clapjam

Hi,

My wife and myself have lived in the US for nearly 16 years. My wife has paid into social security for 15 years and will qualify for a SS pension. She is currently 61.

We are both also fully paid up on our UK pensions, having paid voluntary contributions while living here.

My wife believes that she will receive both the UK pension and the US social security without a windfall reduction on the SS pension.

This is because (1) she did not work for a US employer where SS payment was not required. (2) She has also paid into both the SS and UK pension, so she is not trying to claim 2 pensions from one set of pension payments.

However, the social security windfall information is very vague and we don't really understand it.

Can anyone help throw light on this?

Many thanks,

clapjam

durham_lad

The way I understand that it works is that the portion of the UK OAP that was acquired from work does count in the WEP calculation, and the portion from voluntary contributions does not, because they were paid for from after tax earnings.

These days the OAP calculation is a straight line where 35 years gets the full pension, 20 years gets 20/35 of the pension etc. So, if your wife has 30 years of NI contributions of which 20 years were voluntary payments then 10/30 (1/3) of her OAP would used to calculate any WEP against her SS.

lansbury

Your wife will pay the Windfall, as you call it, on any part her UK pension which is not derived from the voluntary contributions. Or any other pension she receives based on a salary on which SS payments were not deducted.

WEP, if applicable, is only not deducted when a person has paid at least 30 years of SS contributions.

Pulaski

It's not just a US employer where SS payment was not required, it's any employer where SS payment was not required. I.e. an employer outside the US would be included as an "employer where SS payment was not required".

clapjam

Thanks Everyone for the very clear replies. We now understand much better the purpose of Windfall.

Thanks again,

clapjam

robin1234

Just to be clear, a Windfall is a good thing. A Windfall Elimination Provision is a bad thing.

Pulaski

Not if it has a maggot in it!