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CARSON & THE LAW
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Back to History of the Carson Case
Carson report -
Expats & KGB -
Pension Appeal -
Expats fight -
Expats wait -
On Reflection
Choose your country carefully -
Notes from BAPA members
Carson report from Expat Telegraph
Increase in state pensions for expats depends on the 'lottery of
where you decide to live'
By David McMillan
(Filed: 02/03/2005)
The Law Lords heard this week that it was the "lottery of where you decide to
live'' that decided whether expatriates received annual increases in their state
pensions.
Nicholas Blake, QC, for the British pensioner Annette Carson, said there were
900,000 pensioners living abroad and about 480,000 did get the increase because
they had moved to countries in Europe or to nations such as the US, Barbados,
Mauritius, Turkey, Bermuda, Jamaica or Israel.
But those who went to Canada, Trinidad and Tobago, New Zealand, Australia,
Zimbabwe or South Africa did not.
Mr Blake highlighted the case of one British pensioner who moved to Australia
many years ago whose pension is still frozen at £6.70 a week.
(See note)
He said that if Mrs Carson returned to the UK for just a few weeks, her pension
would automatically be uplifted by the £12.10 difference. But it would go down
again if she returned to South Africa. It would stay uplifted if she went to
America, but not Canada.
He said that, according to the regulations, someone who was wealthy enough to
have two homes - maintaining a residency in the UK and travelling to South
Africa for the winter - would be entitled to the increase.
Mrs Carson is asking Lords Nicholls, Hoffmann, Rodger, Walker and Carswell to
overturn the ruling of the Court of Appeal in June 2003 which itself rejected
her appeal against a High Court ruling in May 2002, which turned down her claim.
Mr Blake claimed that the "rigid approach'' of the Government ran the very real
danger of legitimising unjustified discrimination. He claimed her rights to
freedom of movement in the modern world could not justify the present
arrangements.
Mrs Carson was mainly dependent on her British pension to support her
retirement, which she supplemented with some income from her earnings as a
writer.
But as inflation rises in South Africa the value of her pension diminishes and
she may face severe financial hardship and be forced to continue to work if she
is able to. (See note)
Mr Blake told their Lordships: "The pension should not devalue so as to become
useless.''
He said it should make no difference whether you decided to retire in the UK or
in South Africa: free movement and the right to life were fundamental rights.
He claimed the Court of Appeal erred in treating the cost of uplifting the
pensions as relevant and failed to have "proper regard'' to Mrs Carson's
fundamental human rights - her right not to be discriminated against and her
right to free movement.
John Howell, QC, for the Government, claimed that the approach of Mrs Carson
assumes that pensions must be payable to those who have made contributions
irrespective of whether they choose to live in Britain, and that pensions
payable must have equality of value in whatever country individuals choose to
live, including the most expensive countries, regardless of the financial and
economic costs involved.
He said there was no statutory right to a pension and it was wrong to say it was
not a discretionary feature. Judgment was to be reserved after two days of legal
arguments.
Expat pensioners 'are like KGB'
Rupert Jones in The Guardian
Tuesday March 1, 2005
The plight of Britons abroad who have had their state pensions frozen was
yesterday compared with that of ex-KGB agents who have suffered discrimination.
Parallels were drawn between the seemingly very different cases during an appeal
hearing at the House of Lords which started yesterday.
Annette Carson, 64, who lives in South Africa, is leading a battle to overturn
regulations she and others claim result in half a million expat pensioners
getting lower state pensions than their UK counterparts.
Those living in countries such as South Africa, Australia and Canada do not have
their state pensions increased annually in line with inflation. Mrs Carson has
gone to the House of Lords after the appeal court dismissed her claim in 2003.
Nicholas Blake QC, for Mrs Carson, cited a case involving former KGB agents in
Lithuania who, according to the European court of human rights, suffered
discrimination because they were barred from certain jobs. In the Carson case,
it is alleged that the government is guilty of discrimination against the expats.
John Howell QC, for the government, said the state pension was designed
principally to provide benefits to people in the UK. The law lords' verdict is
expected at a later date
from the Financial Times
Pension appeal starts in Lords
By Nikki Tait
Published: March 1 2005 02:00 | Last updated: March 1 2005 02:00
The House of Lords yesterday began to hear an appeal that will determine
whether hundreds of thousands of British citizens who have retired overseas have
to survive on "frozen" state pension entitlements, with no inflation-linked
increases. The test case concerns Annette Carson, who spent most of her working
life in England but moved to South Africa in 1990 and started drawing a UK state
pension in 2000. She had paid full national insurance contributions and accused
the government of unlawful discrimination - on the grounds that some retired
Britons living abroad receive regular inflation-linked upgrades - as do
pensioners in the UK, while others do not. The challenge failed in the High
Court and Court of Appeal. Nikki Tait.
Expats fight 'injustice' of state pension
Expats fight 'injustice' of state pension
By Harriet Meyer (Filed: 28/02/2005)
About 500,000 people who had their state pensions frozen when they left Britain
to retire overseas will have their appeal against this "injustice" heard by the
House of Lords today.
Those affected include people in their 80s who receive pensions of £14 a
week, whereas they would get £140 a week if they had remained in the United
Kingdom or any of the countries where state pensions are uprated in line with
inflation.
Pensioners retiring to America and any European Union country have their state
pension uprated in line with the Retail Price Index.
However, more than half of the 930,000 British expats living overseas do not
receive the annual uplift, nor do they receive the annual £200 winter fuel
allowance. The majority of those affected live in Australia, Canada, New Zealand
and South Africa.
Annette Carson, 64, who has been living in South Africa since 1989, has been
fighting the Department for Work and Pensions in the courts. She is asking that
regulations barring her from receiving her full UK state pension rises are
declared unlawful. Miss Carson's pension is frozen at the 2001 level of £67.50 a
week, but if she still lived in the UK she would now be receiving £79.60, with a
further increase due in April.
She lost her case in the Court of Appeal in June 2003, but the Appeal Committee
of the House of Lords
granted leave to appeal to the Lords, and her
case is due to be heard today.
Graham Chrystie, of law firm Thomas Eggar, is representing Miss Carson. She has
already had two rulings made against her, and costs awarded against her. Mr
Chrystie said: "Over 500,000 UK pensioners living abroad are getting a much
lower state pension than if they were living in the UK.
"If Annette Carson's appeal is successful, this injustice will be remedied ? at
small cost to the Government but with enormous benefit to a great many needy
pensioners."
The Department for Work and Pensions estimates it would cost between £300m and
£400m annually to uprate all frozen pensions for those who retire overseas. A
spokesman said: "We wouldn't want to comment prior to a case being heard and a
judgement being made.
"Where there is a legal requirement to uprate UK pensions or where the
government has a reciprocal agreement in place with other foreign government,
state pensions are uprated."
Expats await outcome of bid to
unfreeze pensions
Campaign to overturn government regulations goes to law lords whose ruling will
be eagerly sought by over 500,000 British pensioners. Rupert Jones and Sarah
Marks report
Saturday March 5, 2005
The Guardian
More than half a million British pensioners around the world are waiting to hear
if a legal battle to "unfreeze" their state pensions has been successful.
Annette Carson, 64, who lives in South Africa, is leading a campaign to overturn
UK government regulations she and others claim result in 540,000 expat
pensioners getting lower state pensions than their counterparts residing in
Britain and some other countries including France and the US.
This week Mrs Carson went to the House of Lords after the appeal court dismissed
her claim in 2003. The law lords heard evidence from both sides and are expected
to give their judgement by the summer.
Mrs Carson claims the government is guilty of unlawful discrimination. Under the
rules - which the government has conceded are "illogical" - British expats in
countries such as Australia, Canada and South Africa do not see their state
pension increased annually in line with inflation, as happens in Britain and the
EU.
Here we look at the experience of British people who retire to France, where
they do get the annual increase, and those moving to New Zealand, where they
don't.
Mrs Carson's case has been supported by campaigning expat pensioner groups, most
notably the Canadian Alliance of British Pensioners (CABP), which claims that
government stinginess forces many elderly people into real financial hardship.
Ian Bold, director of CABP, who was in court this week, knows Brits in their
nineties who retired to Canada at the age of 65 and receive just £8- 9 a week,
compared to the £79 they would be getting had their pension been index-linked.
The pensioners who packed the court this week were encouraged by the law lords'
considerable grasp of the case. "They asked the right questions," said Mr Bold,
who is now eagerly anticipating the lords' judgement, which will probably come
after the general election.
If it goes against Mrs Carson, Mr Bold, whose organisation has raised £1m to
fund the case, will carry on fighting. "We will then have to go to the European
Union as this is a human rights issue."
Countries where pensions are index-linked included the US, Israel and the EU.
But in most Commonwealth countries, pensions are frozen.
Help the Aged is among the organisations which has said there seems to be a
basic injustice in the system.
Useful organisations: British Australian Pensioner Association -
www.britishpensions.org.au
British Pensioners Association NZ
www.britishpensions.org.nz
South African Alliance of British Pensioners 00 11 803 1940 Canadian Alliance of
British pensioners
www.britishpensions.com
On reflection
Should expat pensioners really
expect that index-linked rise?
Patrick Collinson, editor, Jobs & Money
Saturday March 5, 2005
The Guardian
Pensioners living in Commonwealth countries such as South Africa were cheered by
the start this week of a Law Lords hearing into the case of Annette Carson, 64.
Mrs Carson is one of about 500,000 expat pensioners getting lower state pensions
than their UK counterparts.
Unlike pensioners here, and those in Spain, France and other EU countries,
pensioners living in most Commonwealth countries do not have their state
pensions increased annually in line with inflation.
Discimination cries Ms Carson. Why should a Brit retiring in, say, Spain, see
their UK state pension increased annually, and not in, say, Australia?
(See note)
The somewhat arbitrary demarcation offends natural justice. But maybe the
solution is something that would rather upset Mrs Carson. Parity could instead
be achieved by halting annual increases for all overseas pensioners, rather than
just those in the Commonwealth countries.
Already a tenth of all pen sioners choose to live abroad. Those pensioners argue
that they have paid their national insurance "stamp" and are therefore entitled
to a full UK state pension. They also argue that when they fall ill, the burden
falls on to foreign health systems, not the beleaguered NHS.
But the economic reality is that when state pension money is sent abroad, that
money is not spent in Britain providing jobs and helping the economy to grow.
Those who retire abroad are rarely from low income groups, and will take from
Britain not just their pension but a large amount of other capital too.
Sadly, the idea that national insurance contributions are some sort of fund
built up to pay out when you retire is fiction. The state pension is a
pay-as-you-go system where one generation of taxpayers pays out to another.
The national insurance stamp was deducted from today's pensioners during the 60s
and 70s and was relatively low. Today there are 11.3m pensioners and the number
is growing all the time. National insurance rates have risen and are likely to
rise again. Should today's working, tax-paying generation really be expected to
pay for a life of comfort abroad for some of Britain's better-off pensioners?
In a similar vein, pensioner groups currently demand that council tax be
slashed, and the burden passed on to working age people via local income taxes.
Working taxpayers have a duty to support the retired, but there has to be a
limit to the number of open cheques.
(See response
letter 1)
(See response
letter 2)
Weekly Telegraph - March 16 '05.
If you are retiring abroad, you are entitled to any United Kingdom state pension you have built up.
They can be paid straight into your overseas bank account in sterling. Alternatively, you can have your pension paid by order sent by post. Whichever option you choose, payments are made every four or 13 weeks in arrears.
However, it isn't always plain sailing. Only if you retire in a country that is in the European Economic Area (EEA) or that has a reciprocal agreement with the UK, will your pension be uprated in line with inflation, as it would if you were still based in the UK.
An estimated 900,000 British pensioners live abroad and fewer than half receive the increase.
Those who do qualify to have their pensions uprated live in EEA nations, including Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Republic of Ireland, Spain and Sweden plus Iceland, Liechtenstein and Norway.
The countries with whom the UK has a reciprocal arrangement include Barbados, Bermuda, Cyprus, Israel, Jamaica, Jersey and Guernsey, Malta, Mauritius, Philippines, Switzerland, Turkey, USA, Yugoslavia (and its former republics).
Many of the pensioners who don't receive increases live in Commonwealth countries. These include an estimated 254,000 in Australia, 147,000 in Canada, 37,100 in New Zealand and 36,000 in South Africa.
Understandably, those affected are campaigning to get the law changed.
An appeal by Annette Carson's against Britain's freeze on certain expatriates' pensions was heard in the House of Lords on Feb 28-March 1.
Ms Carson, 64, who has been living in South Africa since 1989, has been fighting the Department for Work and Pensions in the courts and is asking that regulations barring her from receiving her full UK state pension rises are declared unlawful.
Her pension is frozen at the 2001 level of £67.50 a week, but if she still lived in the UK, she would now be receiving £79.60, with a further increase due in April.
Those affected include people in their 80s who receive pensions of £14 a week, whereas they would get £140 a week if they had remained in the UK or in other countries where pensions are uprated in line with inflation.
Mrs Carson lost her case in the Court of Appeal in June 2003, but the Appeal Committee of the House of Lords granted leave to appeal to the Lords.
The verdict is expected later this year, but if Mrs Carson wins, the Department for Work and Pensions estimates it would cost between £300m and £400m annually to uprate all frozen pensions for those who retire overseas.
Graham Chrystie, of law firm Thomas Eggar, who is representing Mrs Carson, said: "Over 500,000 UK pensioners living abroad are getting a much lower state pension than if they were living in the UK.
"If Annette Carson's Lords appeal is successful, this injustice will be remedied - at small cost to the Government, but with enormous benefit to a great many needy pensioners."
From James Nelson, Vice President
Mr Blake highlighted the case of one
British pensioner who moved to Australia many years ago whose pension is still
frozen at £6.70 a week.
Unfortunately, this gentleman has just died. we have received notification from
his son.
But as inflation rises in South Africa the value of her
pension diminishes and she may face severe financial hardship and be forced to
continue to work if she is able to.
Mr Blake told their Lordships: "The pension should not devalue so as to become
useless.''
Inflation in South Africa is an irrelevant point and should not have been
allowed by Mrs Carson's legal advisers. If the Rand falls in comparison to the
pound, then her pension in local currency will increase.
John Howell, QC, for the Government, claimed that the
approach of Mrs Carson assumes that pensions must be payable to those who have
made contributions irrespective of whether they choose to live in Britain, and
that pensions payable must have equality of value in whatever country
individuals choose to live, including the most expensive countries, regardless
of the financial and economic costs involved.
(See further note)
This is the kind of rebuttal one should have expected once you introduce
the spectre of inflation. we do not claim that the UK pensions should buy the
same basket of goods here as the pension would in Britain. We only claim that it
should be the same number of pounds as if we lived in Britain. Inflation and
exchange rates are our problem, not the government's problem. We have one member
of bep in the Philippines, and he can exchange his pension money on the street
at the best rate he can get - his problem, not mine.
He said there was no statutory right to a pension and it
was wrong to say it was not a discretionary feature.
Strictly he is right. The Statute says we are not entitled to anything at
all. We are subject to the whim of the Secretary of State.
Judgment was to be reserved after two days of legal arguments.
Don't hold your breath.
John Howell QC, for the government, said
the state pension was designed principally to provide benefits to people in the
UK.
True but trivial. The vast majority of pensioners live in the UK. But ever since
1929 pensions have been paid outside of the UK, firstly in "His Majesty's
Dominions", then eventually all over the world. Half of the expatriates get
their pensions uprated each year, the other half do not.
James
Obviously a lot more was said than
the extracts quoted, but I agree with James that the cost of living is an
irrelevant issue and Blake could easily have put that ogre to bed by merely
stating that inflation and exchange rates and their effect on the UK pension
was not considered relevant by the Govt when granting discriminatory indexation
to the 48 unfrozen countries so it is not an issue to be considered by their
Lordships.
Jack
From Jean Wilson, Member
Thank you for your communications with reference to pensions forwarded from BAPA.
I was interest to read the latest. The following comment by John Howell QC
surprises me.
John Howell, QC, for the Government, claimed that the approach of Mrs
Carson assumes that pensions must be payable to those who have made
contributions irrespective of whether they choose to live in Britain, and
that pensions payable must have equality of value in whatever country
individuals choose to live, including the most expensive countries, regardless
of the financial and economic costs involved.
He said there was no statutory right to a pension and it was wrong to say it was
not a discretionary feature. Judgment was to be reserved after two days of legal
arguments.
In my case I am in communication with the National Insurance office in Newcastle
upon Tyne, I have letters from them telling me that I have paid 10 yrs (prior to
emigrating) and are therefore entitle to a part pension and that if I choose to
pay extra contributions then I can increase my part pension to 52%. They have
for the past 4 years accepted my payments of an additional 8 years with 3 more
years to pay. I will be eligible for my pension next year. If we don't have
any rights to our pensions being paid overseas why are they accepting our
payments, surely this is a defacto acceptance of responsibility and removes the
discretionary feature. This then surely means that we are entitled to have our
pensions increased annually to at least the basic received in the UK, we don't
expect to receive additional payments made in UK eg Winter Fuel Bonus (my father
received 400 pounds per annum). I hope this situations was put forward by Mrs.
Carson's QC, to me it is relevant.
Regards Jean Willson
From James Nelson
Re: On Reflection
Patrick Collinson asks whether Expatriate Pensioners should expect that their
pensions will be uprated in line with resident pensioners. A couple of comments
might be of interest to your readers.
He suggests that "Parity could instead be achieved by halting annual increases
for all overseas pensioners, rather than just those in the Commonwealth
countries." One of the standard excuses given by governments for not uprating
expatriates' pensions is that they will only uprate where they are bound by
treaties to do so. Although Patrick's solution might be equitable, it is not
achievable, unless Britain jettisons its reputation in the international
community.
He also observes "Sadly, the idea that national insurance contributions are some
sort of fund built up to pay out when you retire is fiction. The state pension
is a pay-as-you-go system where one generation of taxpayers pays out to
another."
Expat pensioners do not hold that idea. Old Age Pensions have been (un)funded on
this basis since 1925. William Beveridge explained it well in the Beveridge
Report. We paid our dues when we were the working generation, so why should we
not benefit now?
If all expatriates were frozen under the current rules, then
there would still be inequity depending on the date of emigration. As pointed
out in our Anomalies file, you could have identical twin brothers who had
identical job histories. One emigrates immediately after retirement and has his
pension frozen at date of emigration. The other twin emigrates ten years later,
and has his pension frozen at a much higher rate.
We don't want more than we paid for, but neither do we want less. All we are
asking for is parity with pensioners in Israel and Turkey and the Philippines.
James Nelson, Fellow of the Faculty of Actuaries
Vice President
British Australian Pensioner Association
If what they say is true, about today's employees funding our pensions----did our contributions not fund the pensions of our predecessors?
If we are not entitled to a pension "just because we paid our stamp", why were
we told that we were buying a pension when the Govt. took our money every month?
It is an absolute fallacy that it is the wealthy who retire overseas--many of
the pensioners (such as my parents and brother), came as "10 pound Poms", and
are far from wealthy. Having worked for only a few years here, they had no time
to build-up the huge Super that a lot of Aussies enjoy, and have to rely on the
Australian Taxpayer to top-up their pensions, whilst it is the British Govt.,
who hold their stamp money.
Heather Goldstein, BAPA Member
Letter from Brian Havard to the Editor of the Guardian
I suspect Patrick Collinson ('Should
expat pensioners really expect that index-linked rise? ' 5 March) was being
deliberately provocative. Extending freezing to all expatriate pensioners would
still be discriminatory, breaching that equity and logic which requires that
pensions shall be proportionate to contributions, irrespective of country of
residence.
It would certainly be fairer than the present split, which sees half the expats
uprated, the other half not, but Patrick Collinson must know that Britain is
bound by EU legislation to uprate its pensioners in any EU country, while the
United States, which is home to that other great block of uprated pensioners,
would never release Britain from the agreement - not that the UK would even try.
The cost of uprating the remaining 500,000 expats is said to be ?400m annually,
thus ?800 a head on average. But they spare the UK exchequer a raft of
expenditure, for instance on Winter Fuel Allowance, and especially on the cost
of hospital and community care which back in 2000 for age 65-74 averaged ?954,
age 75-84 ?1687, and for 85+ ?2604. Today's figures will be much higher.
It is clearly in Britain?s best interest to uprate the remaining frozen
pensioners forthwith, and then to encourage a rapid increase in emigration. It
would be a great cost saving.
From Brian Havard, BAPA President
Letter from June Borsberry to the Editor of the Guardian
It used to be called "stirring". I refer to Patrick
Collinson's mischief in suggesting that the remedy to depriving half-a-million
paid-up pensioners of their rightful due is to extend the illegality by
depriving one-and-a-half million. Enough said.
As to his recourse to the well-worn 'pay-as-you-go'
argument...even if its tortuous assertions can ever be held relevant, the simple
truth is that in our working years today's pensioners and our employers were
bound to contribute to the National Insurance Fund. The definition of 'to
insure' is 'to make sure or secure'.
"A life of comfort abroad" is Mr. Collinson's
fantasy about 'frozen' pensioners. He is probably very young. He won't
remember days of unemployment in the UK when our children were exhorted to 'get
on their bikes' and seek employment imaginatively. So many of them did.....and
we watched them depart for the 'blessed Commonwealth'.
Upon retirement I learned of 'freezing' through a
magazine letter. With horror I realised that I could not afford to join my son
and grandchildren in Canada. Years passed, and nearing 80, I decided that I
might well manage it during my limited remaining time. Mr. Collinson would not
see my lifestyle here as 'a life of comfort'. It is as hard as I foresaw.
Were I able to live down the road in Niagara Falls,
Ontario, I would be deprived of my due pension as here in Toronto. But across
the gorge in Niagara Falls, New York state, I
would receive my rightful sum.There is no argument that Mr. Collinson can drum
up which can justify such discrimination.
June Borsberry, ( BAPA Member)