TNAG-2921-FCO40-4196-Visits-and-proposed-visits-by-Alastair-Goodlad--Minister-of--1993 — Page 25

UK PENSION SUPPLEMENT: SPOS

Under the UK Pensions Increase Act 1971 (which provides for pensions to rise in line with UK inflation) pension supplements (SPOS) are payable to certain overseas pensioners, to supplement their locally awarded pension increases, in order to provide parity of treatment with their UK counterparts. It is proposed to change the way in which the supplement arrangements operate in regard to Hong Kong pensioners.

The present arrangements can in certain circumstances lead to abated payments of supplement and a fall in overall pension income. This is because the UK supplements are reduced if the Hong Kong dollar exchange rate rises above the level prevailing at the pensioner's date of retirement, but no account is taken of exchange falls.

HMG propose that such Hong Kong pensioners should in future receive the same level of UK increases as those paid to equivalent UK pensioners. This would involve a modification to the SPOS Regulations which would enable SPOS payments to increase (but not above the maximum SPOS entitlement, ie the increase of their UK counterpart) to reflect any drop in the sterling value of the basic pension.

This would not guarantee the purchasing power of the overall pension but would remove the anomaly which has vexed many of our existing pensioners.

The new arrangements will come into operation mid 1994.

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