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Expats to Have Pensions Frozen
By Ben Hurley, The Epoch Times
UK
June 01, 2005
The Australian government has labeled as "unfair and discriminatory" a ruling by the United Kingdom's House of Lords, which supports a policy of reducing pension payments to UK pensioners living in Australia.
Under existing legislation, UK pensioners who move abroad to certain countries have their pensions "frozen" so that they no longer increase with inflation.
Family and Community Services Minister Kay Patterson said on Friday May 27 that the government believes the policy is morally discriminatory, even if it may be technically lawful.
"These people have contributed over many years to earn their pension rights. They have contributed on the same basis as people living in the UK, former residents now in all European Union countries and other selected countries such as the United States, Israel or the Philippines. Yet they are denied the same benefits," Senator Patterson said.
"There are more than 236,400 UK pensioners in Australia and over time their UK pensions become increasingly worthless, leaving Australian taxpayers to pick up the tab. About 170,000 of these UK pensioners also receive means-tested Australian pensions."
In handing down his verdict, Lord Hoffmann said that there was nothing unfair about giving different treatment to people living abroad. "The primary function of social security benefits, including state retirement pensions, is to provide a basic standard of living for the inhabitants of the United Kingdom," he said.
According to the advocacy group British Pensions in Australia, a win in the House of Lords would have been worth about $450 million to the Australian economy.
The organization encourages Australian citizens who have worked in the UK and paid into the UK's National Insurance system to take up the fight.
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