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Class 2 NI. What about us poor expats paying voluntary contributions?

Class 2 NI. What about us poor expats paying voluntary contributions?

Old Jan 2nd 2024, 4:37 pm
  #691  
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

From what you have said you likely qualify for at least 25% of the full state pension, and probably quite a bit more than that. Also, because you are now 70, it will be increased by about 5% per year for the number of years between the date you were initially eligible (likely around age 65) and 70. Social Security may apply WEP when you get a UK pension. That would reduce Social Security by 50 cents for every dollar of UK pension up to a limit of about $500 per month, but you still come out ahead, so don’t worry about that. Whether WEP applies is dependent upon how many years you worked in the US, and other factors. Social Security will calculate that for you. All you have to do is to tell them when you start to receive a UK pension.

So go ahead and claim from the UK without delay. If for some reason you don’t qualify they will tell you, but you almost certainly do. No need to do any research. Enjoy the bonus!

Last edited by Glasgow Girl; Jan 2nd 2024 at 4:47 pm. Reason: Added WEP comment
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Old Jan 2nd 2024, 5:00 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by tdrinker
It means you get a pro-rated pension, so if you have 10 years' contributions out of the 35 required for a full new state pension, you get 10/35ths of the full pension amount.

You might have 2 credited years if you were at school for 6th form. The part-time working years may also count, and you may be due some credits for your child care years. The best option is to make a note of the dates you were at school, worked, were a stay at home mum, etc., read the guidance in the MSE link mrken30 provided to work out what credits or anything else you might be entitled to, and contact the Pension Service. Patience will probably be required, as getting a response could be slow but it'll be worth it if you are due a pension.
Thank you!
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Old Jan 2nd 2024, 5:00 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Glasgow Girl
From what you have said you likely qualify for at least 25% of the full state pension, and probably quite a bit more than that. Also, because you are now 70, it will be increased by about 5% per year for the number of years between the date you were initially eligible (likely around age 65) and 70. Social Security may apply WEP when you get a UK pension. That would reduce Social Security by 50 cents for every dollar of UK pension up to a limit of about $500 per month, but you still come out ahead, so don’t worry about that. Whether WEP applies is dependent upon how many years you worked in the US, and other factors. Social Security will calculate that for you. All you have to do is to tell them when you start to receive a UK pension.

So go ahead and claim from the UK without delay. If for some reason you don’t qualify they will tell you, but you almost certainly do. No need to do any research. Enjoy the bonus!
Thank you!
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Old Jan 2nd 2024, 5:07 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Glasgow Girl
..... Social Security may apply WEP when you get a UK pension. That would reduce Social Security by 50 cents for every dollar of UK pension up to a limit of about $500 per month, but you still come out ahead, so don’t worry about that. .....
If she is 70 and has lived in the US "well over half her life", depending on how many of those years she contributed to SS, it is likely that WEP will be low (it tapers after 20 years of (substantial) contributions) and doesn't apply at all after 30 years of (substantial) contributions.
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Old Jan 2nd 2024, 5:26 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Pulaski
If she is 70 and has lived in the US "well over half her life", depending on how many of those years she contributed to SS, it is likely that WEP will be low (it tapers after 20 years of (substantial) contributions) and doesn't apply at all after 30 years of (substantial) contributions.
I guess I didn't phrase it well. I moved to the US when I was 37 but couldn't work for the first 2 years I was here (I cannot remember what visa I was on - I was married at the time and my husband (British) could work but I couldn't. I got my Green card to work when I was 39. Believe it or not, although I am 70 I still work part time to supplement my social security. That way I can put off withdrawing from my 401K until I reach 73.
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Old Jan 2nd 2024, 6:13 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Derrygal
I guess I didn't phrase it well. I moved to the US when I was 37 but couldn't work for the first 2 years I was here (I cannot remember what visa I was on - I was married at the time and my husband (British) could work but I couldn't. I got my Green card to work when I was 39. Believe it or not, although I am 70 I still work part time to supplement my social security. That way I can put off withdrawing from my 401K until I reach 73.
No, you phrased it more than well enough, given the length of time you've been living in the US, to draw a "likely" conclusion, that WEP will have little or no impact on your SS income. ..... So depending on in how many years you had "substantial" earnings (currently around $29k IIRC, but lower in earlier years) your SS will experience little or no WEP deductions.

I believe that any WEP calculation is cut off at standard retirement age, so 65 in your case, and the number of years of (substantial) contributions presumably started when you were 39, so that would mean a maximum of 26 years, meaning that partial WEP will be applied. I don't know the formula for the tapered amount though, but given that the tapered period is between 20 and 30 years, I would guess that you'll only face about 40% of the gross WEP deduction, so instead of 50c/$1 of UK state pension you receive, it will, I'm guessing, be about 20c/$1.

Last edited by Pulaski; Jan 2nd 2024 at 7:46 pm.
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Old Jan 2nd 2024, 6:24 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Pulaski
So depending on in how many years you had "substantial" earnings (currently around $29k IIRC, but lower in earlier years) your SS will experience little or no WEP deductions.
Thank you!
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Old Jan 2nd 2024, 7:24 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

My wife was in a similar position and she received 6 years NI during the time our 2 children were below school age and she was not working. Definitely worth applying for OAP I think.
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Old Jan 3rd 2024, 4:06 am
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Derrygal
...Home Responsibilites Protection - she said all the years I was living in England and taking care of my children is taken into account. Has anyone ever heard of such a thing??????????????? My sister said I should apply, but to be honest, I don't feel comfortable doing that. I don't think I am entitled to anything and shouldn't get anything...
Yes. It used to be deducted from the denominator in the calculation, but is now added to the numerator, which makes you eligible, and is more favorable. Don't feel uncomfortable applying- you're just claiming for your period living in the UK, while others get full pensions based on contributing nominal amounts while abroad.

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Old Jan 6th 2024, 1:14 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by 00derek
Was your application on form CF83?
Website says my application was received 10 AUG 2023, and I can expect a reply by 13 JUNE 2024.
Feels like the process is getting quicker compared with the last 12-24 months....Will update if that changes.
Yes - I submitted it on form CF83
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Old Jan 23rd 2024, 3:03 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

16 July 2023 - Sent CF83 and cover letter
28 July 2023 - Shows as received in online portal
15 January 2024 - Letter dated from HMRC, sent to family in UK
19 January 2024 - Letter received by family in UK.

-- Accepting application to pay Voluntary Class 2 NICs
-- Accepting application to pay by annual payment [i.e. not direct debit]
-- Confirming amount to pay for 2022-2023 (14 weeks * £3.15 = £44.10) by deadline of 5 April 2025, which I have now done.

What I'm not sure is when I should send payment for 2023-2024 (52 x £3.45 = £179.40). Anybody know if this can be sent now so it's done, or if I should wait until the tax year is over and send it in perhaps May/June?
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Old Jan 23rd 2024, 3:07 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by LT1
What I'm not sure is when I should send payment for 2023-2024 (52 x £3.45 = £179.40). Anybody know if this can be sent now so it's done, or if I should wait until the tax year is over and send it in perhaps May/June?
I think you would need to wait for a bill before you submitted that payment.
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Old Jan 23rd 2024, 3:11 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by LT1
16 July 2023 - Sent CF83 and cover letter
28 July 2023 - Shows as received in online portal
15 January 2024 - Letter dated from HMRC, sent to family in UK
19 January 2024 - Letter received by family in UK.

-- Accepting application to pay Voluntary Class 2 NICs
-- Accepting application to pay by annual payment [i.e. not direct debit]
-- Confirming amount to pay for 2022-2023 (14 weeks * £3.15 = £44.10) by deadline of 5 April 2025, which I have now done.

What I'm not sure is when I should send payment for 2023-2024 (52 x £3.45 = £179.40). Anybody know if this can be sent now so it's done, or if I should wait until the tax year is over and send it in perhaps May/June?

Congrats on getting a reply!

My app still says:
16 June 2023 - Shows as received in online portal

Did you receive any email or notification on the app after you received the letter?
Sorry doesn't answer your question but I sent in mine before you and still have heard nothing unless the letter got lost in the post overseas!
You did not select direct debit then? I chose this method so I assume I'll get a notification from the bank if a DD is processed.

Thanks
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Old Jan 23rd 2024, 3:13 pm
  #704  
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by stephend-
I think you would need to wait for a bill before you submitted that payment.
Ah thanks, I didn't realise they would send a bill each year. If so, that makes life much simpler, and yes, just wait till the bill and send the next day.
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Old Jan 23rd 2024, 3:14 pm
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Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by alfista1
Did you receive any email or notification on the app after you received the letter?
You did not select direct debit then? I chose this method so I assume I'll get a notification from the bank if a DD is processed.
-- No email or notification I'm afraid. Just whatsapp pics of the letter from my family when it arrived with them!
-- No, I prefer to be in control to send money rather than DD pulled from my account. Same for every bill even when I was in the UK.
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