BAPA Newsletter

Annette Carson - The surplus revealedWhere do we go from here
BAPA plans ahead - Letter writing campaign - Getting it into perspective
Pensioner freezing anomalies - Age & sex differences
More complex scenarios - Anomalies based on residence
The Queensland petition - What YOU can do
Tax deductibility - National Pensioners Convention
10 more countries join EU
- BAPA Officers

Annette Carson & the House of Lords

The House of Lords has agreed to hear the Carson Appeal BUT they have delayed doing so until next year. The dates now set are February 28th and March 1st 2005.

One is tempted to suspect this is just another Government delaying ploy but we are assured this is not the case – it is simply because of the pressure of business that the Law Lords have to cope with. One wonders ! By then it will be the best part of three years since Annette Carson first had her case heard in the Royal Courts of Justice (?) in London.

If the Law Lords accept her appeal and say she should be awarded full indexation of her Age Pension what will happen next ?

Will the Government immediately take action to grant full indexation to all British expatriate pensioners world wide ? Or will they just award full indexation to Annette Carson, or maybe British Pensioners in South Africa ? Thus leaving those of us in the rest of the world to start the fight all over again.

Despite what Government says it cannot really be the cost alone that stops them granting 4% of British pensioners parity with the other 96%. The cost, according to the Government would be in the region of 400 million pounds a year – consider that in the light of the 29 billion pounds surplus in the National Insurance fund – enough to index all our pensions for 74 years !

The surplus revealed

This huge surplus was revealed by Government Actuary Christopher Daykin in February this year when he said in a report on the drafts of the Social Security Benefits Up-rating order 2004 and the Social Security (Contributions) (Re-rating and National Insurance Funds payments) order 2004:

 "On the basis of the estimates in the report, the level of the National Insurance Fund at 31st March 2005 will be greater than one-sixth of benefit payments in 2004-05. Thus it exceeds the minimum level that I recommend to ensure that a reasonable working balance is maintained. It will not therefore be necessary for any Treasury grant to be made to the National Insurance Fund in 2004-05."

He ended his report by stating: "However, even quite substantial alterations in economic conditions in future years should not cause the balance in the fund to fall significantly below its current level."

The current level is 27.264 Billion Pounds and by the end of 2004/05 he predicts it will be 29.633 Billion Pounds.

That’s a growth of £2.3 Billion in just one year.
Nearly 6 times the predicted cost of unfreezing our pensions.

Where do we go from here ?

If Annette Carson wins her appeal to the Law Lords we will have to wait and see what the British Government decides to do about it. If she loses we will have to examine our options.

Questions come to mind:

1) Will the British Pensioners of the world be able to raise enough money to take the case to the European Court of Human Rights ? Probably not unless we get backing from another Government – Canada has been very generous so far but will they continue to be so if the Australian Government cannot be persuaded to join in ?

2) Is Europe the right way to go? It will inevitably take more years to reach conclusion there and the result is no certainty.

3) Is there any other route we could take ? Our President, Brian Havard, has been investigating other options for the past three years.

BAPA Plans Ahead

During the recent long period of limbo caused by the delay in obtaining a date for the House of Lords Appeal BAPA has been developing a number of other strategies just in case Annette Carson does not succeed.  Our President, Brian Havard, has been employing the services of a leading, and successful, firm of Human Rights Solicitors to develop two alternative strategies.

Barristers retained by the Solicitors for the purpose have been very encouraged by the progress on these strategies but insist that the time is not yet right to reveal any details publicly.

As always, should it become necessary to put either or both of these plans into effect considerable costs will be involved.  Though we have excellent advice on the likely availability of Legal Aid we would still be required to raise considerable funds from sponsors and ourselves.  That is where we rely on your help.

Our letter writing campaign

The letter writing campaign we started nearly a year ago is having its desired effect. The bureaucrats and mandarins are beginning to give up using their most fatuous excuses.

The next stage must be to persuade the Members of Parliament to take a personal stance on the issue and stop relying solely on the party line. That’s just a cop-out.

Getting it into Perspective

The Government, advised by the Department for Work and Pensions, claims that the country cannot afford the £400 million per annum that it would have to find from limited resources if all expatriate pensions were indexed each year.

It seems like a lot of money at first - but when you view this amount against the other amounts that are expended or could be saved, or are just lost in the wash, then it is not a horrendous sum.



Annual cost in £



Annual cost of uprating pensions

400 million



Annual cost of paying pensions to expatriates in "unfrozen" countries

350 million



Average annual surplus in National Insurance Fund

1.5 billion



Benefits blunders cost up to £7 billion a year

7 billion



£13 billion legal loophole to be closed

13 billion



Taxpayers to foot EU students' bill

900 million



Benefit fraud

3 billion



Whitehall efficiency gains

12 billion



Age equalisation

4 billion



Health and Welfare savings on expatriates

1 billion


Notes to table

The annual sum has been quoted at anything between 250 million and 400 million.

Pensions are uprated for expatriates in many countries, such as USA and the Philippines. Slightly under half of expatriate pensioners get annual upratings - the rest of us are frozen

This is the annual surplus, being the excess of contributions received over the benefits paid and costs incurred, after putting some aside for a prudent reserve. It has been quoted as 1.5 billion or even 2.5 billion. Even the increase of £5 per week granted in 2001 did not halt the onward march of the surplus. Presently it stands at £30 billion - over 74 times the cost of uprating us.

One in five decisions on who should get state benefits and how much they should receive is wrong, a damning report from the public spending watchdog.

Gordon Brown will use his Budget to launch an unprecedented assault on tax avoidance schemes that are costing the Treasury £36 billion annually.

The £900 million bill for tuition fees of European Union students at universities in England will be paid by the taxpayer. The Department for Education and Skills confirmed yesterday that students from other EU countries will benefit from the government's reforms.

There has been little progress in tackling benefit fraud in the past year, according to the government's spending watchdog. In its report, the National Audit Office highlighted that £3 billion of taxpayers money was claimed fraudulently from the Department of Work and Pensions. With 2.7% of its budget lost, the NAO qualified the department's accounts for the 14th successive year.

The Treasury has revealed that the Gershon review, which aims to reduce Whitehall red tape, now stretches across £150 billion of expenditure. Peter Gershon has delivered an optimistic assessment of the possible efficiency gains which can be achieved. Details contained within the fine print of the pre-budget report also revealed that regulatory and policy making bodies are costing the taxpayer a staggering £12 billion a year. Peter Gershon has now been charged with reviewing the army of regulatory bodies which, the FT reports, "has exploded since Labour came to power."

The projected result of raising the pension age for women to 65.

Savings on not having to provide for the health and welfare of expatriate pensioners.

Pensioner Freezing Anomalies

Nearly one half of expatriate UK pensioners have their pensions uprated every year on the same basis as resident pensioners. The others have their pensions frozen - that is, the pension never increases after the first payment made outside the UK.

One example that has been mentioned is a UK pensioner in Australia who contributed to the National Insurance Scheme all his working life, got a pension of £6.75 in 1972, and has never had his pension increased with the cost of living.

There are many other strange results, all arising from the way the freezing regime is run.

Here are a few of the bizarre effects.

Age and sex differences

Adam, born in 1928, retires in 1993 with a pension of £56.10, and decides to move to Australia to be near his only child and her children. In 2003 his pension is still £56.10.

Bill, born in 1938, retiring in 2003 and moving to Australia, would have a pension of £77.45 - 38% more than Adam. The freezing system has introduced an age difference.

Cherie, also born 1938, retires in 1998 with a full pension of £64.70 and moves to Australia. By 2003 her pension will still be £64.70 while Bill, the same age as Cherie, has a pension of £77.45. The freezing system has introduced a sex difference.

Supposing that Bill had spent some time out of the National Insurance System and had a reduced pension. Let's suppose he had contributed for 37 years out of a possible 44, and has a pension of 85% of the standard rate. His pension will be £65.83. So he gets more pension than Adam even though he had contributed for fewer years.

If Cherie had stayed in Britain another 5 years, and moved to Australia in 2003, her pension would also be £77.45. But that would have meant 5 years' separation from her only grandchildren, or regular flights half way round the world to visit them.

Now these apparent age and sex differences are not deliberate results of the way the system is administered. The apparent sex discrimination will disappear for women born in 1955 and later, but will persist for women born earlier. These differences arise because the system has never been properly thought out.

More complex scenarios

When we investigate more complex cases we find the results become even more bizarre.

Take the case of Jean who emigrated with her husband in 1995. As she had contributed to the state pension scheme for 25 years she has a pension of 65% of the basic rate, £38.25 but frozen at its 1995 level.

Her cousin Joanne had not worked long enough to get a pension in her own right, but has the married woman's pension, which is almost 60% of the standard basic rate. When they emigrated to Australia in 2002, her pension was £45.20, frozen from 2002 - more than her cousin gets.

The examples above are some of the odd results thrown up by the pension freezing regime. They would not have happened if they had gone to live in Manila or Miami. But because they live in Australia their pensions are frozen. If they return to live in the UK, or go to live in New York, these anomalies will disappear. If they visit the UK, or France or Germany (but not USA) the anomalies will be removed temporarily and they will get the same pension as if they lived in Manchester - but only until they return to their "frozen" country.

Anomalies based on pensioner's
place of residence

If you live in France, your UK pension is uprated every year. Likewise if you live in Spain. But if you live in between, in Andorra, your UK pension is frozen.

If you live in the Caribbean island of St Martin, your pension is indexed if you live in the French part, but frozen if you live in the Dutch part.

It's not even a question of the affluence or poverty of the country of residence. Some indexed countries are rich, as are some frozen countries. Some in both groups are poor countries, and some are middling well-off, thank you.

The freezing regime continues because top civil servants keep on dreaming up fatuous excuses and offer these as advice to the relevant Minister. Anomalies then become absurdities.

The Queensland Petition

The following petition was presented to the Queensland Government in August 2003 – sponsored by Independent MP Peter Wellington:

"This petition draws to the attention of the House the plight of some 38,000 British Age Pensioners resident in Queensland and denied indexation for their pensions by the British Government. This denial deprives the Queensland economy of significant funds estimated at $76 million every year and the full Australian economy of close to $500 million each year. In addition it costs the Federal Government approximately $100 million every year which they pay in the form of part Australian pensions, and other benefits, through Centrelink, to many of the 224,000 British pensioners resident across Australia whose incomes have dropped to a level which entitles them to such payments, due to the intransigence of the British Government. This situation applies to all British Age Pensioners resident in 48 of the 54, so called, Commonwealth countries but not to those resident in Britain, Europe, the United States or many other more favoured countries. Your petitioners therefore, request the House to make strong representations to the British Government calling for the situation to be rectified. Furthermore we request the House to make strong representations also to the Federal Government to increase their support for the British Australian Pensioner Association Inc (BAPA) in their fight with the British Government. We further request that the House should consider moral and financial support for BAPA in their fight for parity with those British Age Pensioners who do have their pensions indexed annually."

The Premier of Queensland, Peter Beattie, replied on 27th April ‘04 in a personally signed letter as follows:

"Thank you for your e-petition seeking support for British pensioners resident in Queensland and denied annual indexation by the United Kingdom.

While I can appreciate the concerns outlined in your petition, matters relating to pensions are the responsibility of the Commonwealth Government. I have therefore written to the Prime Minister to alert him to the matters raised in your petition and to encourage the Commonwealth Government to lobby the British Government to change its position on indexation.

Thank you for bringing this matter to my attention."

Yours sincerely

Peter Beattie

What YOU can do ?

If the Premier of Queensland is willing to write personally to the Prime Minister on our behalf it seems fair to ask all our members to take some personal action as well. There are many things you could do:

Ask your local State MP to sponsor a petition along similar lines – and get signatures on it – anyone could sign, not just us.

Similarly with your Federal member.

Write your views, you can choose quotations from this newsletter, and send them to the British MP in your last constituency in England.

Use our Membership form, and make more copies, and encourage others to join BAPA.

Make another contribution to our Fighting Fund – if we are seen to continue to raise money for our fight our chances of encouraging Government support will be enhanced.

If you can distribute more copies of this newsletter don’t hesitate to ask us for more. You could send them to people you write to or give them out to anyone showing interest.

The Judges who heard Annette Carson’s first case and the Appeal indicated that the solution to our problem is Political not Judicial. We must do our utmost to shame the British Government into real action on our behalf.


A member of BAPA secured a ruling that allows a deduction for contributions to the Fighting Fund in 2002/03.

We believe that the terms of the ruling are wide enough to cover the membership fee of $20 as well as any amounts given for the fighting fund.

The amount you are claiming should not be claimed under question D8 of the tax return. It should be entered in the supplementary section of the tax return at question D15 - Other deductions - not claimable at items D1 to D14 or elsewhere on your tax return.

This question has a write-in panel in which you have to describe the nature of the deduction. Be sure not to call it a "donation". We have had advice dating back to 1992 that a donation to BAPA is not deductible under D8 because BAPA doesn't qualify as a public benevolent institution. Call it "a contribution to BAPA", and attach an explanation on a separate sheet.

You are claiming under taxation ruling TR 2000/7, as amplified by private ruling 29897. If you have a taxation agent or accountant doing your tax return, draw attention to the general taxation ruling, which is on the ATO web site but difficult to find because of the labyrinth of menus.

And this is what to say on your explanatory note (attached to your tax return)

"The deduction I am claiming at question D15 is a contribution to the British Australian Pensioner Association Inc. The activities of the association are consistent with Taxation Ruling TR 2000/7 as amplified by private ruling 29897."

BAPA disclaims responsibility for the accuracy of this information. It would be wise for you to seek independent advice from a tax agent or accountant or other professional person.

National Pensioners Convention

As an affiliate of the National Pensioners Convention (NPC), BAPA has initiated an amendment to their proposed "Towards a Pensioners Manifesto" which will be the main topic to be discussed at their Pensioners Parliament to be held in Blackpool on the 18th 20th May 2004. Last year they had Malcom Wicks, the Pension Minister, and Oliver Heald, the Opposition Pension Minister included in the debate so at least our concerns should get a hearing amongst the hierarchy.

The draft of the  "Towards a Pensioners' Manifesto" reads as follows:

"The state pensions of those expatriate pensioners living in countries not covered by reciprocal social security  arrangements with Britain should  have their pensions uprated annually in line with those pensioners living in the UK  and receive retrospective compensation"

We have suggested that it would be more factual and effective to compare our situation with the indexation granted to the favoured unfrozen expat pensioners, and bearing in mind the previous flawed judgements handed down by the judiciary based on the perceived inflated costs of universal indexation, (£3 billion quoted by Justice Laws of the Appeal Court), we think it expedient that the costs should be purely related to the cost of uprating to achieve parity and not to include any element of backpay.

We are given to understand that our proposed amendments will be incorporated into the final NPC document.

As a matter of interest the NPC tells us that the UK spends less than 5% of their national income on pensions – below half the spending of the other EU countries !

10 more countries have joined the EU

In April this year the European Union admitted 10 more countries. This will lead to the pensions of all British pensioners who choose to live in any of those counties having their pensions fully indexed annually.

In addition they will become entitled to a winter fuel allowance and other bonus payments taken from the money Britain saves by freezing our pensions.

Derrick Prance aptly ended a recent letter to Mr. Chris Pond. Parliamentary Under-Secretary of State for Work and Pensions as follows

"Our ranks grow thinner with passing years. Are we, ‘The Hero Generation who saved the world from Hitler,’( Mr. Churchill’s words) to wait for the Annette Carson Appeal to conclude in a case that will take at least another year, or more if it goes to Strasbourg? Simple legislation by a sympathetic government would reward us with the pension we have earned. The means are there, so why not end the dispute in a gentlemanly manner?"

BAPA Executive Officers

President: Brian Havard

V. Pres: James Nelson

Secretary: Jack Stoner

Box 35, Christies Beach, SA. 5165

Treasurer/Membership Secretary/Webmaster

David Waterhouse

PO Box 8, Mooloolaba, Qld. 4557

West Australia: Derrick Prance

Consultative Committee

June Borsberry

Frank Yates

Philip Currah

Web Address

BAPA is an affiliate of the National Pensioner Convention in the UK and a member of the World Alliance of British Expatriate Pensioners.