September 25, 2022

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Thunder Bay-born Barbara Reynolds lived and made regular pension payments in the U.K. for two decades before returning to Canada, where she made another one-time payment to the British government to top up her contributions.

That didn’t protect her from worrying about paying the rent on her Halifax apartment this month after she was unceremoniously cut off from her pension by a U.K. government that said she had failed to provide proof that she’s still alive.

Reynolds told CBC News she was astonished to receive a letter from the U.K. Department of Works and Pensions (DWP) “saying that they had not received the life certificate they sent to me back in March and that my pension was being suspended because they didn’t receive the certificate.

“I was in shock, absolute shock, because I didn’t receive the life certificate back in March when they said they sent it.”

“The rents are horribly expensive,” she added. “I don’t have a pension because they stopped it in July. Well, I have a small savings account that I can draw on for a few months, but after that, I mean, I don’t know.”

Halifax resident Barbara Reynolds said she was in “absolute shock” after being told the U.K. government was suspending her pension. (CBC News)

The association that represents U.K. pensioners in Canada reports that thousands of people across Canada appear to have received similar cut-off notices, all carrying the message that “there is no appeal” of the decision.

Reynolds and other pensioners insist that they never received the request for proof-of-life in the first place.

On Thursday morning, after repeated calls and letters of protest, Reynolds was relieved to receive a call from the DWP assuring her that her pension would be reinstated. Some other U.K. pensioners have had their cut-off dates extended to allow them to assemble proof-of-life. Others have seen their payments halted.

A letter received by one Canadian from the U.K.’s Department of Works and Pensions. The letter notes that “there is no right of appeal against this decision.” (CBC News)

The DWP told CBC News it will reinstate those pensioners affected — but only after they go through a process they must initiate themselves.

“We’ve implemented measures to enable the clearing of life certificates by phone and encourage those impacted to contact our International Pension Centre,” said the U.K. government department. “All payments will be backdated.”

‘A monumental cock-up’

“I’m still trying to get to the bottom of this,” British Conservative MP Sir Roger Gale told CBC News. “But it sounds as though there’s been a monumental cock-up on the part of the DWP, which has caused an immense amount of unnecessary distress.”

Gale, who chairs the British Parliament’s all-party committee on frozen pensions, said “we’re now pressing obviously to get any pensions that are not being paid reinstated as a matter of urgency. But we also have to get to the bottom of what went wrong.”

The DWP has conceded that the original request letters did not reach pensioners in Canada before they were cut off. But its explanations for that error have shifted.

Initially, the department suggested that Canada Post had misplaced the letters. “We understand the frustration of customers affected by Canadian postal delays,” it told U.K. newspapers the Daily Telegraph and Daily Express.

A Canada Post employee drives a mail truck through downtown Halifax on July 6, 2016. The U.K. government initially suggested Canada Post was to blame for pensioners not receiving proof-of-life documents in time. (Darren Calabrese/The Canadian Press)

But when pressed by CBC News to elaborate on whether Canada Post was indeed to blame, DWP replied with a short statement with a subtle but significant change in language: “We understand the frustration and concerns of customers in Canada affected by postal delays.”

When asked by CBC News if it stood by its original allocation of blame, DWP did not answer directly.

Canada Post’s Phil Legault told CBC News that “while we continue to investigate and make inquiries with Royal Mail, we have not received any specific complaints about this matter.”

Gale told CBC News the allegation was never believable to begin with.

“I find it rather hard to believe that an organization that is known to be as efficient normally as the Canadian Postal Service would somehow manage to lose thousands of letters,” he said. “It just doesn’t stack up.

“So it seems to me that somebody in the DWP in the United Kingdom has made this claim to try to justify why the messages weren’t received and why therefore people suddenly found their pensions being terminated effectively without notice.”

Pensioners not buying explanation

Reynolds was equally skeptical of the DWP’s initial claim that “Canadian postal delays” were to blame.

“I highly doubt that it was Canada Post’s fault. Because why would lots and lots of mail across Canada for that one item, the life certificate, go astray?” she said. “So I would say it’s the pension service. They have a problem there.”

Ian Andexser of Nanaimo, B.C. heads the Canadian Alliance of British Pensioners and also received notice that his pension would be cut off. He has won a one-month reprieve of that cut-off while he assembles the proof he needs to show DWP that he is still very much alive.

“Because I am well aware of these proof-of-life forms, I can assure you that had I received the initial one, it would have gone straight back to the U.K. to ensure that my pension did not get suspended,” he said.

“I think it’s completely abhorrent for the British government to turn around and put the blame on the Canadian mailing system for this, which is basically what they’ve done, as you can see in a number of newspaper articles that have been brought in the United Kingdom.”

Unequal treatment for Canadian pensioners

Andexser said that even if the current crisis of non-payment is corrected, the U.K. government continues to treat its approximately 130,000 pensioners in Canada in an unfair and discriminatory manner by refusing to index their pensions to inflation, as it does for British pensioners in the U.S. and Europe.

“The people who worked all their lives in the U.K. and paid into the U.K. system should be treated equally with every British pensioner around the world,” he said, decrying what he called a “ridiculous situation” where a British pensioner who settles in the U.S. ends up receiving more money than another British pensioner who has made the same contributions.

Gale agreed that is the crux of the problem for British retirees in Canada, and one that will remain even when the current mess is fixed.

“It’s got to be completely daft that somebody living on one side of the Niagara Falls in Canada has a frozen pension, while a hundred yards across the river in the United States, that pension is up-rated,” he said.

The British government has argued that it cannot alter pensions in Canada because it has no reciprocal agreement with Canada, as it has with the U.S. and nations in Europe and elsewhere.

Gale said that situation is not due to a lack of effort on Canada’s part.

“Canada has made the offer to enter into a reciprocal arrangement,” he said. “The British government, having sheltered behind this no-reciprocal-arrangement argument, is now saying, ‘Well, we don’t want a reciprocal arrangement.’

“I’m sorry, you can’t have it both ways. Canada has made the offer. We should take the offer and then honourably pay what is due.”

Prime Minister Justin Trudeau meets with U.K. Prime Minister Boris Johnson during the G7 Summit in Biarritz, France on Aug. 24, 2019. U.K. pensioners in Canada are calling on Ottawa to push London to index its pensions to inflation. (Sean Kilpatrick/The Canadian Press)

In any case, said Gale, “this idea that there has to be a reciprocal arrangement before a pension can be pro-rated is an arrant nonsense.”

Even without a reciprocal agreement, Canadian pensioners living in the U.K. already have pensions pegged to inflation because the Canadian government unilaterally decided to do so.

“Canada respects its pensioners no matter where they live in the world,” said Andexser.

Trade leverage

That unequal treatment is costly not only for the individual British pensioner in Canada but also for the Canadian taxpayer — who has to come to the rescue when British pensioners slip into genteel poverty.

Moreover, hundreds of millions of dollars that would be spent in the Canadian economy are being withheld.

Since Canada’s appeals for change have been rebuffed by a U.K. government that saves money under the status quo, Andexser said, it’s time for Canada to use the leverage it has with the U.K.

“I have tried repeatedly to get through to the Minister of Trade Mary Ng to point out to her that, recently, pension matters were included in trade negotiations that Britain conducted post-Brexit with a few of the countries in the [European Economic Area],” he said. “And the response I keep getting from the trade department is that pensions should not form part of trade agreements.

“Well, that’s nonsense. Britain has already set the precedent. And to us, it’s a no-brainer that Canada should be insisting that this part of the trade discussions should include the end to the frozen pension issue that British pensioners are suffering in Canada.”

A grocery store shopping cart holding various food items.
Inflation-driven increases in the cost of essentials like groceries are accelerating the decline in value of U.K. pensions in Canada, says the head of the Canadian Alliance of British Pensioners. (Ivanoh Demers/Radio-Canada)

Andexser said that while U.K. pensions in the past lost value steadily but slowly, they are now eroding several times faster because of dramatically higher inflation. The cost to the Canadian economy is also now increasing much faster, he added.

“And I’m just praying for all of these people who are suffering in Canada that the Canadian trade delegation will finally recognize this is the best opportunity they have had in well over 25 years to insist that Britain stop this discrimination.”

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