Also see our latest, No 6, on the advantages of indexation.
DISCLAIMER.
These Guidelines are intended to give information, in simple terms, to help British pensioners to negotiate the minefield of legislation in Britain, Australia and other countries, where the British Government freezes pensions payable to those Nationals who have chosen to live abroad. 

We trust that the information we offer will assist British residents overseas, who are either already pensioners, or who are nearing the date when they will become pensioners, to obtain the best possible financial future. The information we provide is not definitive and the final outcome of any personal investigation must be resolved by negotiation with the Department for Work & Pensions, and the equivalent body in the country in which you have chosen to reside. 

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Do you qualify for a British Pension - The Australian Pension - Australian Tax - Voluntary contributions
Rights while travelling - Joining BAPA

No 1.  "Do You Qualify for a British Pension?" 

If you are a migrant from Britain or worked in the UK, then provided that you paid National Insurance contributions you are probably entitled to a British Age Pension. Pensionable age is 65 for men and 60 for Women, but the pension age for women is rising gradually to equal that for men. 

Category A Basic Retirement Pension
To qualify for a full (100%) Basic pension you must have contributed for most of your working life from age 16. The minimum pension payable is 25% of the standard rate, based on years of contribution from age 16, with a minimum of 11 years for men and 10 years for women. For each additional contribution year the percentage rises by 2% or 3% up to the maximum of 100%. Periods in which you did not contribute may nevertheless count as contribution years, earning you a higher percentage. Among such periods are those during which you may have lived and worked in a European Union country, periods of sickness, periods when you were allowed to be out of the work force because of home responsibilities and, of course, any periods in the armed services.  

It is beyond the scope of this guideline to list all the conditions. For details, contact the Department of Work and Pensions. If you have not yet reached pensionable age, you may be able to pay voluntary contributions, thus increasing your Basic pension.  See PENSION GUIDELINES No 4

Category B Retirement Pension
An additional pension for a dependant wife is called a "category B pension". It can also be paid to widows and widowers, but will not come in for dependant husbands until 2010.  It has been reported to us that the DWP does not always tell people that a category B pension is possible. Where a woman has a pension in right of her own contributions, and it is less than 60% (approximately) of the standard pension rate, she will probably be eligible, even if she is not a British citizen. If she gets her own pension at age 60, the DWP may forget to tell her about category B pension when her husband turns 65.

If they have let you down (not an uncommon event!), write or fax and ask them. You may be able to get a very satisfying lump sum back payment.

Additional Pension
There are two kinds of additional pension: Graduated Retirement Benefit, relating to the period between 1961 and 1975, and the State Earnings-Related Pension Scheme, SERPS, relating to the period since 1975. In official literature SERPS is simply called "Additional Pension". Both of these pensions depend on the amount of earnings on which you paid contributions. There is no minimum amount; in the official booklet there is even an example of a woman getting a pension of £1.23 per week! 

Contracted Out Pension
If your employer ran a contracted out pension scheme, or if you had a private pension, you will need to contact the Trustees or Managers of the scheme. Your previous employers or the Department for Work & Pensions (DWP) should be able to help you with this. 

Widows' Pension
The widow of a British pensioner will usually inherit her husband's basic pension, plus one half of his graduated pension, plus a percentage of his SERPS pension. This percentage is 100% where the pensioner was due to retire on or before 6 October 2002, falling to 50% if the pensioner was due to retire after 5 October 2010. 

Note: SERPS has been renamed "S2P" (State Second Pension). S2P is a continuation of SERPS under a new name with additional benefits for some pensioners.

Tell them your full name, your date and place of birth, your National Insurance Number if you know it, your last place of work in the UK, and which years you worked there. You don't need to tell them all of that, but the more you tell them the more likely it is that they will find you in their files. For complete information, access the web site at British High Commission re Pensions 

Also see Pension entitlement form you can print and post off.

This form was prepared by BAPA to assist you in supplying the information The Pension Service will need to find you in their records.

No 2. "The Australian Pension" 

Australian Protection Measures

No 3. "Australian Tax"

Australian taxation law allows the Undeducted Purchase Price (UPP) of all pensions originating in the UK to be taken into account when calculating Taxable Income.

The UPP of any pension is the total value of all contributions made over the years during which you were earning entitlement from that fund. This total value is divided by the number of years during which you are likely to receive payments from the fund. If the pension is to be paid for life, the term will be based on the life expectancy of the pensioner, as set out in the Australian Life Tables. If, upon the pensioner's death, the pension reverts to another person, that person's life expectancy will be used, if it is longer. 

The calculations are made in Pounds Sterling, the original currency of the pension, while the annual deduction for tax purposes will be the agreed amount converted into Australian currency at the average rate of exchange for the year in question.

The UPP deductions can be applied to all pensions received from the UK, whether private or government. If you have not claimed this form of deduction on your pension or pensions in the past, you can backdate your claim for a maximum of 3 years. 

Allowance for these deductions is made in Section 27H of the Income Tax Assessment Act. In order to claim for UPP deductions you will need to provide documentary evidence of your contributions. A letter to your Pension Fund Managers or, in the case of a Government Pension, to the Dept for Work & Pensions  in the UK, should get you all the information you need. 

In the case of the UK Government National Insurance or Age Pension, you also have the option of calculating the annual deduction on the basis of 8% of the annual pension received (expressed in Australian currency). This is permitted by Australian Taxation Office Ruling TR93/13. Generally speaking the 8% option is likely to be more advantageous, so ask for both options and choose the better. 

When applying you will need to provide the following information: (1) Date of birth; (2) Date pension commenced; (3) Term of pension, e.g. life, or a number of years. (4) Name and date of birth of the person to whom the pension reverts upon the claimant's death, if applicable. 

It is well worth making a claim. Three years back deductions for a pensioner couple can add up to several thousand dollars, with possibly several hundred a year thereafter. 

If you are unsure of how to make a claim, it might be worthwhile employing a tax accountant. As not all Australian accountants are aware of these regulations, as they apply to British Pensioners, you should give them this information.

No 4.  "Voluntary Contributions"

If you have not yet reached pensionable age, you may be eligible to make further contributions and thereby increase your future pension. Five or six years in arrears may be payable and you may also be able to pay a number of forward years. Options for additional contributions become more limited as retirement age approaches, but even after retirement you may be allowed to make up for earlier years when you did not pay National Insurance. Note that the DWP will only accept contributions for a full year or a multiple of full years. There is no advantage to be gained by increasing contributions beyond a total of 44 years. If you will be entitled to receive a pension, but your spouse will not, remember to claim for a dependent spouse. 

To check your entitlement write to:- The Pension Service International Pension Centre

Tell them your full name, your date and place of birth, your National Insurance Number if you know it, your last place of work in the UK, and which years you worked there. You don't need to tell them all of that, but the more you tell them the more likely it is that they will find you in their files. 

Ask them about class 2 contributions. They are much cheaper than class 3. Contrary to what it says in the booklets, qualification for class 2 is not limited to the self-employed, so long as you can tell them that you are working.

Two Case Histories

Two cases have been reported to us of pensioners who were not told by the DWP about their right to make voluntary contributions. In both cases the pensioners were permitted to make payments in arrears. In one case the pensioner had his pension increased, and was awarded a lump sum back payment which exceeded the amount of voluntary contribution he had paid. 

In the other case, a woman was told that as she had only nine year's contribution before marriage and emigration, she was not entitled to any pension. She was not told about the right to make voluntary contributions. Seven years later she found out about the right to make voluntary contributions and lodged a complaint. She was permitted to make contributions for six years in arrears, thus acquiring a pension of 35% of the standard rate. She has also received a lump sum in back payment, more than she paid in voluntary contributions.

No 5.  "Rights while travelling"

During temporary visits to most "Unfrozen" countries

Are you aware that it is possible for a Pensioner resident overseas with a frozen pension to claim uprating for the duration of your visit when visiting the United Kingdom and a number of (but not all) other countries where UK state pensions are uprated? 

We urge you to do so, even if the claim only amounts to "a bob or two". We present this information to enable frozen pensioners to claim uprating for the period during which they may be fortunate enough to visit certain countries.  As a result of enquiries made to the UK Department for Work & Pensions (DWP), readers should note the list of countries where this applies; it is considerably longer than most people realise. 

EUROPEAN COMMUNITY MEMBER STATES

The countries where your pension will be uprated are United Kingdom, European Community States, and any of the countries listed below:

With the addition of 10 new member States the EU is now constituted by 25 countries:
Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom

Iceland and Norway can also be included as, though not EU members, they are European Economic Area countries, where EC Regulations apply.
 

OTHER COUNTRIES WHERE PENSIONS ARE NOT FROZEN

You may also claim uprating during temporary visits to:
Barbados, Bosnia-Herzegovina, Croatia, Israel, Jersey, Mauritius, Sark, Switzerland, Turkey, Guernsey, Philippines, Yugoslavia (Fed.Rep.) & Macedonia (Former Yugoslav Rep. of Macedonia).

UPRATING CLAIMS ARE NOT ACCEPTED FOR VISITS
TO CERTAIN OTHER COUNTRIES:

The DWP also advises that, although there is a reciprocal agreement to pay uprating to pensioners ordinarily resident in the USA, the agreement precludes the payment of uprating if you are simply visiting. Also specifically excluded in their own reciprocal agreement, for some mysterious reason, is Bermuda. Some editions of leaflet CF-N-701 also exclude Jamaica.

If you temporarily visit those  countries from any frozen country you will not receive the uprating.

DON'T MISS OUT ON MAKING A CLAIM

Even if you are only visiting for a day or two, you should file a claim with DWP to receive your uprating. The current rules (which keep changing) state that a claim must be received within a month of your arrival in the UK, or other qualifying country.  In our experience it is safer to tell them before your visit.

The rules are laid out in leaflet CF-N-701.  Each edition of this leaflet appears to vary so it would be wise to get the most up to date one & a copy of form POD926A-CT in advance of your visit from:

• Then follow the current instructions on the leaflet and complete the form
• be sure to tell them which eligible countries you are visiting and give them your dates of arrival and departure
• include a clear photocopy of your airline or other ticket stub to substantiate the information you are giving them
• you need to quote your UK pension number and/or UK social security number.
• they generally, however, take a relaxed attitude, as long as you contact them in time. In some reported cases the claim was made only by email and fax, but was accepted and paid in full.

The Addresses

The Pension Service, International Pension Centre (IPC)
Payments - Room TD 111
Tyneview Park, Newcastle upon Tyne,  NE98 1BA, England.
Tel: within UK 0191 21 87777
Tel: from Australia 0011  44 191 21 87777
Fax: Within UK  0191 21 83305
E-mail address:tvp.internationalqueries@thepensionservice.gsi.gov.uk

Australian Taxation Office
GPO Box 9990,
in your capital city
Phone: 132861
www.ato.gov.au

Centrelink enquiries can be sent to:
The Manager, Centrelink International Services,
GPO Box 273C, Hobart,
Tasmania 7001.
Phone: 131673

Other USEFUL LINKS: 
 
CABP. The Canadian Alliance of British Pensioners.
Web site: http://www.britishpensions.com

BPAWC. The British Pensioners Association Western Canada.
Web site: http://www.britishpensioners.com 

SAABP. The South African Alliance of British Pensioners.
Web site: http://www.byte.co.za/britishpensioners

WABEP. The World Alliance of British Expatriate Pensioners.
Web site: http://wabep.hypermart.net

The UK Pensions Service web site
or, more specifically, if you have already retired:
http://www.thepensionservice.gov.uk/retired/money-tax/index.asp

UK Government site for pension information, if you are nearing retirement
http://www.inlandrevenue.gov.uk/pensioners/index.htm

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British Australian Pensioner Association Inc 
Box 35, Christies Beach, South Australia, 5165
Member of the International Consortium of British Pensioners
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