Australia's former bilateral social security agreement with the United Kingdom was terminated by Australia with effect from 1 March 2001.

The termination came at the end of unsuccessful negotiations between Australia and the UK on the issue of the indexation of British pensions paid to British citizens in Australia.

Under its legislation, the UK does not index the cost of living to the benefits it pays to those eligible for pension benefits under its compulsory National Insurance System, if they are residing outside the UK in Australia. All such indexation benefits are frozen on the date the person leaves the UK for Australia, or the date of grant of the pension, whichever comes first. This meant that UK pensioners in Australia were required to rely increasingly on Australian income support because the value of their UK pension decreased over time. Australian supplementation for these UK pensions was estimated to be costing the Australian taxpayer in the region of AUD$ 100 million annually.

Because the UK refused to index the pensions it paid to those in Australia, although it acknowledged the inequity of its policy, Australia finally decided to terminate the bilateral agreement.

If you wish to read further on the background to the termination of the UK agreement, have a look at Report 27 by the Australian Parliament's Joint Standing Committee on Treaties, of December 1999. The Government's June 2000 response to Report 27 is available here.

Although many hoped that the termination of the agreement by Australia would shame the UK into finally indexing its payments, this has not yet occurred to date. Until the UK does index its pensions, Australia would not be able to negotiate a new agreement with the UK.

UK pensions paid to British pensioners in South Africa and a handful of other countries as well as Australia are also not indexed. One pensioner in South Africa, Annette Carson, even took her case to court in Britain in 2002 claiming a breach of human rights, but at first instance the case was unsuccessful. Read the judgment of 22 May 2002 here. The Australian government was an intervening party to the case at first instance, but not on appeal. The British Australian Pensioner Association has been very active on this matter. In addition, journalist Paul Lewis has covered this issue extensively in London's Daily Telegraph.

For information on entitlements now that the agreement has been terminated, see the FaCS page on the UK agreement.

If you are an Australian living in the UK and you are wondering about your British social security entitlements, see our page on Australian pension entitlements, which also has links for British pensions and other social security entitlements.

If you are a British Pensioner in Australia, we suggest you get in touch with British Pensions in Australia (BPiA). BPiA is trying to lobby the British Government to achieve a just solution, as well as provide moral and financial support for Annette Carson. Have a look at the BPiA website or e-mail Eric Youle at BPiA in Queensland, at exy@powerup.com.au.

More Information

Other pages in the Bilateral Social Security Agreements section of our website may interest you:

· Overview
· Examples and Case Studies
· Advocacy Work by the SCG
· Send Minister Vanstone an E-mail
· New Agreement with the United States
· Changed Arrangements with New Zealand
· Do You Qualify for the Australian Age Pension?

For up-to-the-minute information on Australia's existing agreements, the implementation of new agreements and negotiations on future agreements, please refer to the International Agreements Page of the Department of Family and Community Services website.

If you have any comments or questions concerning Australia's policy on and negotiation of bilateral social security agreements, please contact the International Branch of the Australian Department of Family and Community Services in Canberra.

If you have a question concerning your own benefit entitlements, contact Centrelink International Services.

The Bilateral Social Security Agreements folder in the Archives section of this site also contains considerable background documentation.

Comments and suggestions for improvement concerning this section of the SCG website should be addressed to SCG Committee member Anne MacGregor.