Totalization agreement UK and US
Jan 28th 2023, 2:33 pm
#1
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Totalization agreement UK and US
I hope I can explain this well enough. I have 45 credits in the USA social security system and have 35 years of full national insurance (NI) contributions in the UK. I am UK citizen living in the UK who worked in USA from 1995-2006. I used to receive annual paper statements from the SSA until it was all put online a few years back.
AFAIK, I qualify as "fully insured for regular benefits" status in the USA (40 credits or more) and will receive full UK state pension at 67.
My question concerns an official calculator called "anypia" which can be downloaded for free from SSA. This calculator has something in it which I don't quite understand which makes quite a difference in the calculated SS payments.
There is a "Worker Info" section in the calculator and there is a tick box for "Totalization benefit". If I leave this unticked, the calculated payment is higher than if it is ticked. I know there is a UK US agreement on totalization. Is that agreement meant for people who don't qualify for a full pension in either country? (not my situation as I have 45 US credits and 35 years of UK NI). It allows them to apply credits in one country to make up the shortfall in the other country to qualify for a full pension?
When I tick the "Totalization benefit" box in the "anypia" calculator, I receive the following pop-up warning:-
"Warning! You have selected a totalization benefit even though you are insured for regular benefits. The benefit estimate shown is hypothetical only."
This seems to suggest that I should not tick this box as I am fully qualified due to having 40 or more credits?
Does anybody know whether the "Totalization benefit" applies in my situation??
Thanks.
PS To get the calculator yourself just search for "anypia download" and you should see a link for it on the SSA website. I can't put a direct link as I have not made 5 posts. I am aware of WEP and its implications.
I just looked at the SSA pdf showing the agreement between UK and US and it does appear to me that if you qualify in both countries then the totalization agreement does not apply, see copied text below:-
"If you have Social Security credits in both the United States and the United Kingdom, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country’s system, you will get a regular benefit from that country. If you do not meet the basic requirements, the agreement may help you qualify for a benefit as explained below."
I guess that if you get 40 or more US credits, then SSA will initially pay you the same as an ordinary US citizen. I know that WEP will come into play when I claim. It would seem that I should leave the "Totalization benefit" box unchecked in the calculator. Confirm/deny??
TIA
UPDATE: I just found the user guide for the "anypia" calculator and it does confirm what I suspected, that if you qualify for regular benefits, the totalization benefit should be left unchecked. I've copied the relevant text from the user guide below:-
"Totalization agreements between the U.S. and foreign countries provide for limited coordination of U.S. and foreign social security programs. The agreements help eliminate situations where workers suffer a loss of benefit rights because they have divided their careers between the U.S. and a foreign country. Under an agreement, workers may qualify for partial U.S. or foreign benefits, called totalization benefits, based on combined work credits from both countries. In order to be eligible for totalization benefits, the worker must: 1) not be insured for benefits based on U.S. coverage alone, 2) have at least 6 quarters of coverage, and 3) have substantial work in a foreign country with a totalization agreement."
Apologies for wasting anybody's time, but this post may help others in the future navigate this maze.
AFAIK, I qualify as "fully insured for regular benefits" status in the USA (40 credits or more) and will receive full UK state pension at 67.
My question concerns an official calculator called "anypia" which can be downloaded for free from SSA. This calculator has something in it which I don't quite understand which makes quite a difference in the calculated SS payments.
There is a "Worker Info" section in the calculator and there is a tick box for "Totalization benefit". If I leave this unticked, the calculated payment is higher than if it is ticked. I know there is a UK US agreement on totalization. Is that agreement meant for people who don't qualify for a full pension in either country? (not my situation as I have 45 US credits and 35 years of UK NI). It allows them to apply credits in one country to make up the shortfall in the other country to qualify for a full pension?
When I tick the "Totalization benefit" box in the "anypia" calculator, I receive the following pop-up warning:-
"Warning! You have selected a totalization benefit even though you are insured for regular benefits. The benefit estimate shown is hypothetical only."
This seems to suggest that I should not tick this box as I am fully qualified due to having 40 or more credits?
Does anybody know whether the "Totalization benefit" applies in my situation??
Thanks.
PS To get the calculator yourself just search for "anypia download" and you should see a link for it on the SSA website. I can't put a direct link as I have not made 5 posts. I am aware of WEP and its implications.
I just looked at the SSA pdf showing the agreement between UK and US and it does appear to me that if you qualify in both countries then the totalization agreement does not apply, see copied text below:-
"If you have Social Security credits in both the United States and the United Kingdom, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country’s system, you will get a regular benefit from that country. If you do not meet the basic requirements, the agreement may help you qualify for a benefit as explained below."
I guess that if you get 40 or more US credits, then SSA will initially pay you the same as an ordinary US citizen. I know that WEP will come into play when I claim. It would seem that I should leave the "Totalization benefit" box unchecked in the calculator. Confirm/deny??
TIA
UPDATE: I just found the user guide for the "anypia" calculator and it does confirm what I suspected, that if you qualify for regular benefits, the totalization benefit should be left unchecked. I've copied the relevant text from the user guide below:-
"Totalization agreements between the U.S. and foreign countries provide for limited coordination of U.S. and foreign social security programs. The agreements help eliminate situations where workers suffer a loss of benefit rights because they have divided their careers between the U.S. and a foreign country. Under an agreement, workers may qualify for partial U.S. or foreign benefits, called totalization benefits, based on combined work credits from both countries. In order to be eligible for totalization benefits, the worker must: 1) not be insured for benefits based on U.S. coverage alone, 2) have at least 6 quarters of coverage, and 3) have substantial work in a foreign country with a totalization agreement."
Apologies for wasting anybody's time, but this post may help others in the future navigate this maze.
Last edited by ukmark62; Jan 28th 2023 at 2:59 pm.
Jan 30th 2023, 2:49 pm
#2
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Joined: Aug 2013
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Posts: 4,129
Re: Totalization agreement UK and US
I believe the Totalization Agreement is only used to top up contributions where you haven't earned enough credits. Since you have enough credits to qualify for SS and OAP then WEP is the only thing that you need to take into consideration as this will probably reduce your SS once you start claiming, but you are already aware of that.
Last edited by durham_lad; Jan 30th 2023 at 2:52 pm.
