David Fawcett (Wakefield, Liberal Party) Share this | Hansard source

I move:

That the House:

(1)

notes that:

(a)

over 242,000 British pensioners living in Australia have their pensions frozen in value and thus not increased when the pensions in the United Kingdom (UK) receive annual increases;

(b)

this practice of freezing these pensions is wholly unfair and discriminatory: many UK pensioners living overseas do have their pensions increased annually, as expected, given their lifelong mandatory payments into the national UK scheme and in contrast, Australia fully indexes the pensions of its expatriate pensioners living in the UK; and

(2)

calls on the Australian Government to take this issue to the Commonwealth Heads of Government in Kampala in October 2007 and to urge the UK Government to end the unfairness in the current indexation of overseas UK pensions.

If you go to the website of the UK Department for Work and Pensions—the department which since June has been overseen by the Rt Hon. Peter Hain—it states that the pension service supports pensioners by helping them to receive all that they are entitled to. It talks about how it helps people with planning for their future and planning the appropriate pension. The reality is that here in Australia there are some 242,000 residents who are eligible for a UK pension, but these pensions are frozen. So, unlike the remainder of pensioners in the UK and those in many other parts of the world whose pensions are indexed on a yearly basis, these people have their pensions frozen. Sometimes they are frozen at quite low levels. There was one lady living in Sydney who at 99 years old was starting to worry about whether she could afford her funeral costs. Her pension from the UK was just £4.50 a week since she arrived here in 1969. The Australian government had done the right thing and topped up her pension. The value of the top-up to her since her arrival was in the order of some £60,000. But it should not be that way.

Unlike the system here where employers make contributions to superannuation schemes and people who have no other means may receive a pension, people in the UK are required to pay into a pension scheme. For women once they have paid in for 10 years, and for men once they have paid in for 11 years, to the national insurance fund they are entitled to a pension. That fund has grown to be quite large. It pays pensions to anyone who is entitled to them—all around the world with the exception of a few countries such as Australia, Canada, New Zealand and South Africa. UK pensioners living in other countries such as Turkey, the Philippines, the USA, Israel, the European Union, Barbados, Jamaica, Cyprus, Malta, Mauritius and others—like pensioners in the UK—have their pensions indexed. But people here do not.

The UK government have consistently said that they will maintain this discrimination because they say that they cannot afford to update the pensions and pay these people what they are owed. Again, bear in mind that, unlike our system, these people have paid into this scheme with the full expectation that they will receive the pension and that that pension will be indexed. After all, the UK Department for Work and Pensions advertises on its website that people can plan for their future knowing their pension amount and that the department is there to make sure that people get what they earn. Their argument is that they cannot afford to do it. But in January this year Christopher Daykin, who is the government actuary in the UK, tabled a report which says in paragraph 1.5 of the summary:

On the basis of the estimates in this report, no Treasury grant is required for this insurance fund—

in other words, the pension fund—

in 2007-08, as the balance in the fund at 31st March 2008 is estimated to be £43,292 million ... and so significantly exceeds one-sixth of estimated benefit payments in 2007-08—

Those payments are the benefit payments that the fund is required to hold in there. It is estimated that the growth will continue. The report says:

Estimates for the period up to 2011-12 suggest that the National Insurance Fund will continue to grow, reaching over 90% of estimated benefit payments by 31 March 2012.

The UK government is clearly in a position where it can afford to pay this benefit. It is also discriminatory in that other countries do have it paid. The UK pensions minister recently agreed that there was no need to have bilateral arrangements—that they could change their arrangements in the UK to index this if they wanted to. People are now taking this to the European Court of Human Rights to highlight the fact that this discrimination occurs. The people in Australia will benefit from this payment because Centrelink have confirmed that they will keep 60c in every extra dollar coming from the UK.

I ask the Prime Minister to take this information to CHOGM and to the new British Prime Minister and make sure that he ends discrimination against British pensioners. This is a burden on the Australian people that we have been bearing with good grace, but we would not have to bear it if the British government did what they are morally obliged to do.

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