PENSIONERS RETIRED ABROAD: UP-RATING OF PENSIONS (Hansard, 27 July 1983)

§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)

The cost of up-rating increases falls mainly on current contributors and employers in the United Kingdom, and the amount of each increase is calculated having regard to the change in the cost of living in the United Kingdom. For these reasons United Kingdom pensioners who retire abroad are entitled to receive up-ratings subsequent to their leaving the United Kingdom only where this is specially provided for under EC regulations or under a bilateral convention on social security between the United Kingdom and the host country.

Whether a bilateral convention is entered into and, if so, whether it provides for pension increases to be paid, depends on the situation when the convention is being negotiated. Among the factors to be taken into account are the benefits available under the other country's scheme, how far reciprocity is possible and the extent to which the advantages to be gained by an agreement outweigh the additional expenditure likely to be incurred by the United Kingdom. The agreement between the United Kingdom and the United States of America, entered into in 1969, provides for our pensioners in the United States to receive increases coming into effect after the date of the agreement. On the other hand, there is no such provision in our conventions with Australia or Canada, dating from 1958 and 1959 respectively. To bring all our pensioners in Australia and Canada up to the level of pension they would receive in the United Kingdom would cost an additional £63 million and £32 million a year respectively. Such expenditure is out of the question in the present financial situation.