Pensioners on Ice


The Howard Government has no problem gouging the last dollar from Australia’s most needy and least articulate citizens the National Welfare Rights Network (NWRN) reports a huge increase in the number of social security recipients seeking help in lodging appeals against Centrelink claims that they have been overpaid. But it does have a problem confronting an issue that could save Australian taxpayers $A106 million a year at the stroke of a pen. And all it would take is a friendly chat with a close and valued ally.

The UK’s frozen pensions policy penalises Britons who retire to Australia and most other Commonwealth countries. Their pensions are not increased in line with inflation, but remain frozen at the UK rate in force at the time of their emigration. In many cases, that was 20 years ago when the basic British aged pension was £38.70 per week (roughly $A90). It is now £82.05 ($A200).

At present, about 246,000 Britons live in retirement in Australia. The Department of Family and Community Services (FACS) has confirmed that 169,000 of those expatriates have become dependent, to varying degrees, on means-tested Australian social security assistance because they can’t survive on British pensions which have been frozen for years and, in many cases, decades.

The president of the British Australian Pensioner Association (BAPA), James Nelson, stresses that these expats are penalised even though they contributed, like other Britons, to the UK’s mandatory national pension scheme. Some are also British World War II veterans.

Pensioner lobby groups also condemn the frozen pensions policy as ‘blatantly discriminatory’ since it does not penalise Britons who retire to European Union nations and most other non-Commonwealth countries. That irony should not be lost at a time of facile euphoria surrounding Melbourne’s Commonwealth games.

It currently costs Centrelink and the Department of Veterans Affairs $106 million a year to provide means-tested Australian pensions to expat Britons impoverished by Britain’s long-standing frozen pensions policy. Even so, our Prime Minister refused to raise the issue at the recent Commonwealth Heads of Government Meeting (CHOGM) in Malta.

Protesting pensioners outside the Treasury in London.

Britain remits about $A853 million each year to its Australia-based ‘frozen pensioners.’ But Jim Tilley, chairman of British Pensions in Australia (BPiA), estimates that figure would be increased by $A440 million if penalised expats were granted the current, fully indexed British aged pension. ‘They are being short-changed and Australia is being short-changed,’ he protests.

Interviewed on ABC Radio National’s Law Report last month, Tilley noted that if the frozen pensions policy were rescinded, Centrelink would not only be relieved of the current $A106 million annual cost of providing assistance to the most needy of those impoverished expats, but the Australian economy would also be boosted by the increased incomes of tens of thousands of British retirees. A total benefit of almost $A550 million a year.

Over recent years, pensioner lobby groups around the Commonwealth have pressed their claim for parity through the British courts. After the failure last year of their appeal to the House of Lords they are now in the throes of pursuing a hearing at the European Court of Human Rights. Although the British Government claims it cannot afford to rescind the policy, Jim Tilley argues that the UK’s pension fund has a reserve well in excess of £30 billion. He also points out that Australia is saving Britain the health care costs of tens of thousands of its ‘frozen pensioners.’

Both BAPA and BPiA believe that if Tony Blair is called on to justify the policy at a press conference here, the interest of the British tabloids might be provoked. The lobby groups believe that there would be a public outcry in the UK if it were more widely known that thousands of Britons, including war heroes, were being denied regular pension increases, simply because they happen to have retired to a Commonwealth country.

The policy dates back to immediately after World War II, when Britain was facing bankruptcy and a currency crisis. But times have changed and over recent years the UK’s Department of Work and Pensions has come under increasing fire for its alleged failure to issue warnings about the policy. Victims of this failure have included British Battle of Britain pilot, Frank Warren, who died in Dubbo a couple of years ago. Like many expats he complained that he had never heard of the frozen pensions policy before he emigrated.

Before Senator Kay Patterson’s recent resignation as Minister for Family and Community Services, she often noted despairingly that over the decades a succession of British Governments had ignored Australia’s increasingly outraged calls to rescind the policy.

Yet BPiA’s Jim Tilley complains that John Howard has failed to take advantage of recent good opportunities to embarrass the Blair Government about the issue.

Tilley wrote to Howard a couple of years ago, asking him to raise the matter during his 2004 trip to the UK to attend celebrations marking the 60th anniversary of D-Day. Tilley suggested that Howard remind British politicians about the many Australia-based British expatriates who had been forced by the frozen pensions policy to go cap in hand to the Australian Department of Veterans Affairs for supplementary financial assistance. Howard responded that he didn’t think the D-Day celebrations an appropriate time to raise the issue.

Tilley wrote to Howard again this year and asked him to discuss the issue at CHOGM. In response, a senior Howard adviser, Simon Cotterell, wrote:

… you would be aware that the majority of Commonwealth member countries are not adversely affected by this UK policy. As such, we assess that they would be most unlikely to support raising this issue at CHOGM, or to support the Australian position should we choose to do so …

But according to Tilley, Cotterell’s assertion is ‘just plain wrong’ because 48 of the 53 Commonwealth countries are adversely affected by the policy.

Both Tilley and BAPA’s James Nelson suggest that the Commonwealth Games is an appropriate occasion to publicise an issue that affects 48 Commonwealth countries. We can’t rely on Howard to bring it up, but the rescindment of the policy will certainly be called for during a planned demonstration by BPiA members while Blair visits Canberra next week.

And let’s hope that our tabloids are not as reticent as our Prime Minister. Let’s hope they confront Blair about the matter while he’s here.

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