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National Insurance

Old Jun 22nd 2012, 1:41 pm
  #46  
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Default Re: National Insurance

Originally Posted by fsm View Post
So if my reading of everything is correct if I may ke contributions, I would when I retire receive.

Full US Pension
US work pension
401K
Full UK pension
NPI pension

If I pass before retirement, would my American wife have any entitlement to my UK pension? (NPI, i have to place it trust or mention it in my will)
Sounds right, the 30 years of US SS protects you from WEP.

If you are married to a spouse with no NI contributions you will get 160% of the UK state pension.

If you die before retirement the surviving spouse can apply to have the dead spouse's NI contributions used in calculating their benefit if they don't have sufficient NI contributions of their own. However, if the spouse remarries they can't do that. So if your American wife does not remarry after you die she can apply for a UK state pension based on your NI contributions

Last edited by nun; Jun 22nd 2012 at 2:06 pm.
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Old Jun 22nd 2012, 1:54 pm
  #47  
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Default Re: National Insurance

Originally Posted by nun View Post
Sounds right, the 30 years of US SS protects you from WEP.

If you die before retirement the surviving spouse can apply to have the dead spouse's NI contributions used in calculating their benefit if they don't have sufficient NI contributions of their own. However, if the spouse remarries they can't do that. So if your American wife does not remarry after you die she can apply for a UK state pension based on your NI contributions
Nun...are you saying that you get the full UK and US gov pension? I thought the US took the UK pension from the US pension and paid you the remaining balance? I remember Rete saying this happened to her Canadian husband when he started to draw his US pension.
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Old Jun 22nd 2012, 2:04 pm
  #48  
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Default Re: National Insurance

Originally Posted by Jerseygirl View Post
Nun...are you saying that you get the full UK and US gov pension? I thought the US took the UK pension from the US pension and paid you the remaining balance? I remember Rete saying this happened to her Canadian husband when he started to draw his US pension.
Yes, if you have 30 years of US SS payments the WEP does not apply and you will get full US SS whatever non-SS wage pensions you get. Also the current maximum amount your US SS can be reduced by WEP is $383.5/month and it can also never be more than 50% of the non SS wage pension.

Last edited by nun; Jun 22nd 2012 at 2:07 pm.
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Old Jun 22nd 2012, 2:06 pm
  #49  
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Default Re: National Insurance

Originally Posted by nun View Post
Yes, if you have 30 years of US SS payments the WEP does not apply and you will get full US SS whatever non-SS wage pensions you get.
30 years...bummer. So less than 30 years the UK pension is deducted from the US pension?
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Old Jun 22nd 2012, 3:06 pm
  #50  
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Default Re: National Insurance

I'm 45, I left the UK in 2003 and have been paying class 3 NI contributions ever since by direct debit from my UK bank account, I only have about 2 years left after this one till I've paid in enough qualifying years. I thought that was what I needed to do to get a full pension. However, all the posts in this thread have confused me - have I wasted my money paying class 3 contributions - should I stop and pay the much cheaper class 2 instead for the remainder of the time? My finances are very tight and I could do with the extra cash! I have been working full time in the US since 2004.
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Old Jun 22nd 2012, 3:10 pm
  #51  
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Default Re: National Insurance

Originally Posted by Jerseygirl View Post
30 years...bummer. So less than 30 years the UK pension is deducted from the US pension?
No the UK pension is not deducted dollar for dollar, again the max amount your US SS can be reduced is $383 a month. Also you will not be WEPed if your UK state pension is from voluntary NI contributions
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Old Jun 22nd 2012, 3:13 pm
  #52  
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Default Re: National Insurance

Originally Posted by nun View Post
No the UK pension is not deducted dollar for dollar, again the max amount your US SS can be reduced is $383 a month. Also you will not be WEPed if your UK state pension is from voluntary NI contributions
Thank you for clearing that up.
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Old Jun 22nd 2012, 3:41 pm
  #53  
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Default Re: National Insurance

Originally Posted by nun View Post
No the UK pension is not deducted dollar for dollar, again the max amount your US SS can be reduced is $383 a month. Also you will not be WEPed if your UK state pension is from voluntary NI contributions
And also the WEPing tapers off when you have between 20 and 30 years of US SS contributions. There isn't a "cliff" at 30 years where the WEP suddenly disappears.
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Old Jun 22nd 2012, 4:06 pm
  #54  
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Default Re: National Insurance

Thanks for the update on this Class 2 or Class 3 Contributions.

My understanding is Class 2 Contributions are self-employed contributions and not Voluntary Contributions as such.

If this is so, would I be right in assuming that you could be considered as double dipping on both the UK and US system for the same work, which I think is contrary to the UK/US Agreement irrespective of WEP.

You do need thirty years of Sustainable Earnings in the US to avoid WEP on the worked portion of your UK Pension.

The best way to deal with WEP is repeal it, so I would appreciate if everyone would sign the petition for a bill that is under review in the Financial Committee of the Senate:

http://signon.org/sign/social-securi...mt&r_by=695993

Thanks,

Matt
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Old Jun 22nd 2012, 5:48 pm
  #55  
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Default Re: National Insurance

Can someone confirm the difference between class 2 and class 3 contributions?

I have about 15 years to pay in order to get my 30 years in and be eligible for a UK pension. If I choose to make voluntary contributions, but my husband does not, can we still claim the additional amount for a couples pension rate (160% of the single rate I think?)
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Old Jun 22nd 2012, 5:54 pm
  #56  
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Default Re: National Insurance

I wonder why the worked portion of a pension is considered a windfall and the voluntary portion is not? All very confusing. Is someone like my husband who will probably have half and half in the worst position?
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Old Jun 22nd 2012, 6:27 pm
  #57  
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Default Re: National Insurance

Originally Posted by Sally Redux View Post
I wonder why the worked portion of a pension is considered a windfall....
Excellent! The use of the word windfall in this context ranks up there with the term collateral damage.

Originally Posted by Sally Redux View Post
Is someone like my husband who will probably have half and half in the worst position?
Not the worst, but not the best either. I'm in a similar position to your husband's future situation. The UK State pension is paltry (for me, 18/44. I took the pension prior to the new reduction to 30 qualifying years), and what little US SS I receive is reduced by 50% (on first break amount only) due to UK pensions.

Hopefully it will change in future (and pigs may fly).
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Old Jun 22nd 2012, 6:31 pm
  #58  
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Default Re: National Insurance

Originally Posted by theOAP View Post
Excellent! The use of the word windfall in this context ranks up there with the term collateral damage.



Not the worst, but not the best either. I'm in a similar position to your husband's future situation. The UK State pension is paltry (for me, 18/44. I took the pension prior to the new reduction to 30 qualifying years), and what little US SS I receive is reduced by 50% (on first break amount only) due to UK pensions.

Hopefully it will change in future (and pigs may fly).
Gives me a chance to use this one
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Old Jun 22nd 2012, 6:40 pm
  #59  
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Default Re: National Insurance

Originally Posted by Sally Redux View Post
I wonder why the worked portion of a pension is considered a windfall and the voluntary portion is not? All very confusing. Is someone like my husband who will probably have half and half in the worst position?
Sally,

It all goes back to the US Social Security position that lower paid workers get a higher percentage return for the money they have put in the system in relation to Higher Paid workers. I think they quote a 55% to 25% on the US SSA website. The US system has nothing to do with need, but entitlement.

The WEP deduction on foreign worked pensions, where a person has not accomplished thirty years of worked sustainable income in the United States, is supposed to equalize or reduce entitlement compared to those who have had thirty years of Sustainable Earnings!

That it discriminates against immigrants who rely on both systems is part of the story of the current attempts to repeal WEP. As mentioned in other posts, I encourage you to write to your senators/rep and sign the petition linked here. If we get WEP repealed everyone subject to WEP will be better off! It takes just a second to do!

http://signon.org/sign/social-securi...mt&r_by=695993

As Voluntary Contributions are not worked they avoid the double taxation scenario where the same work contributes to the US and UK systems at the same time.

Matt
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Old Jun 22nd 2012, 7:22 pm
  #60  
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Default Re: National Insurance

Does anyone have any information on how work performed in the UK prior to April 1975 is handled by WEP?

April 1, 1975 was the date the UK system changed to a work based NI system.

Before that time pension contributions were credits that I think were residency based, not work based. My analysis from UK Pensions just shows the credits in total before April 1, 1975, and NI worked contributions/Voluntary Class 3 contributions after April 1, 1975.

Any feed back appreciated.

Thanks,

Matt
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