3.
The Intentions of the Pensions (Increase) Act 1971
8. Since the main purpose of the Act is to restore the purchasing power of a basic pension, there is an underlying assumption in Section 2(6) that the sterling value of that basic pension will in fact remain constant. If through exchange rate shortfalls the basic pension is reduced, it is implied that it will be made up one way or another. If there is a Public Officers' Agreement the overseas government will, under the agreement, direct specific increases towards restoring its value. If not, I think it would be reasonable if the increases that the overseas government does pay be applied first towards restoring the value of the basic pension before calculating the supplement. That this was the intention is evident /treatsfrom the way the Act/exchange rate gains. If the exchange rate
moves in the pensioner's favour and the basic pension is increased, it is stated in Section 11(4) of the Act that "additions to the value of those pensions" should be taken into account before calculating the supplement. Section 11 (4) also requires that the supplements authorised by regulation should take account of any increase or supplement payable by an overseas government. I consider that the increase to be taken into account should be the net increase left
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after restoring the value of the basic pension if that was necessary. The ODA actually takes account of the gross increase paid by the Hong Kong Government. The ODA would take account of only the net increases for those overseas governments that come under a Public Officers' Agreement (if there any left) and under the principle of consistency the same should apply to Hong Kong pensions.
There is, therefore, an ambiguity in Section 11(4) of the Act that requires judicial interpretation.