than 250,000 expatriate British pensioners have lost a legal battle to receive the same pension as seniors living in the UK.

A ruling by the European Court of Human Rights means that state pensions from Britain will not rise despite a cost of living increase and a decline in the value of the pound. Joint pensions are now locked in at 150 pounds per week. The British Government is being accused of being miserly betraying hundreds of thousands of people entitled to a full pension rise.

Whose next?

[Russethouse]

 While I really think its all wrong and the increases should be paid, the people in this situation were aware of it when they decided to emigrate and in a perfect world should/would have taken it into their calculations.

What are the arguments for treating pensioners in France or Spain any differently ?

[Bugsy]

[quote user="Russethouse"]What are the arguments for treating pensioners in France or Spain any differently ?[/quote]

Index linking applies only to countries having reciprocal agreements with the UK.

Strange that Australia isn't though.

[Pommier]

I think it's terrible that pensioners in (mostly it seems) Commonwealth countries don't get the increases in pension. They paid in and ought to be entitled to a full pension. I heard that UK pensioners in the USA do get the increases (as they ought), but I'd have thought that people who have moved to Commonwealth countries have even more entitlement.

[Iceni]

If having the full pension + annual increases is important to you do not choose to emigrate to a country where this is not the case.  The present system may not be fair but it is well documented.

John

[allanb]

The "increases" that we're talking about are index-linked, which means that they're not real increases: they are only preserving the real value of the pension, which will otherwise fall because of inflation.

Everybody knows this, but the UK government continues to defend the practice on the grounds that the country wouldn't be able to afford the increases.  The truth is that if your real pension income is falling, the real cost of paying it is also falling.  So the UK is making a steady profit out of the fixed pensions it pays in Australia (and Canada and other countries).

It's a form of cheating.  It may have been announced at the time, but that doesn't justify it.     

[krusty]

It is not fair , we all appear to agree but the case has been taken to court now , what more can be done ?

My wifes oap increase this year is about £2 a week .

[NormanH]

What has 'European Court of Human Rights' got to do with Australia?

[allanb]

[quote user="NormanH"]What has 'European Court of Human Rights' got to do with Australia?

[/quote]

Nothing.  It's a claim by some citizens of an EU country against their own government.  It shouldn't make any difference where they live now - although the court has apparently decided that it does.

(Some of them, I suppose, may have changed their citizenship after emigrating, but as far as I know that wasn't an issue in the case.)

[Russethouse]

I wonder what happens if a similar situation arises in other countries, for instance Spanish and Portuguese people may go to live in South America ?

[allanb]

It's so completely absurd that I wouldn't be surprised if the UK is the only country that does it.

In the only two cases that I know about, state pensions are paid without any discrimination based on where the recipient lives (and in both cases the pensions are indexed).

[Russethouse]

 A couple of years back our plumber emigrated to Canada, as far as I could tell his contributions went toward his old age pension on a pro rata basis at the rate it was when he left. He was 45 and felt he had enough time to makeup the money and be entitled to a pension in the Canadian system, but there  was nearly 20 years of contributions stagnating !

[ausibattler]

Of the 1.1 milion expat British Basic State Pensioners worldwide no less than 545 thousand have their pensions frozen at the level at which they started to draw them in their country of residence.
The other 565.000 who reside within the European Union or 15 other countries, including the USA, with whom there is a reciprocal agreement, have their pensions indexed annually, as if they were resident in the UK.
This is against all that Britain has stood for over the centuries in terms of Morality, Justice and Fairness.

All expat recipients of the Basic State Pension as British citizens lived, worked and paid their mandatory contributions to the National Insurance Fund in exactly the same manner as recipients resident in the UK.
They are therefore surely equally entitled to full British Basic State Pension rights.

It is commonly held that migrant recipients of the British Basic State Pension do not pay UK taxes
and are not contributing to the UK economy.
How many of them would actually have an annual income over the tax threshold ?
In reality British Pensions are paid out of the contributions made to the National Insurance Fund
in each working year.
During their working lives expat pensioners paid their full share towards the cost of all pensioners of their day
in the full expectation that they would receive the same treatment when they retired.

Frozen:- Canada,Japan,New Zealand

Indexed:- USA, Germany, Philippines

Where is the logic in it?

 

[Chancer]

The logic, if not the justice, is that the U.S.A, Germany and the Phillipines have reciprocal agreements with the UK whereas Canada, Japan and New Zealand do not.

Why single out Germany from all the C.E.E. countries?

[allanb]

[quote user="Chancer"]The logic, if not the justice, is that the U.S.A, Germany and the Phillipines have reciprocal agreements with the UK whereas Canada, Japan and New Zealand do not.[/quote]

That is not logic; it is theft.

The UK is saying to its citizens at retirement age:

"You have paid the necessary contributions to qualify for the standard state pension, which is an index-linked annuity.  If you remain in the UK, or if you go to live in (e.g.) France or Spain, that is what you will get.

However, if you go to live in (e.g.) Australia, your pension - in real terms - will be reduced each year.  This is a swindle, but we can get away with it, because we have no agreement with the Australian government to maintain the indexing adjustments."

[NormanH]

"During their working lives expat pensioners paid

their full share towards the cost of all pensioners of their day

in the full expectation that they would receive the same

treatment when they retired."

But then they decided to go and live in a country which does not have a reciprocal agreement with full knowledge of the fact.

This was not decided retrospectively.

I agree that it is not fair, but they were not compelled to move to one of these countries either.

[Chancer]

The UK old age pension is neither an annuity (thankfully) nor index-linked (sadly).

[Thibault]

The UK National Insurance system has never been run on the lines of "...I shall get out of it what I paid into it...."  otherwise the people who retired within a few years of the system being set up in the first place would not have received much in the way of pension.

As other posters have said, this arrangement has been known for many years and the people who went to live in those countries affected knew about the situation.  They cannot claim (and I don't think they have tried to do so) that it was a sudden retrospective arrangement.

[bigears]

Hi

I thought it was a mr brown who removed the indexing for these countries when he was chancellor, I might be wrong.  My wife and I would like to end our days in nz, we will have to accept that we will not receive any further index linking of our pensions.  What is worse is the effect of currency fluctuations the current value of the pound against the nz and os dollar is horrific.  The world view of sterling is very negative. 

[PaulT]

[quote user="ausibattler"]

Of the 1.1 milion expat British Basic State Pensioners worldwide no less than 545 thousand have their pensions frozen at the level at which they started to draw them in their country of residence.
The other 565.000 who reside within the European Union or 15 other countries, including the USA, with whom there is a reciprocal agreement, have their pensions indexed annually, as if they were resident in the UK.
This is against all that Britain has stood for over the centuries in terms of Morality, Justice and Fairness.

All expat recipients of the Basic State Pension as British citizens lived, worked and paid their mandatory contributions to the National Insurance Fund in exactly the same manner as recipients resident in the UK.
They are therefore surely equally entitled to full British Basic State Pension rights.

It is commonly held that migrant recipients of the British Basic State Pension do not pay UK taxes
and are not contributing to the UK economy.
How many of them would actually have an annual income over the tax threshold ?
In reality British Pensions are paid out of the contributions made to the National Insurance Fund
in each working year.
During their working lives expat pensioners paid their full share towards the cost of all pensioners of their day
in the full expectation that they would receive the same treatment when they retired.

Frozen:- Canada,Japan,New Zealand

Indexed:- USA, Germany, Philippines

Where is the logic in it?

 

[/quote]

I assume that the logic is that those people from countries that do not have reciprocal agreements and have moved to the UK may receive various benefits from the UK that would not be paid if their pension was index linked and this paid by the country in which their pension exists. Therefore, those who have emigrated from the UK should be looking to the government of their chosen country to top up their pension.

It is quite plain that the UK is perfectly happy to enter in to reciprocal agreements so it is down to those who have emigrated to the likes of Australia to petition the government of their chosen land to enter into a reciprocal agreement.

Paul

[allanb]

[quote user="Chancer"]The UK old age pension is neither an annuity (thankfully) nor index-linked (sadly).[/quote]

That's a strange statement.

It certainly is an annuity: it is a series of payments which will continue until I die.

It certainly is index-linked: it is adjusted each April.  Admittedly it's not easy to find out which index is used, but the majority view seems to be that it's the annual increase in the RPI as calculated for the previous September.

That is, unless you live in Australia, etc ... (now please return to page 1).

[Mr Coeur de Lion]

[quote user="allanb"][quote user="NormanH"]What has 'European Court of Human Rights' got to do with Australia?
[/quote]
Nothing.  It's a claim by some citizens of an EU country against their own government.  It shouldn't make any difference where they live now - although the court has apparently decided that it does.

(Some of them, I suppose, may have changed their citizenship after emigrating, but as far as I know that wasn't an issue in the case.)
[/quote] Australia allows dual citizenship. You don't change your citizenship, you just add to it.

[Quillan]

I thought this was to do with where you are 'resident' on the day you first draw your pension i.e. if you are resident in the UK the day you receive your first pension payment then emigrate the next day your pension was index linked. If you emigrated the day before your first pension payment then it wasn't or have I misunderstood?

[ausibattler]

Australia's former bilateral social security agreement with the United Kingdom was terminated by Australia with effect from 1 March 2001

because the UK refused to index pensions it pays to British Expats in Australia. Australia was effectively subsidising the UK National Insurance System

The UK acknowledged the inequity of its policy, but was unwilling to index because of the high costs this would involve!!

  Australia has for many years since tried to persuade the UK to change its position and amend the Agreement to provide for indexation. The UK has refused, and continues to refuse, even though it indexes the pensions of former UK residents living in a number of other countries.

 People have the right to plan for their retirement without the threat that the rules and goal posts will be changed at a time in

their lives when they have little capacity to change their circumstances or structure of their income support arrangements.

 

[bigears]

politicians can and do change the rules without due consideration to time issues.  For example if the tories get in I will, if I live long enough ( just over 6 years time)  have to wait one year longer to draw my old age pension, that will cost me £5000 or so.  Life unfortunately is not fair.