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Old Sep 22nd 2011, 7:42 pm   #1
2bretired Male
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Default UK state pension and USA social security

Just received my UK form for my UK state pension. I presently receive my USA social security and was wondering if I can also collect my UK state pension as I have been paying in my voluntary NIC over the years and have the required years for full UK state pension.

I think I can but am a little worried about putting my USA social security number on the form and opening up a can of worms. I will be claiming the UK pension on my US tax return.

Any suggestions.

Bob.
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Old Sep 22nd 2011, 8:03 pm   #2
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Default Re: UK state pension and USA social security

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Originally Posted by 2bretired View Post
Just received my UK form for my UK state pension. I presently receive my USA social security and was wondering if I can also collect my UK state pension as I have been paying in my voluntary NIC over the years and have the required years for full UK state pension.

I think I can but am a little worried about putting my USA social security number on the form and opening up a can of worms. I will be claiming the UK pension on my US tax return.

Any suggestions.

Bob.
From what I have read on the subject, you will be entitled to receive in full whatever UK pension you have qualified for.

Explain to the UK Pension service that you want no Tax deducted because you are not resident, but then it is likely to be below your UK personal allowance anyway.

But be aware that US will reduce your US SS by an amount calculated on your other (in your case UK) pension, which you must tell them about.

This occurs under the ruling of Windfall Elimination Provision (WEP) and roughly will amount to $1 reduction in US SS for every $2 dollars of 'other' pension, but no greater reduction than 50%. So at worse you will receive only half of your UK pension - but half is better than none.

http://www.ssa.gov/pubs/10045.html

Here's a thought; If you defer your UK pension it will increase by a % growth until the time you take it - so you may consider doing the figures, take it now and lose part your US to WEP - or defer for a larger UK pension later and keep your full US until you eventually take your UK and consequent WEP impact..
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Old Sep 22nd 2011, 9:43 pm   #3
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Default Re: UK state pension and USA social security

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Originally Posted by J.J View Post
From what I have read on the subject, you will be entitled to receive in full whatever UK pension you have qualified for.

Explain to the UK Pension service that you want no Tax deducted because you are not resident, but then it is likely to be below your UK personal allowance anyway.

But be aware that US will reduce your US SS by an amount calculated on your other (in your case UK) pension, which you must tell them about.

This occurs under the ruling of Windfall Elimination Provision (WEP) and roughly will amount to $1 reduction in US SS for every $2 dollars of 'other' pension, but no greater reduction than 50%. So at worse you will receive only half of your UK pension - but half is better than none.

http://www.ssa.gov/pubs/10045.html

Here's a thought; If you defer your UK pension it will increase by a % growth until the time you take it - so you may consider doing the figures, take it now and lose part your US to WEP - or defer for a larger UK pension later and keep your full US until you eventually take your UK and consequent WEP impact..
Doesn't the Windfall Provision only apply to people below a certain level of SS contributions? I thoght if you had something like 30 years of SS contributions, the Windfall Provision didn't apply? Maybe I dreamt that?
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Old Sep 22nd 2011, 10:46 pm   #4
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Default Re: UK state pension and USA social security

As far as I understand I do not think the WEP effects me as I got full USA social security from work performed in the USA since 1976. My UK pension is derived from the years worked before I emigrated to the USA and the payment of voluntary NI contributions ever since to make up the difference.

I suppose the question I have is should I put my US social security number on the UK form as requested.

Bob

Last edited by 2bretired : Sep 22nd 2011 at 11:08 pm.
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Old Sep 22nd 2011, 11:07 pm   #5
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Default Re: UK state pension and USA social security

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Originally Posted by 2bretired View Post
As far as I understand I do not think the WEP effects me as I got full USA social security from work performed in the USA since 1976. My UK pension is derived from the years worked before I emigrated to the USA and the payment of voluntary NI contributions ever since.

Bob
You're golden. You are entitled to bothe SS and UK state pension and as you have over 30 years of US SS payments there's no WEP. Also these SS type government payments are only taxable where you reside
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Old Sep 23rd 2011, 12:11 am   #6
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Default Re: UK state pension and USA social security

Thanks Nun,
I was just concerned at putting the wrong info on the form. What is my nationality. I am a dual national British and a USA citizen. I am not a dual national as far as the US in concerned but the UK does not care. Apparently you never loose your British nationality if you were born there.
I presume the reason they want my US social security number on the form is if I did not have enough years there is some sort of reciprocal agreement.

I took my US social security early ( thus reduced) due to lay off and hoped that my UK pension would make up the difference.

Bob

Last edited by 2bretired : Sep 23rd 2011 at 12:36 am.
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Old Sep 24th 2011, 5:37 pm   #7
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Default Re: UK state pension and USA social security

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Originally Posted by 2bretired View Post
Thanks Nun,
I was just concerned at putting the wrong info on the form. What is my nationality. I am a dual national British and a USA citizen. I am not a dual national as far as the US in concerned but the UK does not care. Apparently you never loose your British nationality if you were born there.
I presume the reason they want my US social security number on the form is if I did not have enough years there is some sort of reciprocal agreement.

I took my US social security early ( thus reduced) due to lay off and hoped that my UK pension would make up the difference.

Bob
If you have enough credits to qualify for pensions form US and UK the reciprocal agreement isn't relevant. I don't se why you need to put SS number on your UK form surely your NI number is what they want. However, where it might be relevant is in proving you are not resident in the UK. You need to get the IRS to communicate with HMRC so that no UK tax is taken out of your UK SS as it is only taxable in the US.
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Old Sep 25th 2011, 4:04 pm   #8
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Default Re: UK state pension and USA social security

Nun,
The form IPCBR1 to fill out is like a mini booklet 20 pages long.

Part 6 'About other benefits or entitlements' the question "Are you, your husband,wife getting social security benefits from another country"

Part 7 'Did you pay into the social security scheme of that country' if so they want social security reference number and address.

Part 10 Declaration. This is were you declare the information given on this form is correct and complete.

I also got form IPC1394 direct payment of pension into my USA bank.

I will be declaring my UK pension on my US tax return. I was told the UK does not tax state pensions so informing IRS is not a concern.

The only reciprocal agreement I am concerned about is any cost of living raises. Because the USA has reciprocal agreement I supposed to get any UK raises.

My concern is privacy not giving information that is not necessary to receive my UK pension. But if I do not give what I think is unnecessary information I am in effect falsifying my declaration.

I hope this helps anybody else in the same boat.

Bob
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Old Sep 25th 2011, 7:36 pm   #9
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Default Re: UK state pension and USA social security

If there is a place to enter SS the do it. As you live in the US you should get UK SS index linked increases. The US SS will want to know about your UK pension for WEP purposes, but if you have 30 years of SS credits there won't be any WEP, but your UK SS will be taxed by the IRS as you must enter it on your 1040
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Old Jun 18th 2012, 9:32 pm   #10
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Default Re: UK state pension and USA social security

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Originally Posted by 2bretired View Post
As far as I understand I do not think the WEP effects me as I got full USA social security from work performed in the USA since 1976. My UK pension is derived from the years worked before I emigrated to the USA and the payment of voluntary NI contributions ever since to make up the difference.

I suppose the question I have is should I put my US social security number on the UK form as requested.

Bob
Hi Bob,

I'm actually in the same position and would appreciate any feedback you might now have on what to expect! Did you put your SS# on the UK form?

I'm taking US SS now, early at 62, and will receive a UK State Pension in 2014 of which I have made Class 3 Voluntary NI Contributions for seventeen of the thirty years required for a full pension. Thirteen years of my UK pension is calculated before my emigration to the US in December 1975 and is reported as credits.

The small amount of work I did just before emigration on the new NI system is shown as the NI Class 1 Contribution amount.

As you may know, the UK changed the system in April 1975 to a work based pension from, what I understand, a residency based pension. Although I worked in the UK before April 1975, my understanding is that any pension I receive related to pre-April 1975 is not subject to WEP.

My understanding of the WEP is that it is based on Worked Income, not on Voluntary Class 3 NI contributions.

If you have had 30 years of Substantial Earnings in the US you will not be subject to WEP for your UK Pension under any circumstances. You can see what is meant by Substantial Earnings by following this link:

http://www.ssa.gov/pubs/10045.html#a0=3

Any feedback about your experience with the process would be greatly appreciated.

Thank you,

Matt
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Old Jun 19th 2012, 6:25 pm   #11
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Default Re: UK state pension and USA social security

Matt,
Presently I am in England taking care of my parents and all my records are in the USA. From my memory, WEP did not effect me as I had 30 years USA SS payments. Yes I think I put my SS on the UK form. I had the full amount of years for full UK pension. 13 years of pre 1976 work earning the rest paid in as voluntary payments until they said I did not need to pay any more as they reduced the years required. Presently I get full UK pension which is eligible for increases. They can pay it into any bank worldwide(excluding some country's) at the prevailing exchange rate.The bonus is my wife also gets a reduced UK pension when she is 62 based on mine and she is a USA citizen.

Sorry I cannot be any more help, as I said all my record are at home in the USA. I will be here for another 3 weeks. By the way all this extra pension is taxed as ordinary income. Off the top of my head it is classed as an annuity on your 1040.

Bob
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Old Jun 19th 2012, 6:42 pm   #12
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Default Re: UK state pension and USA social security

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Matt,
Presently I am in England taking care of my parents and all my records are in the USA. From my memory, WEP did not effect me as I had 30 years USA SS payments. Yes I think I put my SS on the UK form. I had the full amount of years for full UK pension. 13 years of pre 1976 work earning the rest paid in as voluntary payments until they said I did not need to pay any more as they reduced the years required. Presently I get full UK pension which is eligible for increases. They can pay it into any bank worldwide(excluding some country's) at the prevailing exchange rate.The bonus is my wife also gets a reduced UK pension when she is 62 based on mine and she is a USA citizen.

Sorry I cannot be any more help, as I said all my record are at home in the USA. I will be here for another 3 weeks. By the way all this extra pension is taxed as ordinary income. Off the top of my head it is classed as an annuity on your 1040.

Bob
Bob, thanks for your reply. It was very helpful. I'm also making sure my wife (who is American born) will receive some UK Pension in a couple of years when I draw UK SS.

All the best with your parents and thanks again.

Matt
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Old Jun 22nd 2012, 8:51 pm   #13
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Default Re: UK state pension and USA social security

Hello all - I was so glad to find this thread. I am a 63 year old expat from Scotland. I will receive a UK state pension, currently deferred, derived from a combination of work credits and voluntary NICs. I will also receive US Social Security when I retire.

Now for the sticky part - I am a FERS Federal government employee and I understand all FERS employees are exempt from WEP. Does that mean I won't be affected by WEP? Will my foreign UK pension, earned between 1972-1980 when I was a UK resident, UK citizen and UK employee, cause complications?

I have received many different answers. Any help from the audience?
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Old Jun 26th 2012, 11:37 pm   #14
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Hello all - I was so glad to find this thread. I am a 63 year old expat from Scotland. I will receive a UK state pension, currently deferred, derived from a combination of work credits and voluntary NICs. I will also receive US Social Security when I retire.

Now for the sticky part - I am a FERS Federal government employee and I understand all FERS employees are exempt from WEP. Does that mean I won't be affected by WEP? Will my foreign UK pension, earned between 1972-1980 when I was a UK resident, UK citizen and UK employee, cause complications?

I have received many different answers. Any help from the audience?
Nun, will probably able to tell you for sure. It looks to me as if you will have a GPO/WEP reduction on your SS benefit - calculated from the earned part of your UK Pension - unless you have thirty years of Sustainable Earnings in the United States.

Probably best to check with Social Security directly.

Be thankful though you didn't work thirty years in Scotland because you'd have to work another thirty years here, earning at the Sustainable Earnings threshold every year, to avoid a WEP reduction to your social security benefit. By that time you probably wouldn't care!
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Old Jun 27th 2012, 12:46 pm   #15
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Default Re: UK state pension and USA social security

mattlmt: Thank you very much for your reply. I am not eligible to receive private posts yet, either that or it's too early in the day for me to figure it out. I was hoping my FERS status would provide immunity; however I have just a few years left to the finish line. Every year provides less WEP impact. SSA have provided fuzzy responses (mail, phone, in person) and I'm trying to get a definitive response to help with my retirement planning.
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