Australian expats are hoping that high-level talks between ministers may lead to the British government unfreezing their state pension payments.
Around 250,000 Australians pick up the British state pension, but the payment is not inflation-linked and in many cases is topped up by Australian means-tested benefits that cost around £71 million..
However, Australian minister for families Jenny Macklin has issued a statement following a visit to London for a summit with UK Work and Pensions Secretary Iain Duncan Smith.
She revealed Smith has agreed Britain would open talks with Australia about the issue, even though a spokesman in London said Britain has no plans to change the policy.
Hope for expat pensioners
“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,” said Macklin.
“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.”
Pension campaigners took their case to the European Courts of Justice, but lost their argument that they were unfairly treated and should have state pensions linked to inflation.
They have kept the pressure on by lobbying the British and overseas governments about the issue.
A number of proposals are before the Smith – from phasing in increased pension payments for old expats to index-linking the pensions for every country.
In total, around 500,000 expat pensioners in 100 or so countries are paid pensions pegged at the rate of the first payment – with some receiving only £7 a week, while the current rate is £104 a week.
Talks confirmed by UK
Meanwhile, expats in European Union and some other countries are paid the full state pension.
No plans are in the pipeline to change the policy, said the Department of Work and Pensions
“The UK state pension is payable worldwide, but is only uprated abroad where we have a legal requirement or reciprocal agreement,” said a spokesman.
“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.”