Britain 'agrees to open frozen pension talks' with Australia
The British Government has finally agreed to open discussions with Australia about the freezing of expat pensions, Australian minister declares.
Australian minister Jenny Macklin heralded the beginning of talks on the frozen pensions issue as a "positive step' Photo: AFP/Getty Images
By Ava Hubble
2:10PM BST 05 Sep 2012
29 Comments
The British Government is to open discussions with Australia regarding the UK’s controversial “frozen pensions” policy, an Australian minister has claimed.
The alleged breakthrough came after a meeting in London last Thursday between Iain Duncan Smith, Britain’s secretary of state for work and pensions, and the Australian government minister responsible for the frozen pensions issue, Jenny Macklin.
Ms Macklin, who is the minister for families, community services and indigenous affairs, has now issued a statement announcing that during their meeting Mr Duncan Smith gave her a commitment that the British Government would open discussions about the policy with the Australian government.
She also said Mr Duncan Smith had agreed to open discussions with British pensioners in Australia about options they have put forward regarding the scrapping of the policy.
Britain's frozen pensions policy means that around 500,000 British retirees in over 100, mostly Commonwealth, countries have not had their British pensions increased in line with inflation since they emigrated. In some cases that was over 20 years ago when the basic British weekly pension was £54.15. It is now about £107.
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More than half of those expats, about 252,000, are living in Australia. The Australian government provides around 190,000 of them with means-tested Australian assistance to make ends meet. This assistance costs Australia about $A110 million (approximately £71 million) a year.
In her statement, Ms Macklin left no doubt that during her meeting with Mr Duncan Smith she made it plain that Australia was losing patience with Britain’s refusal to discuss the issue.
“All UK pensioners paid into the National Insurance Fund under the same rules, in good faith, and the Australian government believes they should be paid their pensions under the same conditions no matter where they now live,” she said.
“I made my feelings on this issue clear to my UK counterpart. He's now agreed to look at the options that have been proposed by UK pensioners in Australia – it’s a positive step forward on an important issue."
Campaigners in Australia and other countries have put forward several options for resolving the frozen pensions crisis without over-straining British Government budgets. One suggestion is that the Government “defrosts” expats’ pensions in annual stages, beginning with the granting of immediate pension parity to those pensioners who are 85 or older. That group includes British ex-service men and women who went on to contribute to the National Insurance Fund during working lives than spanned 40 years or more.
The Department of Work and Pensions however said that there were currently "no plans" to change the pensions policy.
“The UK state pension is payable worldwide but is only uprated abroad where we have a legal requirement or reciprocal agreement," a spokesman said.
“We will continue to speak to officials as part of a wider commitment to exchange views on a range of policies. The Government has no plans to change its current arrangements for uprating pensions paid abroad.”
Mr Duncan Smith's office was unable to respond in time for this article.
