Test case for British pensioners retiring abroad

28th February 2005, Comments 0 comments

28 February 2005, LONDON -A test case begins in Britain's highest court the House of Lords that will determine if nearly half a million Britons who retired abroad should have their pensions upgraded, potentially saddling the UK government with a bill for at least GBP 400 million.

28 February 2005

LONDON -A test case begins in Britain's highest court the House of Lords that will determine if nearly half a million Britons who retired abroad should have their pensions upgraded, potentially saddling the UK government with a bill for at least GBP 400 million.

Britons who retire to European Union countries such as Spain are entitled to collect a full UK state pension, which rises every year in line with the retail prices index every year, the british daily The Guardian reported.

But those who retire to most Commonwealth countries, including Australia, Canada, New Zealand and South Africa, do not receive the annual uplift.

Behind the apparent anomaly are rules about reciprocal social security arrangements, which extend full annual increases in payments to pensioners in the EU and the US, but not to 48 out of 53 Commonwealth countries.

The House of Lords begin hearing an appeal by Annette Carson, who emigrated from Britain to South Africa in 1989.

She continued to make full contributions to her state pension in the UK but one year after she retired in 2000, the government refused to add on the indexation increases.

Her pension is now fixed at GBP 67.50 per week, compared with GBP 79.60 if it had been up rated.

But Carson's case is by no means the most extreme. For example, a couple in their late 80s living in South Africa will receive only GBP 14 a week, while in Britain they would expect to receive about GBP 140 a week.

Nor do pensioners in the affected countries receive the GBP 200 winter fuel allowance, National Health benefits or any other support currently available to British pensioners.

Carson has already had two rulings against her and costs were also awarded against her.

But last June the appeal committee of the House of Lords granted leave to appeal to the Lords in a case that begins on Monday.

Graham Chrystie, partner at Thomas Eggar, who is representing Carson, said: "What is claimed under this case is simply parity and fair play for all UK overseas pensioners. The present discrimination against roughly half of the overseas pensioner group is morally indefensible."

It is believed that there are 540,000 "frozen" pensioners in the Commonwealth countries and 470,000 who receive full increases living in the EU, US, Barbados and Jamaica.

A British pensioner living in France or Spain receives full indexation, while someone who lives in Andorra, sandwiched between the two countries, does not.

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Subject: Spanish news

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