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British Pensions Blow for Expats in Australia

embraceaustraliaadmin | Thursday, March 18th, 2010 at 11:57 am

Life for British expats in Australia is not always this rosy.

Life for British expats in Australia is not always this rosy.

British pensioners who have emigrated to Australia faced a major blow this week when they lost their pensions appeal at the European court.

Pensioners have been battling for eight years to get the British government to unfreeze their pension funds and come to a similar arrangement that is in place in many other countries. At the moment if a British pensioner wants to retire to Australia, Canada or South Africa they do not receive pension increases in line with inflation as availabe to pensioners who have chosen to retire in the US or Europe.

Pensions were first frozen in 1948 following the introduction of the National Insurance Scheme, however in Europe and the USA, pensions receive annual indexation increases in line with inflation courtesy of bilateral agreements between those countries and Britain. The same arrangement is not in place for pensioners living in Australia, South Africa, Hong Kong and Canada. Currently around 540,000 pensioners living abroad are affected.

Australia used to have a social security arrangement with the UK that allowed for expats to receive benefits, including their state pensions, in Australia, this however was terminated in March 2001. That means that if a person retired in 1966, the UK pension rate at that time was £4 per week. If that person had been in Australia at the time of their retirement, their pension would remain at £4 per week, whereas in other countries the payments would be indexed in accordance with agreements between those countries and the UK and the pensioner would receive the same pension payments as a UK pensioner.

For those with permanent Australian visas there are Australian benefits they can apply for. A special benefit is available to residents of Australia who are facing hardship through no fault of their own, the qualifying period for this is two years but some benefit may be available before that time if necessary. To qualify for an Australian Age Pension, migrants need to have been resident in Australia for ten years.

The Department for Work and Pensions told the BBC that they were happy with the decision by the European court: “We note that the court has found in favour of the government. We do not therefore plan to make any changes to the current arrangements, which allow for the exportability and up rating of UK state pensions. We will, nonetheless, study the terms of the judgement carefully to ensure that we continue to comply with our obligations under the terms of the European Convention on Human Rights.”

British expats argue that they have contributed to their National Insurance all their working lives and are entitled to the same pension payments as other British pensioners. One of the organisations behind the campaign for pension rights for British expats is the International Consortium of British Pensioners. Their spokesman John Markham gave his reaction to the court verdict: “We’re very disappointed and feel that the European court was bowing to European pressures not to interfere with the internal functions of member state governments.”

He vowed that they would not give up their fight for British expats and revealed that they may turn to the advocacy route. He stated that many Australian members want them to carry on the campaign.

I asked Mr Markham what he thought of the government line that pensioners knew of the pension situation before they decided to emigrate to the affected countries, he replied saying: “I know a number of people from Australia who were not advised before they emigrated there. When you decide to emigrate it’s a long term commitment, you have to sell your house, arrange the move, etc; when they then advise the Department of Work and Pensions that they are moving, only then do the DWP tell them that their pensions will be frozen, well by then it’s too late!”

Geraint Davies from Montfort International plc has this advice for pensioners considering emigrating to Australia: “Migrants shouldn’t get spooked by this issue. They need to arrange their financial affairs in a way that this seemingly disadvantage is overcome by advantages.”

Mr Davies detailed 4 steps that anyone emigrating to Australia should take as a priority:

  1. By choosing the right visa, anyone who has lived in Australia for over 10 years can claim the Australian Age Pension, you don’t have to have worked to get the pension and Australia will top up your UK pension.
  2. This requires careful selection of visas as some Australian visas will not entitle you to the pension.
  3. For some people, thinking that they now need to top up their UK National Insurance contributions they should seek advice as soon as possible as they could end up losing out as their Australian Age pension could be reduced – it’s worked out on a case by case basis.
  4. By taking inappropriate advice migrants could be damaging their Australian Age pension entitlement by not ensuring their UK affairs are in order – even the monies you invest in your own home could affect your entitlement to an Australian Age Pension.

Montfort International Plc gives professional financial and visa advice for people emigrating to Australia.

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6 Responses to “British Pensions Blow for Expats in Australia”

Comment by carol hartle — November 16, 2010 @ 9:51 pm

i lived in australia for 17 years from 1969 until 1986 and worked for 5 years from 1969 in perth. I am now at pension age an d was wondering if i am entitled to a state pension. i now live in england.

Comment by b. grove — February 5, 2011 @ 9:19 am

we are retired and are interested to move to australia, we have relations living in perth they moved there as it then cost £10, we own our house in uk. would it be possible

Comment by Kentish Maureen — August 21, 2011 @ 1:30 pm

We want to now go to Australia. We have our government Pensions, My husband has a similar amount from a private one too. We own our own house around 180 000. Our Youngest daughter is in SA. Would it be possible for us as well.

Comment by James1 — September 11, 2011 @ 11:12 am

I live in the UK and I will be retiring to the USA shortly on an immediate family visa. Since making this decision and going through the immigration process, I have been told over and over again by Brits how much they dislike living in the UK. How the government is full of crooks, how bankers and civil servants are lining their pension pots with final year bonuses upping their pensions, how poor living conditions are, how crime is up, the NHS is falling over etc. The list just goes on. I believe that soon the UK will be a nation of paupers, perhaps when it has the living standards of India it may be able to attract work back to the country. But Dickensian UK is right around the corner. Poor pensioners, poor workers, and frankly, domination by third world people who think that living in slum conditions is acceptable. Pity what has happened to this country. I do note that Bliar and many other politicians exit asap.

Comment by yvonne musgrave — February 9, 2012 @ 5:40 pm

i moved to Australia 32 years ago i worked in England for about 10 or 11 years would i be able to get a pension from england . and if so i do i go about getting it .

Comment by Louis — March 22, 2012 @ 1:52 am

Isnt it funny that the countries where the pensions are increased are non ex-Commonwealth Countries. Talk about being two-faced!!!! The UK government will happily support asylum and benefit seekers who have not paid anything into National Insurance Scheme, but those who emigrated and have 30+ years contributions get a frozen pittance!! What a disgrace!!!

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