OzTennis

As the BAPA website says:

OPEN LETTER TO ALL CANDIDATES IN THE FEDERAL ELECTION

Are you aware that Britain is costing Australian taxpayers over $100 million a year by denying its pensioners living in Australia annual indexation for their UK state pensions which they have already paid for by their mandatory contributions in what is a state superannuation system?

Do you agree that the Federal Government should escalate pressure on Britain to remove this imposition on Australian taxpayers?

When Britain grants equal treatment for all its pensioners the Australian economy will also benefit by an additional annual input of $500 million.

Are you aware that despite Britain's intransigence on this issue the Australian Government indexes the pensions of its nationals every six months, wherever they choose to live?

New Zealand, South Africa and Canada are other countries where British pensioners are similarly disadvantaged, yet those in Europe, the United States, Turkey, Israel, Bosnia and the Philippines and many other countries receive the same indexation as pensioners in the United Kingdom. Do you not believe that Australia should be pro-active in seeking parity of treatment for all British pensioners?

We call upon all candidates to show support publicly for the plight of over 220,000 British Pensioners in Australia, all of whom have an Australian vote, while striking a blow for the Australian taxpayer?

Authorised by the British Australian Pensioner Association Inc
Written by B E Havard (President of BAPA)
Box 35, Christies Beach, SA., 5165
Web site: www.britishpensions.org.au


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If you would like to be kept informed and to share your views and ideas with other British pensioners, then join the free e-mail group [bep], just send the blank e-mail form, or 410 sub Visa holders might like to Join BERIA.

For your assistance we have prepared some useful information for pensioners and anyone heading towards that situation. A click on "Pension Guidelines" will take you to them.

People interested in our letter writing campaign should take a look at "Guidelines for letter writers."

OzTennis

Phoenixuk2oz

Hi OzTennis

I don't for one minute profess to know anything about this topic so am not qualified to say too much However [there's always one of these]...

why would I [or anyone else] who moves over to Aus be unfairly costing the Australian governement? I would have paid into the Australian economy from the time I left the UK would I not? And a UK pension [even if granted the full amount when I left UK] would not necesarily be of any use if not indexed in line with Australian pensions?

A question if I may OzT: Would the reverse occur i.e an Australian citizen who leaves Aus to live in UK...would they receive a UK or Aus pension or a mix of both?

Interesting topic...sadly

kirsty&al

Hello,

Don's fairly much given you the main picture, that is, your pension is not frozen until it starts paying out.

Other things to note.

It is worth getting an assesment done (look at the DWP website for links). If you have not paid contributions for one quarter of your potential working life then you don't get the state pension. This is typically about 12-14 years (can't remember exactly) but does get reduced for people doing home responsibilities. Fortunately the govt pays your contributions if you went to college or were on the dole. Also if you are not quite there, you can make some voluntary contributions for a number of years after you leave.

The Australian pension is a gift of the state and is at the discretion of the state: it has no link to any money you have paid. There are certain conditions you need to meet to get a state pension one of these being a means-test, but does include other things, for example, being of good character (hence the police check).

The Australian and UK pensions systems are completely difference concepts which render them hard to compare in the first place and even harder to compare for reciprical situations.

Finally (this could be a myth), I heard that if you went back to the UK for a couple of weeks every tax year once it started paying out then if would be indexed. If this is true, would the index increase cover the airfare?

Regards
Alistair

Phoenixuk2oz

Really useful info Alistair. Much appreciated. Thank you

OzTennis

The UK govt is 'costing' the Australian govt in a number of ways, some obvious, some subtle. The UK govt, by freezing the pensions of 220,000 people living in Australia, is shifting part of the 'burden' of looking after these people to the Australian govt.

By not sending this large sum of money to Australia the Australian govt is being deprived of taxation revenue - if this money was received, a large part of it would be spent which would provide employment and greater company profits and more income tax and corporation tax and GST etc. This money would circulate in the economy a multitude of times also and therefore it deprives federal and state governments of many times this sum in lost revenue. (this is sometimes referred to as the multiplier effect or the velocity circulation of money but we don't want to go down that road!)

I honestly don't know the answer to your last question. I am dual national and in theory I'm entitled to a UK and an Australian state pension but as I don't intend seeing out my days in the UK I haven't looked for the answer. I'm lucky in that I have the back-up of an indexed linked occupational pension and small FSAVC so that I don't have to rely on either Westminster or Canberra 'granny' to look after me and anything I did get from the state (wouldn't be much in Oz due to the means testing) would just be pocket money!

Nevertheless the freezing of the 220,000 pensions seems incredibly unjust to me and when I'm back in Oz (and now in this forum), I'll be doing all I can to try and reverse this.

OzTennis

anya4oz

Quite right - it's just another example of the UK governments (even those who claim to be 'socialists' - shame on them) taking money fraudulently out of the people's pockets.

Sorry - even talking about this is getting my blood pressure up to the stratosphere so had better stop

Will be joining this lobby, too, you can be sure.

Anya.

OzTennis

Very good points Alistair - on your last question, return airfare say $1,500 at very best, probably more, say £600. If the old age pension was say just over £100 per week or £5,500 p.a. then the airfare is 11% of the pension. Unless there is a return to the high inflation era of the 70's and 80's I think the answer is NO, the index increase you might gain wouldn't cover the airfare.

However, on the plus side, you could always see the 'relies', get some M&S underwear, Branston pickles etc, etc, enjoy the weather and the greater quality and variety that the UK offers to make the visit more than just trying to cover the indexation. (please don't anyone turn this into an Oz vs UK argument, it's my attempt at humour and 'taking the mick' out of many a BE's thread)

OzTennis

Phoenixuk2oz

Thanks OzT
Ummm.....still not sure about the reasoning here....maybe I'll play devils advocate to gain a better understanding

You mention the UK government are "costing" the Australian government by freezing the UK pension and expecting the Aus govnt to grant pension susidies....however the UK government may argue the individual concerned has worked / paid Aus taxes since leaving the UK, has not paid any UK taxes since leaving UK.....and therefore why shouldn't the Aus govnt pay out the remainder of the pension from the individuals Aus taxes?

You also mention you would be entitled to the UK pension should you have left Aus to live in UK[regardless as to whether you would take it or not]. Doesn't this make it a reciprocal agreement between the two countries then?

Just pondering cos still dont understand the logic of the argument here

Jacko1

Not certain of the exact details but my Dad moved to Australia in 1986 and when he retired recieved Aus pension from his employers and UK pension of £140/month, having worked in UK most of his life, up until de died.

So check carefully what needs to be done and get professional advice, as this can be a complicated area.

Paul J

65 million

Thanks everyone for your comments, much appreciated.

Phoenixuk2oz

Hi Anya
I have been thinking about this too

A hypothetical question came to mind;
Lets suppose the UK don't freeze our pension. Who will pay for our UK pension since we haven't contributed to the UK economy for all the years since we left UK? [and take into consideration the ageing UK population Vs Aus?]

Also..what happens if UK don't freeze our pension...and it's only worth a fraction of the Aussie pension when we retire? i.e we've worked in Aus for say 20 years, we've paid 20 years of Aus taxes, yet our UK pension is worth say £80 per week and the Aus pension is worth £100 per week? In effect we could be poor UK pensioners Vs much wealthier Aus pensioners even though we'd brought our skills here and have also paid Aus taxes for x amount of years?

I'm not convinced the answer is to "un-freeze" the UK pension.....also not sure if the letter that was suggested is a tad unwittingly parochial

OzTennis

No be a devil by all means (sorry devil's advocate). You'll see $100 mill and $500 mill quoted in the press release. They seem to reckon that by not sending $100 mill to Oz the UK govt is depriving the Oz govt of 5 times this sum - multiplier effect.

Now I'll act as devil's advocate:

Question - why do UK pensioners in some countries get a 'frozen' pension whilst those in other countries get an indexed pension? Why wouldn't the 'you've left the UK you're paying taxes locally, you're not entitled to an indexed pension from us' argument apply to all? The counter argument is that 'I was born in the UK, paid taxes in the UK for x years, paid my NI contributions, now I'm entitled to my (indexed) old age pension like everyone else, no matter where I choose to live'. It is a superannuation scheme of sorts after all - you pay your contributions, you draw your benefits (not like Oz OAP).

Next question - why doesn't my (government) occupational indexed pension scheme say that if I move out of the UK and draw my pension it will no longer be index-linked? (answer - because I paid into the scheme, this is my entitlement). If someone leaves the UK but continues to pay NI contributions or gets a reduced old age pension by leaving the UK before they are 65 and stop paying NI cont'ns they should still be entitled to whatever OAP they are entitled to, index linked, like everyone else.

As Alistair said the 2 pension systems are different. The Australian pension is an entitlement if you are an Australian citizen and have reached a certain age, but it is means tested. It does not depend on the level of contributions you have made during your working life. The UK pension I am only entitled to because I am a UK citizen and have paid NI contributions for many years and the amount of the pension would depend on the number of years I pay my NI cont'ns. I don't think they can be regarded as reciprocal.

So, the real issue for me is the unequal treatment of UK pensioners - forget about Australia. There are 850,000 UK pensioners living abroad; 460,000 have frozen pensions, 390,000 have indexed pensions. "The injustice of the UK Government's policy is self evident. Two pensioners with exactly the same NI contribution records can receive vastly different levels of basic state pension, purely because of where they live". (to quote from Don's moneyworld link).

OzTennis

OzTennis

You are not entitled to the full UK old age pension (frozen or indexed; but that's another issue ) unless you pay NI contributions for 40 something years! The person who is leaving at 34 will have only paid NI for say 15 years at most and the pension they are entitled to will be scaled down accordingly - to put it very roughly 15/40 of £76 per week for a single person; £120 for a couple.

This is why it was mentioned that you might want to keep paying NI contributions while you are in Oz to increase your UK old age pension entitlement. I'll look up some NI 'gen' when I get a chance. I know this only too well because I moved to the UK (well Scotland I like to say) when I was 30 so I can never be entitled to the full OAP, unless I pay some extra NI contributions to make up for the years I missed. You only get back in proportion to what you paid in, except if you move to one of the countries on the 'frozen' list!

OzTennis

OzTennis

To put it in context 3% of British pensioners living in the 'frozen' countries are treated differently to the 97% living in the UK or in the 'indexed' countries. The injustice of it all!

http://www.seniorsworld.co.uk/wabep/

And here's an irony - "Ironically this means British servicemen and women who live in Germany receive more pension money than those here in Australia - Britain's ally". From:

http://www.abc.net.au/wa/stories/s1037996.htm

Geez, I'm really annoyed at the injustice of this but I'll stop short of joining the 'hooray henry's" in T-Shirts on the floor of the Commons.

OzTennis

Don

You are getting a bit confused. OT has already answered your question but let me put it another way:

1. Your UK state pension WILL NOT BE FROZEN until you start to draw your pension as a resident in Aus.

2. The NI contributions you paid whilst in the UK entitle you to SOME UK pension (unless you didn't cross the minimum threshold). The more NI contributions you pay, the more pension you get.

3. Your entitlement to Aus pension is separate to your entitlement to UK state pension.