House of Representatives- British Pensions

I congratulate the member for Kingston for bringing this matter to the attention of the House. Until it was terminated in 2001, Australia’s social security agreement with the United Kingdom benefited thousands of Australian residents who have lived and worked in the United Kingdom. The agreement honoured significant contributions made by many Australians and Australian residents to the United Kingdom’s national insurance system. Many voluntarily gave up salary throughout their working lives in good faith that their contributions would be protected in retirement.

I congratulate the member for Kingston for bringing this matter to the attention of the House. Until it was terminated in 2001, Australia’s social security agreement with the United Kingdom benefited thousands of Australian residents who have lived and worked in the United Kingdom. The agreement honoured significant contributions made by many Australians and Australian residents to the United Kingdom’s national insurance system. Many voluntarily gave up salary throughout their working lives in good faith that their contributions would be protected in retirement.

UK pensions are frozen in Australia at the time of immigration and are not indexed for inflation. UK pensions are similarly frozen in Canada, New Zealand and South Africa. This occurs despite the United Kingdom providing indexation in bilateral agreements with a range of other countries, including Cyprus, Turkey, Israel, Yugoslavia—or the former Yugoslav Republic—Bosnia, Mauritius and Jamaica. The former government allowed the UK-Australia social security agreement to lapse when it came up for renewal in 2001. This meant that the opportunity to negotiate indexation was thrown away. Given the historical links between the United Kingdom and Australia, and the ongoing close ties between our two nations, it is vital that a new agreement be negotiated.

Since the termination of the social security agreement with the UK in 2001, Australian parents wishing to join their children in the United Kingdom no longer qualify for the United Kingdom pension. As over 70 per cent of Australian immigrants to the United Kingdom are between the ages of 18 and 34, choosing to spend your retirement with your children has become a much more difficult choice to make. Similarly, prospective migrants to Australia from the United Kingdom are no longer entitled to apply for early access to Australia’s social security system. Parents wishing to join their children in Australia must now accrue 10 years of qualifying residence before they will be eligible for the age pension. As many parents do not wish to be a burden on their children, this makes the decision to reunite the family in Australia all the more difficult.

In my constituency of Isaacs alone there are over 7,000 United Kingdom born residents, many of whom may be entitled to benefits. Among these are many pensioners who, like approximately half a million other United Kingdom residents, chose to retire in more temperate climes overseas. Retiring to a home by the beach in Mentone, Mordialloc, Bonbeach, Edithvale or Chelsea has obvious attractions against the harsh winters of the United Kingdom.

Groups in Australia, such as the British Australian Pensioner Organisation, have supported pensioners who have experienced the difficulties that I and other speakers have indicated. They have provided assistance to Annette Carson, who is currently involved in a legal action before the European Court of Human Rights. Annette is a British expatriate living in South Africa who has had her pension frozen, like the pensions of many Australian residents. When her case came before the House of Lords, Lord Caswell, in dissent, expressed in no uncertain terms the view that there was no justification at all for paying some expatriates in Jamaica and Cyprus more than others in Australia and South Africa.

I believe there are no grounds for discriminating against any Australian resident simply because they choose to retire here. It is to be hoped that Annette Carson’s case will be a catalyst for resolution for the many thousands of Australian residents who may be adversely affected by the freeze on their United Kingdom pensions that is preventing them from obtaining indexation on those pensions and that the return on lifelong contributions to the British scheme will be restored to full value.

For these reasons, the Rudd government is pressing for a new social security agreement between Australia and the United Kingdom. We would all say that it is vital that a new agreement is reached. The motion before the House emphasises the importance of indexing the British pension for those migrants living in Australia. It recognises that these pensioners have made personal contributions to the National Insurance scheme in the United Kingdom and it notes that indexation also occurs in many other countries around the world. I commend this motion to the House.