Appeal court rejects expatriate pensioners' demand for index-linked state payments

Two important challenges involving the impact of human rights laws on state benefits were rejected by the Court of Appeal yesterday.

The first was brought by Annette Carson, 61, who claimed that the Government was unlawfully discriminating against retired Britons living abroad by refusing to "up-rate" their state pensions in line with inflation.

In the second challenge, Joanne Reynolds claimed that the Government was unlawfully discriminating against people under 25 by paying them reduced amounts in jobseekers' allowance and income support.

The appeal judges ruled that there had been no violation of convention laws protecting private life and possessions. In both cases, the judges said the decision was for Parliament, not the courts.

Government figures show that of the 900,000 UK pensioners living abroad, about 420,000 living in certain countries receive up-ratings while the rest - including those living in South Africa, Australia, Canada and New Zealand - have their pensions frozen.

If Ms Carson, who lives in South Africa and was not in court, had won, the Government would have been faced with an additional pensions bill of £390m a year.

Ms Carson was ordered to pay the costs of the action both in the appeal and High Court and was refused permission to take the case to the House of Lords. Her lawyers said the legal fees would come out of a fund set up by pensioners to fight the case.

Ms Carson spent most of her working life in England and when she moved to South Africa, she paid voluntary contributions to protect her right to a UK state pension. She receives a British retirement pension of £103.62 a week.

She has not received the increase in the basic retirement pension of £5 paid since April 2001 nor the percentage increase in pensions.

If Ms Reynolds, who lives in the West Midlands, had won her case, up to 300,000 jobseekers could have benefited. Ms Reynolds had lost her job in October 2000 and because she was under 25 and not a lone parent, she received the reduced amount of £41.35 a week compared to £52.20 for those 25 and over.

Commenting on the Carson ruling, the Department for Work and Pensions said: "Today's judgment which found in favour of the Department for Work and Pensions, confirms our belief that the Government is not required to up-rate pensions to those living abroad where there is no legal requirement to do so or where there is no reciprocal arrangement in place."

A statement from Age Concern said the appeal court decision would mean that many on frozen pensions would continue to live in hardship. A spokesman said: "We strongly urge the Government to continue looking at ways of resolving this issue and making sure that people who paid national insurance contributions get a pension that is up-rated in line with inflation."