Expats Lose Disability Benefits

Expats will no longer be able to claim full disability benefits after losing a legal battle in the European Court of Justice.

London, UK (Pryce Warner International) May 11th, 2011 – Previously, disabled Britons were eligible to retain full disability benefits despite living abroad, however the new ruling states that the full disability living allowance can no longer be claimed when the recipients move to another E.U. country.

E.U. rules dictate that disability benefits cannot be terminated merely because the recipient has moved abroad, however, special non-contributory benefits that are linked to residency, can be withheld.

The basis of the case was deciding the distinction between which elements of disability benefit can and can’t be exported. The U.K.’s disability allowance is made up of two sections, care and mobility, and the court has ruled that the “care” element may be exported but the “mobility” part may not. This means Disabled Expats will lose a significant portion of their allowance.

The case was brought by three recipients now living abroad and named in court documents as Ralph James Bartlett, Natalio Gonzalez Ramos, and Jason Michael Taylor.

When they first moved overseas their entire allowance was cut, then partially re-instated in 2007 after it was decided that the “care” elements was exportable.

But today they learnt they would not be getting the full reinstatement of payments.

The verdict stated that EU rules "allow the award of the mobility component of Disability Living Allowance to be made subject to conditions as to residence and presence in Great Britain".

This essentially means that only the partial “care” part of Disability allowance will be payable to those living overseas.

When moving overseas it is vital that you fully plan for your financial future. Anyone relying on any form of state income in the U.K., whether it be a pension or disability allowance, should ensure what portions of that income will be transferable overseas.

E.U. law dictates that residency is a strong component of eligibility towards most allowances, and therefore most will be lost when moving overseas.

Despite this, many E.U. nations will have equivalent allowances that people may be able to claim in their new host country.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International Group, specialists in the Provision of Pension Plan & Asset Management for Expatriates Worldwide commented: “This is an unfortunate blow to those that are already in a vulnerable position. Many disabled persons form a vital component of the E.U. economy and therefore should be entitled to some form of allowance wherever they choose to live or retire. Despite the news that U.K. based allowances will no longer be fully transferable, once residency is established in Expat’s new country, they may find themselves eligible for equivalent allowances in their new home. The process of transferring finances and allowances overseas can often be a complex process and it is vital that people doing so seek out as much information as possible before moving. Should any equivalent allowances not be available overseas, there are other avenues that Expat’s can explore to ensure that their finances are secured in the long-term. Pryce Warner International Group has over 35 years of experience in dealing with Expat finances and are fully able to advise Expats on how to maximize their income, regardless of their personal circumstances.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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