By Ava Hubble
Action by campaign groups has led to payouts for expats misinformed of their National Insurance status, writes Ava Hubble
Thousands of Britons have been wrongly refused a pension after being told they had not contributed to the National Insurance Fund for the minimum qualifying period.
The minimum qualifying period for National Insurance Contributions (Nics) is 11 years for men and 10 years for women. But those who had paid Nics for at least three years should have been told they could top up their contributions to bring them in line with this minimum.
If they had done this, they would be eligible for a quarter of the pension they would have received if their contributions were complete.
This oversight first came to light in 2001 when a Canada-based expat complained, in a letter to the journal of the Canadian Alliance of British Pensioners (CABP), that he had been denied the option of topping up his contributions.
His protests attracted investigations by expat pensioner organisations, and eventually the UK authorities admitted there had been bungling and set about trying to make amends.
This entailed examining the records in an effort to trace the whereabouts of those who had been penalised by the blunder, which dated back to the mid-1990s. They included expat World War Two veterans and other Britons who had contributed to the NI fund for almost a decade before emigrating during the 1950s.
Painstaking efforts of expat organisations
It would have been particularly difficult to trace them had it not been for the painstaking efforts of expat organisations around the world. They have used their websites and newsletters to alert their members to the possibility that they - and perhaps their expat friends and neighbours - have been denied a British pension in error.
The chairman of the British Pensions in Australia organisation, Jim Tilley, has been busy lodging claims on behalf of members around Australia. They include the widows of deceased British pensioners.
The UK's Department for Work and Pensions (DWP) seems anxious to expedite matters and to cut as much red tape as possible.
In some cases the required top-up contributions are now being deducted by the DWP from accrued back payments - the retrospective pension payments these expats would have been entitled to regularly receive over the years had it not been for the oversight.
Mr Tilley said several of his members have been delighted to learn that not only will they now receive an on-going regular partial pension, but also the windfall of a one-off lump sum back payment. Even after the deduction of the required top-up contribution, back payments usually add up to between £4,000 and £5,000.
The president of the British Australian Pensioner Association, James Nelson, is also dealing with constant inquiries, although he stresses that while he is always ready to advise callers about how to lodge a claim, he encourages them to liaise directly with the DWP. His association has also been busy lately on behalf of expats who are members of public sector pension funds.
As reported in Issue 829 of the Weekly Telegraph, many of these expats do not realise that a portion of their pension, the GMP or Guaranteed Minimum Pension portion, should be regularly uprated in line with inflation, even if they are resident in one of the Commonwealth countries affected by the UK's frozen pensions policy.
Mr Nelson has repeatedly complained that bureaucratic indolence and ignorance of the rules has led to thousands of expats forfeiting the regular uprating of the GMP portion of their pensions.
He recently won an increased pension and a lump sum back payment in excess of £10,000 for a Queensland-based member, retired school teacher Joy Waterhouse. She said she would never have realised she was being short-changed had it not been for Mr Nelson's efforts.
Frozen pensions policy
As a result of the frozen pensions policy, expats in Australia, Canada and most other Commonwealth countries have not had their basic state pensions uprated in line with inflation since they left the UK.
The latest official figures reveal that 244,971 British pensioners are currently living in retirement in Australia. Around 170,000 of these expats now draw a means-tested Australian pension or partial pension, either because they cannot make ends meet on a long-frozen UK pension, or because they are not entitled to a UK pension.
It is important for expats to remember, though, that the Australian social security authority, Centrelink, requires its customers to immediately report any change in circumstances.
Both Mr Tilley and Mr Nelson stress that expats negligent in this regard can find themselves faced with charges of non-compliance - otherwise known as social security fraud.
Yet Mr Tilley and Mr Nelson also advise that a DWP back payment, or the advent of a partial or increased British pension, will not necessarily result in the reduction of an expat's Australian pension.
Mr Tilley said: "It will depend on your total income from all other sources. Your Australian pension will not be affected unless your income from other sources exceeds about £120 a month (or £240 in the case of a couple)."
The principal work of the expat pensioner organisations remains legal action for the repeal of Britain's frozen pensions policy. The freeze does not apply to expats who retire to EU nations and most other non-Commonwealth countries. Campaigners, led by the CABP, have now taken their case to the European Court of Human Rights.
British Pensions in Australia:
British Australian Pensioner Association:
Canadian Alliance of British Pensioners: