HL Deb 23 February 2005 vol 669 cc208-9WA
Lord MacKenzie of Culkein

asked Her Majesty's Government:

Why the United Kingdom does not pay annual increases in respect of expatriate retirement pensions, in line with other Organisation for Economic Co-operation and Development countries; and [HL1297]

What criteria are used to decide that annual increases in expatriate retirement pensions should be paid in some countries, such as Malta, Jamaica and the United States, but not in others, such as Australia, Canada and South Africa; and [HL1298]

Whether the matter of indexation of United Kingdom retirement pensions has been raised in bilateral discussions between the United Kingdom and Australian governments since 1997; and, if so, with what outcome. [HLI299]

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)

The UK state pension is payable to all those who satisfy the conditions of entitlement regardless of where they choose to live during retirement. Where a person is living outside the UK the state pension is uprated if there is a legal requirement or a reciprocal agreement to do so. In some respects these arrangements are more generous than those applied to the payment of pensions abroad by other Organisation for Economic Co-operation and Development countries; for example, restricting the exportability of the pension to claims made from within the country and paying exported pensions at a lower rate.

However, the non-uprating of state pensions in certain countries is the subject of an appeal to the House of Lords from a decision of the Court of Appeal which found in favour of the Government. We will respond accordingly at the hearing which is set for 28 February and 1 March this year.

Since 1997, there have been two meetings between the UK and Australian governments at which the issue of the uprating of UK state pensions to persons living in Australia was discussed.

At the first meeting on 12 July 1999, the Australian government stated their intention to terminate the reciprocal social security agreement with the UK, giving the reason as the refusal of successive British governments to uprate UK state pensions paid in Australia. Formal notification was of this given on 1 March 2000 and the agreement was terminated from 1 March 2001.

At the second meeting on 9 October 2002, the issue of uprating was raised again by the Australian government. The UK Government's response was that the position and policy on the issue remained unchanged.