Expats & Brexit

With continued debate on the possibility of the UK withdrawing from the EU (known as brexit) here are a few thoughts on the ramifications on the effect of expat state pensioners and their dependents living in the EU... and how the UK could be "biting it's nose off to spite it's face".

The big UKIP-driven debate about immigrants "coming over here, stealing our jobs and taking our benefits" (a juxtaposition if ever I heard one!) is certainly causing the Tory element of the coalition to panic like a herd of gazelle into an abyss... and at no point has anyone at the top of government paid consideration to the 2+ million British expats residing in other EU countries.

So instead of worrying about "Johnny Foreigner" let's take a reasoned look at the effects of a brexit on your granddads and grannies... who may well be looking to take up resident in your spare bedroom after 2017!

Currently, expat British state pensioners and their dependents are entitled to receive their state pension (NOT a welfare benefit¹) and "exportable" benefits if they have a sufficient link to the UK. The DWP do not actually provide their calculations for the sufficient link eligibility, but those that have the right to receive a state pension due to reaching the qualifying years of national insurance payments (nowadays only a mere 30 qualifying years) are generally deemed eligible... a seemingly one-sided criteria given that the children of migrants living outside the UK are currently entitled to receive Child Benefit, but I will not go down the route of that argument here.

The main exportable benefits received by OAP British expats in the EU are DLA (care component only, not mobility²) or Attendance Allowance and Carers Allowance.

Before any critics jump on this bandwagon and correct me on this, I know that there are limited additional benefits that can be claimed by work-age expats, i.e. JSA for the first 6 months you are abroad and seeking work, but this article is dealing specifically with OAPs who have been living in the EU for several years and their dependents who will no longer be eligible for any short-term UK benefits.

As has been widely reported, Winter Fuel Payments for OAP expats are being removed in 2015 (legislation due to conveniently occur just BEFORE the General Election) from a selection of EU countries³, based on annual average temperatures. However, it should be noted, particularly by those UKIP supporters gleefully clapping their hands at this news in the UK, that due to the manipulation of temperature statistics by the DWP, while OAP expats in "hot" France will lose their WFP, the Tories have ensured – for reasons known only to IDS – that those in "cold" Italy will retain the payment!

And, as an aside, for anyone interested in the workings of the EU and “benefits”, the European Commission has decreed that WFP is part of an OAP's state pension and, as such, it is illegal to remove this element from being paid. Needless to say, if the Tories regain power and this legislation remains in place, and the UK population vote to stay IN the EU, then this will be subject to a legal challenge that will be dragged for years through the European Court of Justice, at a substantial cost to the taxpayer that will probably outweigh the cost of actually paying it.

To give an idea of how the UK government likes to decry the ECJ and then use it for its own twisted means against its disabled citizens, for example, just Google ECJ cases C-299/05 and C-537/09. The latter is a wonderful wake-up call for those who think Cameron's crocodile tears for his son are real. He really does not give a flying f*ck about the disabled.

Anyway, let's move on to healthcare and the NHS – a big talking point at the time of writing this blog, as Gideon has announced a £2bn boost to the ailing UK service. Unlike the UK, most other EU countries do not provide services "free at the point of delivery", so along with the indigenous populations, even UK state pensioners are obliged to have some form of private insurance as the reciprocal agreements within the EU do not cover 100% of the costs.

For example, in France, payments for GP and specialist visits are made upfront: €23 for a GP visit, €44 (average) for a specialist. Hospital stays will be invoiced for payment by cheque/card or be covered by insurance. Prescription charges must also be covered otherwise payment is required.

Thinking about this, it might make those living in Britain a bit more mindful about making appointments that they then fail to attend if the UK adopted this policy. But given that the UK does not even charge other EU migrants to access NHS services, could this be seen as another failed opportunity that has been perpetuated by consecutive UK governments?

OK, Cameron & Co are now talking the talk about ensuring NHS charges are made by “foreigners” and that benefit entitlements are tightened up, but this smacks of closing the gate after the horse has bolted... particularly as the benefit changes being proposed are already de rigour in some EU countries in that you do not get anything out of the system without first paying a hefty amount in!

Anyway, in the event of Britain leaving the EU and repatriating "foreigners", there is no reason why the British expat's host country cannot do the same. Even if there is no tit-for-tat reprisals, there is no doubt in the current climate, that the UK government will seek to punish expats who remain abroad by freezing state pensions, as they do already for those in Canada, Australia etc, and removing their rights to exportable benefits, which are currently protected under EU law.

If this is the case, then many of those living on a basic state pension will find themselves forced to return to the UK, so let's have a look at what could entail:

Firstly, it should be noted that back in the days of the Colonial Empire – those days currently being sought to be relived by our UKIP pals – the British expatriate was, no doubt, a moneyed individual with no reliance on state assistance. The stereotypical expat, foisted upon a naïve UK population by the likes of the Daily Mail and Daily Express, is one who sits around a pool all day, in brilliant sunshine, quaffing champagne. Sadly, my friends, those expats are a rare breed and for those dinosaurs that still exist, they most certainly will not be worrying about what is going on back in the homeland.

Instead many of the expat communities, those living particularly in Spain, France and Portugal, are of the post-war (baby boomer) generation of hard grafters who had the opportunity to buy their council properties in the UK while working. Then, when it was time to put their feet up, having paid into the NI system for a minimum of 44 years to get their pittance of a State Pension (and for those fortunate enough, a small public or private pension), took the chance to cash in the fruits of their labour and buy a retirement flat, finca or derelict farmhouse in foreign climes.

Following the global crash and like many ordinary folk in Blighty, many of these expats have seen their retirement abodes become worthless and their state pension reduce by a weakened pound (and in my opinion an artificially inflated euro!). Belt-tightening has been the order of the day, just like everyone else.

At this point, I also need to point out – having been confronted on the issue of expats being able to sell up and bring their “fortune” back home to Blighty and invest in the housing market there – that some expats left rented property in the UK to rent in their host country, and therefore have no “assets” to sell up in the event of a return... so one can only hope that the UK government has the necessary resources in place to house these OAPs, particularly if adapted properties are needed!

Either way, as I write this, it would appear that a return to the UK is seeming more attractive. After all, OAP expats would find themselves entitled to receive the following, thank you very much:

State Pension

Pension Credit

Winter Fuel Payment

Cold Weather Payments

Housing Benefit

Council Tax reduction

DLA Care & Mobility components

Attendance Allowance

Carers Allowance

Free NHS healthcare

Free prescriptions

While any work-age dependents may be able to additionally claim:

JSA

Income support

Incapacity benefit/ESA

Mmm... now this is increasingly becoming very interesting isn't it?

Maybe this brexit thing won't be too bad, eh, for us old muppets if we troop back to Blighty?

All those extra benefits that we currently waiver in favour of our expat “lifestyle”, which in many cases is nothing different from the “lifestyle” we'd be living back home.

Makes you think, doesn't it? Grass, greener, other side of the fence... and such.

Oh, but wait? If the UK throws out the working EU migrants who are currently paying into the system that allows continued payments of State Pension to us and, hopefully, the generations coming along behind, where exactly does that leave us all?

Time to step back from the brexit precipice and reflect, maybe?

1. State Pension: it is a grotesque effrontery to common-sense that IDS and Gideon have bundled the State Pension into the benefit/welfare pot, as those in receipt of SP have earned the right to receive this money after years of national insurance contributions.

2. DLA Mobility component: it should be noted that if anyone living in the UK with restricted mobility, or even wheelchair-bound, is thinking of moving to another EU country, that following a long drawn out legal case through the European Court of Justice using taxpayers money, the UK Government (Labour and then the current coalition) decreed that DLA Mobility is NOT an exportable benefit (ECJ case C-537/09). So presumably you can arise like Lazarus and throw away your mobility aids the minute you leave Blighty's shores!

3. Winter fuel payments will no longer be available to OAP expats living in: Cyprus, France, Gibraltar, Greece, Malta, Portugal and Spain. Note that Italy is not excluded and expats there will continue to receive WFP. To ensure that expats in France have their WFP removed from 2015, IDS and the DWP included France's 5 overseas tropical departments in the provided dataset – Guadeloupe, Martinique, Mayotte, Réunion, and French Guiana – where only 30 retired Brits live, but this allows denial of WFP to those living in the colder climes of mainland France where temperatures in the winter fall to MINUS 15 degrees celcius! If IDS can do it there he can do it in the UK, so Cornwall, Devon and Dorset beware!