Taking US Social Security early (from UK)

I have just put down the phone from a call I received from the US Embassy in London. I am trying to take US Social Security "pension" from age 62, and am living in the UK. I have looked into the consequences of taking SS early, the processes involved, other people'e experiences, etc., and was surprised at some of the things I was asked and told. So, I thought I'd ask the advice of those on here, as I've received helpful advice in the past.

Brief factual details:
I have paid the minimum 40 quarters/10 years into FICA and so am on the cusp of being eligible.

UK citizen, and UK resident pre-1983 and post-2006. Have never been a US citizen or GC holder.

Following a major car accident (if you can describe being broadsided at high speed by a drunk driver as an "accident"), I took voluntary redundancy and gave up working full-time in September 2017. Since then, I have had hardly any earnings, arising mainly from two small consultancy jobs. I have been living mainly off the voluntary severance payment, life savings and a small income from University Superannuation Scheme. I've also transferred most of my TIAA-CREF 403(b) to the UK to provide a cash buffer.

I'm currently not capable of working full-time due to the outcome of the car accident.

Issue 1 (potential refusal of early SS):
So ... I was surprised to be asked what I have been living off since I gave up work 16 months ago. When I mentioned that besides living off savings, I have earned a small income (ca. £2k) from two small consultancy contracts, the Embassy official said that early payment of Social Security is not designed to supplement the income of people living overseas. I was taken aback, as I have never heard this before! He asked, "So you are self-employed?" (Yes). "And when are you available to work?" (Any time; as the work is contract-based, I just do the job whenever I can). It was this (the fact I am self-employed and available to work any time) that he gave as the basis that I am "working".

Does anyone have any insight into what this is all about? I am scheduled for a phone "interview on mid-February, at which time he said I'd be questioned further about my "employment income", so I'd like to be pre-armed with information!

Issue 2 (disability status)
Additionally, he asked me if I am disabled, to which I replied that I am not registered as disabled (don't have a blue badge, not claiming disability benefits). However, after further questioning, he said that if I am not capable of substantial work (I think he gave 45 hrs/month as the criterion, which I am not capable of), this would class me as disabled for SS purposes. The effect of that would be that my early receipt of SS would not be reduced. He said I'd need to provide access to medical records, which I can certainly do.

Any advice gratefully received!

Hi. Kind of a shock, isn't it? I can only answer from the point of being a US citizen - I am not sure if NOT being a citizen would make a difference. You'd need to explore that carefully. As a USC, if you are less than full retirement age, you can still apply for social security at age 62. The caveat is that if you own a business (are self-employed) even if it makes no money, or work more than 45 hours in a calendar month, you'll lose the entire SS payment for that month.  This restriction ends when you are of full retirement age. After that point, you are free to do as you wish. https://www.ssa.gov/pubs/10137.html

If you are disabled and unable to work you might qualify for SSDI, I would think? https://www.ssa.gov/benefits/disability/  If you cannot work more than the 45 hours a month due to your medical condition, it sure might be a way to go for you. Normally you would not have been able to work for at least two years before you could qualify.

In the States they are very tough on what qualifies as "disabled", so you're going to need medical professionals to back you up when you claim that you can't do any work at all for more than the limited hours per month. (If you can work part time (say, 15 hours a week) sitting at a grocery store kiosk checking people out, they'll almost certainly disallow your claim.) SSDI will switch over to "regular" social security once you hit full retirement age.  https://www.disability-benefits-help.org/blog/disability-benefits-switch-retirement-65

Hope that helps!

Here's a non-government caculator that might be enlightening - I suspect that it could be in your interest to cease your self-employment and go early retirement SS, as you say you have enough quarters to qualify (40 quarters).  I plugged my own final salary numbers in and got a SSDI payment that is about $400 less than my straight retirement SS payment currently is.

https://www.allsup.com/ssdi-101?csc=AllsupOMB&utm_source=SSDI-101&utm_medium=landing-page/#_calc     

Hi. Kind of a shock, isn't it?   If you are less than full retirement age, you can still apply for social security at age 62. The caveat is that if you own a business (are self-employed) even if it makes no money, or work more than 40 hours in a calendar month, you'll lose the entire SS payment for that month.  This restriction ends when you are of full retirement age. After that point, you are free to do as you wish.

If you are disabled and unable to work you might qualify for SSDI, I would think? https://www.ssa.gov/benefits/disability/  If you cannot work more than the 40 hours a month due to your medical condition, it sure might be a way to go for you. Normally you would not have been able to work for at least two years before you could qualify.

In the States they are very tough on what qualifies as "disabled", so you're going to need medical professionals to back you up when you claim that you can't do any work at all for more than the limited hours per month. (If you can work part time (say, 15 hours a week) sitting at a grocery store kiosk checking people out, they'll almost certainly disallow your claim.) SSDI will switch over to "regular" social security once you hit full retirement age.  https://www.disability-benefits-help.org/blog/disability-benefits-switch-retirement-65

Hope that helps!

That certainly does help. I have never, ever seen this cited in any of the threads or posts I have seen before about claiming SS early. It seems weird that they single out the self-employed. I certainly don't own a business, I just contributed to two academic pieces of work that were paid a pretty measly stipend.

I *think* I'm not eligible for disability benefits because when I run the SS calculators it says so (maybe because I only have 10 years of FICA contributions?)

I think sometimes with these things, they put words in your mouth. "So, would you describe yourself as self-employed?" I answered yes because the two pieces of work were not done via an "employer", but I'd hardly say that earning £2k in 18 months makes me a self-employed business person!  I definitely won't ever work more than 40 hours in a given month, but it seems like an either/or situation (i.e., if you are self-employed, even if you don't get any business from one month to the next, or you work 40 hrs in employed work [not self-employed], you get stuffed.)

I am constantly amazed at how often I fall foul of some labyrinthine US rule or other. Story of my life!

Here's a non-government caculator that might be enlightening - I suspect that it could be in your interest to cease your self-employment and go early retirement SS, as you say you have enough quarters to qualify (40 quarters).  I plugged my own final salary numbers in and got a SSDI payment that is about $400 less than my straight retirement SS payment currently is.

https://www.allsup.com/ssdi-101?csc=AllsupOMB&utm_source=SSDI-101&utm_medium=landing-page/#_calc     

Thanks, have saved that to look at later. It's bizarre, because I did the one piece of contract work shortly after I gave up work (16 months ago), and the other piece of contract work last week. So the idea of giving up my self-employed "job" seems a bit of a nonsense!

Oh, so sorry you're having to deal with that!!

I would not, if it were up to me, consider you as self-employed. If/when you speak to them, if it were me, I'd definitely want to clarify that. If it were me I'd say I was confused about what constituted self-employment (perhaps your medication had made you groggy during the conversation?) and I definitely do not run a business.  I do not intend to do this as an ongoing sort of work. In fact, I fully intend to retire and cease all employment. If you've done your 40 quarters' credit of work, and you do not intend to be employed, you should be entitled to US Early Retirement SS at age 62. (It actually starts the month after you turn 62).

Yes, I was kind of shocked myself. I took early retirement last year. I had hoped to set up a hobby business (doing custom genealogy work) that was certainly not going to make a profit for years. However, I learned prior to applying that is verboten if you are accepting early retirement income AND live overseas. If I went to work and was paying into UK social security I could work the 45 (sorry, not 40 - I've corrected my original post) hours a month and still collect my  SS retirement, but I would have to report that income to SSA every month. Once I turn full retirement age I can open my business or work for a UK employer as many hours as I like without impacting my US SSA payment.

I'm still thrown a bit about the "being disabled would mitigate your not getting early SS retirement income" as that just doesn't sound right. But it could be some arcane rule for non-citizens? Worth investigating.

Hope this helps a little? Hang in there!

This might help, when you have time.

https://www.ssa.gov/OP_Home/handbook/hbkindex-E.html

Also, if you are an academic, be aware that they consider honoraria to be self-employment income, I think. So you can't accept an honorarium for helping with a work.

And, from https://www.ssa.gov/planners/disability/qualify.html:

The number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.

It's also interesting that they asked you how you've been supporting yourself since you were injured. I quit my job and lived off savings before I pulled early retirement from my private pension, some time prior to applying for SS.  Nobody asked how I'd been supporting myself.  Something seems odd here.

Oh, the corker?  The rules are different if you are living in the USA.  https://www.nolo.com/legal-encyclopedia/reduction-social-security-early-retirement-the-self-employed.html  Which is probably why you never were aware of this little gem of a sub-regulation.

Best wishes with it all!

This might help, when you have time.

https://www.ssa.gov/OP_Home/handbook/hbkindex-E.html

Also, if you are an academic, be aware that they consider honoraria to be self-employment income, I think. So you can't accept an honorarium for helping with a work.

And, from https://www.ssa.gov/planners/disability/qualify.html:

The number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.

It's also interesting that they asked you how you've been supporting yourself since you were injured. I quit my job and lived off savings before I pulled early retirement from my private pension, some time prior to applying for SS.  Nobody asked how I'd been supporting myself.  Something seems odd here.

Oh, the corker?  The rules are different if you are living in the USA.  https://www.nolo.com/legal-encyclopedia/reduction-social-security-early-retirement-the-self-employed.html  Which is probably why you never were aware of this little gem of a sub-regulation.

Best wishes with it all!

Thanks for the additional information. As usual with these things, it's a steep learning curve!

I don't think I am eligible for SSDI because I haven't worked in SS-related employment since 2006. However, I don't know if SSDI is what he was referring to - he seemed to be saying that if I were unable to work (which is how, with a few additional conditions, he was defining disabled; I didn't need to be registered disabled or receiving disability benefits here), my early retirement (age 62) SS payments would not be reduced. In other words, I'd be paid the amount I would get if I waited until age 66 and a bit.

I think you are right - I need to get them to understand my situation better. I was thrown by the fact I wasn't expecting the questions, and by the way he was asking them. I also do struggle a bit conversationally due to the persisting brain conditions from getting whacked on the noggin thanks to previously mentioned drunk driver. I am definitely not a business owner and from reading what you sent me, as long as I work fewer than 45 hours in a given month, my SS won't be affected (need to re-read to be sure, though!)

I note you said, "I quit my job and lived off savings before I pulled early retirement from my private pension, some time prior to applying for SS." Presumably you worked long enough in SS-related employment to not get WEP'ed when you started taking SS? He was asking questions that related to WEP, also (I won't receive my [reduced] state pension until age 66, which will trigger WEP at that point). Sources of information on WEP vary - some imply that *any* non-SS "pension" triggers WEP, others indicate only governmental (local, regional or national) non-SS pensions trigger WEP. I asked him straight out about SIPPs and he said they don't trigger WEP. Very ambiguous.

Thanks for the additional information. As usual with these things, it's a steep learning curve!

I don't think I am eligible for SSDI because I haven't worked in SS-related employment since 2006. However, I don't know if SSDI is what he was referring to - he seemed to be saying that if I were unable to work (which is how, with a few additional conditions, he was defining disabled; I didn't need to be registered disabled or receiving disability benefits here), my early retirement (age 62) SS payments would not be reduced. In other words, I'd be paid the amount I would get if I waited until age 66 and a bit.

Yes, you have to have worked the minimum number of credits in the 10 years immediately prior to becoming disabled. So if you haven't worked for US social security wages since 2006 and were disabled in 2017, you would not be eligible for SSDI. (They do use the word "generally" so perhaps there is a special circumstance clause? I'd investigate that, just in case.)

This bit about full benefit doesn't sound right. I hope I'm incorrect. Perhaps it has something to do with the US/UK social security agreement? If you've been paying on UK Social Security since 2006, perhaps that mitigates?  Waaaay out of my knowledge, sorry!

I think you are right - I need to get them to understand my situation better. I was thrown by the fact I wasn't expecting the questions, and by the way he was asking them. I also do struggle a bit conversationally due to the persisting brain conditions from getting whacked on the noggin thanks to previously mentioned drunk driver. I am definitely not a business owner and from reading what you sent me, as long as I work fewer than 45 hours in a given month, my SS won't be affected (need to re-read to be sure, though!)

Yes, but it can't be self-employment. AKA, no authoring. You can work for a UK business for up to 45 hours a month, is my understanding. If you work 45.5, you'll lose the entire month's SS payment, so be careful. You will have to report it all to the SSA every month. And they will check.

I note you said, "I quit my job and lived off savings before I pulled early retirement from my private pension, some time prior to applying for SS." Presumably you worked long enough in SS-related employment to not get WEP'ed when you started taking SS? He was asking questions that related to WEP, also (I won't receive my [reduced] state pension until age 66, which will trigger WEP at that point). Sources of information on WEP vary - some imply that *any* non-SS "pension" triggers WEP, others indicate only governmental (local, regional or national) non-SS pensions trigger WEP. I asked him straight out about SIPPs and he said they don't trigger WEP. Very ambiguous.

Afraid none of the above applies to me, as I moved here from the USA only in 2017. I have never been employed in the UK. (Not that I didn't try!) There will be others who have work histories in both places who should be able to help you out, though.

Good luck, and take care of yourself!

(They do use the word "generally" so perhaps there is a special circumstance clause? I'd investigate that, just in case.)

One such exception that I'm aware of is if you became disabled before age 22 you can (depending on whether your parents are living/working/retirement age yet or not - I'm not sure of those details) get a disability benefit based off of your parents' work record without needing one of your own (and if you become disabled within a few years or so after that point - I don't know the specifics there either - the work history requirement is lower).