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Topic: UK State Pension and USA Social Security WEP  (Read 3633 times)

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UK State Pension and USA Social Security WEP
« on: December 03, 2015, 04:28:55 PM »
Apologies if this has been answered before, but I wasn't able to find if so.

I have now 9 years working in the UK.   And about 20 years of USA Social Security contributions prior to that.   I understand my US social security will be decreased as I'm below the 30 year threshold on the Windfall Elimination Provision.  My question is can these 9 years in the UK count towards the USA social security years threshold?   And if so, how do I report that?  Realising that I may sacrifice the UK state pension by doing so.   Or, will I end up with both a reduced US social security and a fairly small UK state pension?    Timing is kind of important as I may be moving back soon and might not hit the 10 year UK threshold, so could get a double whammy of nothing in the UK and the WEP in the USA.

Thanks in advance for any help!


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Re: UK State Pension and USA Social Security WEP
« Reply #1 on: December 03, 2015, 05:21:02 PM »
Ok, may have found it in a different thread and the SSA pamphlet which I've pasted below.  Remaining question would be does this also apply to WEP years or only getting to the threshold level for any benefit?  And if the UK years are 'counted' in the USA to avoid WEP, could I still receive a UK pension for those same years?  Probably not but I can dream.

"How credits get counted

You don't have to do anything to have your credits in one country counted by the other country.  If we need to count your credits under the U.K. system to help you qualify for a U.S. benefit, we will get a copy of your U.K. record directly from the United Kingdom when you apply for benefits.  If U.K. officials need to count your U.S. credits to help you qualify for a U.K. benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the U.K. benefit.

 Although each country may count your credits in the other country, your credits are not actually transferred from one country to the other.  They remain on your record in the country where you earned them and can also be used to qualify for benefits there."


Re: UK State Pension and USA Social Security WEP
« Reply #2 on: December 03, 2015, 05:50:32 PM »
Quote
This provision may affect you when you earn a pension from an employer who didn’t withhold Social Security taxes and you qualify for Social Security retirement or disability benefits from work in other jobs for which you did pay taxes

The UK working years can't be used to extend your US working years.  However, if you don't have enough UK years to be entitled to a UK pension, your UK working years shouldn't cause your US SS to be subject to WEP.  So you should be able to get your SS pension without a reduction, but no UK pension. 

Alternatively, you could use your US record to meet the threshold for a UK pension, and then your US SS would be subject to WEP.  You'd have to do the numbers to see which works out better for you.*

I think that if you do have enough UK work years to be entitled to a UK pension without using any US years, you would not be able to avoid WEP by not applying for the UK pension.  It's whether you're entitled to it that counts.  Not entirely sure on that, though.

* Correction: the SS pension is never reduced beyond 50% of the value of the uncovered pension, so you're better off with both pensions, even after WEP is applied.  There's a calculator at https://www.ssa.gov/planners/retire/anyPiaWepjs04.html which you can use to get an estimate of how much your WEP reduction might be.
« Last Edit: December 03, 2015, 06:53:52 PM by iota »


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Re: UK State Pension and USA Social Security WEP
« Reply #3 on: December 04, 2015, 02:29:42 PM »
Our opinion about the interaction of the WEP and the UK State Pension is different. Since this issue has come up before I looked back in my notes. I found there was a case we looked at for an Israeli who had his SS reduced after being called into the Embassy and fought it through three cases in Maryland, winning each time only to have the SS fellows ignore it again. The basis of the 2010 case he presented was that the Code provides for a limitation of the Soc Sec retirement pension by way of the WEP if there is other income from sources outside the USA. But in order for the WEP to bite, those other pensions must be funded by monetary contributions and not be a right of a social security contract (i.e. the UK State Pension does not count). Talking to my international peers, I understand there are several US Canadian cases of the same kind, not publicly reported, and therefore only an indication of the way a court would rule. At some time in the next year I will get details. I offered the case to the FPA in the USA to support for court costs as a pro bono item and public awareness and they refused.
RNW
'Consistently beating the average global asset manager'


Re: UK State Pension and USA Social Security WEP
« Reply #4 on: December 04, 2015, 07:54:31 PM »
That seems odd.  Why would the SSA ignore a court ruling?

The SSA website has a series of useful documents about Totalization Benefits and the WEP - begins at https://secure.ssa.gov/poms.nsf/lnx/0201701301

The Federal Benefits Unit at the London Embassy can answer case-specific questions.  I found them knowledgeable and helpful.




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