Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Mar 19th 2011, 12:45 am
#166
BE Enthusiast
Joined: Aug 2009
Location: Chicago, IL
Posts: 351
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Thank you so much for that Chris. I will do my timeline first then give them a call. He did remarry (his childhood sweetheart who used to make obscene phone calls to me when he returned from England with me 
) and they have been together for many years. On the other hand he was on a USAFSS base in UK which is considered US territory.
I am not expecting much from the UK in contributions based income but hoping, if necessary, that there is some sort of income benefit. Perhaps not.
) and they have been together for many years. On the other hand he was on a USAFSS base in UK which is considered US territory. I am not expecting much from the UK in contributions based income but hoping, if necessary, that there is some sort of income benefit. Perhaps not.
If the new wife has been married to your ex longer than you were married to him, then you will not be able to collect on his US SS.
Still...am wishing you the very best...
Mar 19th 2011, 3:14 am
#167
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Chris, you are a precious hive of information. Thanks.
Mar 19th 2011, 5:41 am
#168
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Bandrui..
If I were to move back to the UK tomorrow..and for some odd reason was able to collect some form of UK SS...my US SS would take a hit...US and UK have SS agreements...neither country allows for 'windfall'..as I call it.."double-bubble". One or the other is going to take a hit (decrease, not an increase) or at the very least an equalizing.
If I were to move back to the UK tomorrow..and for some odd reason was able to collect some form of UK SS...my US SS would take a hit...US and UK have SS agreements...neither country allows for 'windfall'..as I call it.."double-bubble". One or the other is going to take a hit (decrease, not an increase) or at the very least an equalizing.
Given that Class 2 NI is 2.10 pounds a week it's a great deal and every expat should be making these voluntary contributions. I have 5 years left until I reach 30 years of Class 2 NI and I'll have paid about 3250 pounds in total. In today's money assuming the new pension law takes effect that will get me a 7280 pounds a year UK basic pension. Also in today's money and converting into pounds the WEP would reduce my US SS by 2625 pounds a year. So by spending 3250 pounds over 30 years I end up 4655 pounds better off each year.
Mar 19th 2011, 7:52 am
#169
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
The "hit" only occurs on US SS and then only if you receive benefits paid for with wages that you didn't pay SS on and you have less than 30 years of US SS payments. So if you work in the USA for 30 years paying SS and continue your voluntary Class 2 NI payments it's possible to get full US SS and full UK state pension. If you get UK state pension and have less than 30 years of US SS contributions your US SS will be reduced. This is the Wind Fall Elimination provision. However, the UK doesn't care about any US SS you get and the UK basic state pension is based only on your number of years of contributions.
Given that Class 2 NI is 2.10 pounds a week it's a great deal and every expat should be making these voluntary contributions. I have 5 years left until I reach 30 years of Class 2 NI and I'll have paid about 3250 pounds in total. In today's money assuming the new pension law takes effect that will get me a 7280 pounds a year UK basic pension. Also in today's money and converting into pounds the WEP would reduce my US SS by 2625 pounds a year. So by spending 3250 pounds over 30 years I end up 4655 pounds better off each year.
Given that Class 2 NI is 2.10 pounds a week it's a great deal and every expat should be making these voluntary contributions. I have 5 years left until I reach 30 years of Class 2 NI and I'll have paid about 3250 pounds in total. In today's money assuming the new pension law takes effect that will get me a 7280 pounds a year UK basic pension. Also in today's money and converting into pounds the WEP would reduce my US SS by 2625 pounds a year. So by spending 3250 pounds over 30 years I end up 4655 pounds better off each year.
Mar 19th 2011, 2:02 pm
#170
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
You can pay for the most recent six years retroactively.
Mar 21st 2011, 12:03 am
#171
Forum Regular
Joined: Nov 2009
Location: Originally from the U.K. and now back in Houston
Posts: 51
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
The "hit" only occurs on US SS and then only if you receive benefits paid for with wages that you didn't pay SS on and you have less than 30 years of US SS payments. So if you work in the USA for 30 years paying SS and continue your voluntary Class 2 NI payments it's possible to get full US SS and full UK state pension. If you get UK state pension and have less than 30 years of US SS contributions your US SS will be reduced. This is the Wind Fall Elimination provision. However, the UK doesn't care about any US SS you get and the UK basic state pension is based only on your number of years of contributions.
Given that Class 2 NI is 2.10 pounds a week it's a great deal and every expat should be making these voluntary contributions. I have 5 years left until I reach 30 years of Class 2 NI and I'll have paid about 3250 pounds in total. In today's money assuming the new pension law takes effect that will get me a 7280 pounds a year UK basic pension. Also in today's money and converting into pounds the WEP would reduce my US SS by 2625 pounds a year. So by spending 3250 pounds over 30 years I end up 4655 pounds better off each year.
Given that Class 2 NI is 2.10 pounds a week it's a great deal and every expat should be making these voluntary contributions. I have 5 years left until I reach 30 years of Class 2 NI and I'll have paid about 3250 pounds in total. In today's money assuming the new pension law takes effect that will get me a 7280 pounds a year UK basic pension. Also in today's money and converting into pounds the WEP would reduce my US SS by 2625 pounds a year. So by spending 3250 pounds over 30 years I end up 4655 pounds better off each year.
Having looked at the definitions of the different classes of NI contributions:
http://www.fool.co.uk/Your-Money/gui...Insurance.aspx
it appears that one needs to make Class 3 payments to top up one's NIC payments? Class 2 (along with Class 4) are for self-employed folk.
Class 3 payments are UKP12.05/week this year.
Am I confused?
If so, it wouldn't be for the first time on this subject!
Tahiti
Mar 21st 2011, 3:19 am
#172
BE Forum Addict
Joined: Nov 2010
Posts: 4,100
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
general rule is 6 years, but there are some special circumstances where you can get an additional 6. This leaflet gives
and example of on such situation.
http://www.direct.gov.uk/prod_consum.../dg_180385.pdf
and example of on such situation.
http://www.direct.gov.uk/prod_consum.../dg_180385.pdf
Mar 21st 2011, 6:27 am
#173
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
There are certain conditions now where you can pay an extra 6 years (12 in all). best to go to Ni site and follow the links because I can't quite remember the conditions. I think you have to have a certain number of years of contributions.
Mar 21st 2011, 7:39 am
#174
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
This is a bit long so apologies for that, and for if this duplicates information already on this thread (I must read the whole thread at some point) but I thought this info fromthe US Soc Sec site might be of interest to people like me who have split their working career between US and another country or countries:
Totalization Benefits
The Problem of Gaps in Benefit Protection
In addition to providing better Social Security coverage for active workers, international Social Security agreements help assure continuity of benefit protection for persons who have acquired Social Security credits under the system of the United States and the system of another country.
Workers who have divided their careers between the United States and a foreign country sometimes fail to qualify for retirement, survivors or disability insurance benefits (pensions) from one or both countries because they have not worked long enough or recently enough to meet minimum eligibility requirements. Under an agreement, such workers may qualify for partial U.S. or foreign benefits based on combined, or "totalized," coverage credits from both countries.
To qualify for benefits under the U.S. Social Security program, a worker must have earned enough work credits, called quarters of coverage, to meet specified "insured status requirements." For example, a worker who attains age 62 in 1991 or later generally needs 40 calendar quarters of coverage to be insured for retirement benefits. Under a Totalization agreement, if a worker has some U.S. coverage but not enough to qualify for benefits, SSA will count periods of coverage that the worker has earned under the Social Security program of an agreement country. In the same way, a country party to an agreement with the United States will take into account a worker's coverage under the U.S. program if it is needed to qualify for that country's Social Security benefits. If the combined credits in the two countries enable the worker to meet the eligibility requirements, a partial benefit can then be paid, which is based on the proportion of the worker's total career completed in the paying country.
The agreements allow SSA to totalize U.S. and foreign coverage credits only if the worker has at least six quarters of U.S. coverage. Similarly, a person may need a minimum amount of coverage under the foreign system in order to have U.S. coverage counted toward meeting the foreign benefit eligibility requirements.
Filing Totalization Benefit Claims People generally do not need to take action concerning Totalization benefits under an agreement until they are ready to file a claim for retirement, survivors or disability benefits. A person who wishes to file a claim for benefits under a Totalization agreement may do so at any Social Security office in the United States or the foreign country.
Conclusion International Social Security agreements are advantageous both for persons who are working now and for those whose working careers are over. For current workers, the agreements eliminate the dual contributions they might otherwise be paying to the Social Security systems of both the United States and another country. For persons who have worked both in the United States and abroad, and who are now retired, disabled, or deceased, the agreements often result in the payment of benefits to which the worker or the worker's family members would not otherwise have become entitled.
The agreements also favorably affect the profitability and competitive position of companies with foreign operations by reducing their cost of doing business abroad. Companies with personnel stationed abroad are encouraged to take advantage of these agreements to reduce their tax burden.
Anyone who would like more information about the United States' Social Security Totalization agreements program--including details about specific agreements that are in force--should write to:
SOCIAL SECURITY ADMINISTRATION
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
USA
Totalization Benefits
The Problem of Gaps in Benefit Protection
In addition to providing better Social Security coverage for active workers, international Social Security agreements help assure continuity of benefit protection for persons who have acquired Social Security credits under the system of the United States and the system of another country.
Workers who have divided their careers between the United States and a foreign country sometimes fail to qualify for retirement, survivors or disability insurance benefits (pensions) from one or both countries because they have not worked long enough or recently enough to meet minimum eligibility requirements. Under an agreement, such workers may qualify for partial U.S. or foreign benefits based on combined, or "totalized," coverage credits from both countries.
To qualify for benefits under the U.S. Social Security program, a worker must have earned enough work credits, called quarters of coverage, to meet specified "insured status requirements." For example, a worker who attains age 62 in 1991 or later generally needs 40 calendar quarters of coverage to be insured for retirement benefits. Under a Totalization agreement, if a worker has some U.S. coverage but not enough to qualify for benefits, SSA will count periods of coverage that the worker has earned under the Social Security program of an agreement country. In the same way, a country party to an agreement with the United States will take into account a worker's coverage under the U.S. program if it is needed to qualify for that country's Social Security benefits. If the combined credits in the two countries enable the worker to meet the eligibility requirements, a partial benefit can then be paid, which is based on the proportion of the worker's total career completed in the paying country.
The agreements allow SSA to totalize U.S. and foreign coverage credits only if the worker has at least six quarters of U.S. coverage. Similarly, a person may need a minimum amount of coverage under the foreign system in order to have U.S. coverage counted toward meeting the foreign benefit eligibility requirements.
Filing Totalization Benefit Claims People generally do not need to take action concerning Totalization benefits under an agreement until they are ready to file a claim for retirement, survivors or disability benefits. A person who wishes to file a claim for benefits under a Totalization agreement may do so at any Social Security office in the United States or the foreign country.
Conclusion International Social Security agreements are advantageous both for persons who are working now and for those whose working careers are over. For current workers, the agreements eliminate the dual contributions they might otherwise be paying to the Social Security systems of both the United States and another country. For persons who have worked both in the United States and abroad, and who are now retired, disabled, or deceased, the agreements often result in the payment of benefits to which the worker or the worker's family members would not otherwise have become entitled.
The agreements also favorably affect the profitability and competitive position of companies with foreign operations by reducing their cost of doing business abroad. Companies with personnel stationed abroad are encouraged to take advantage of these agreements to reduce their tax burden.
Anyone who would like more information about the United States' Social Security Totalization agreements program--including details about specific agreements that are in force--should write to:
SOCIAL SECURITY ADMINISTRATION
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
USA
Mar 21st 2011, 11:50 am
#175
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Hi
Having looked at the definitions of the different classes of NI contributions:
http://www.fool.co.uk/Your-Money/gui...Insurance.aspx
it appears that one needs to make Class 3 payments to top up one's NIC payments? Class 2 (along with Class 4) are for self-employed folk.
Class 3 payments are UKP12.05/week this year.
Am I confused?
If so, it wouldn't be for the first time on this subject!
Tahiti
Having looked at the definitions of the different classes of NI contributions:
http://www.fool.co.uk/Your-Money/gui...Insurance.aspx
it appears that one needs to make Class 3 payments to top up one's NIC payments? Class 2 (along with Class 4) are for self-employed folk.
Class 3 payments are UKP12.05/week this year.
Am I confused?
If so, it wouldn't be for the first time on this subject!
Tahiti
May 12th 2011, 10:34 pm
#176
BE Forum Addict
Joined: Oct 2010
Location: The sunshine state
Posts: 1,358
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
I'm planning to return to the UK when I reach UK pension age 65/66. Would it be prudent to claim US pension at 62, reduce my annual earnings to the minimum allowed without penalty and increase my wifes earnings to compensate? She's five years younger than me.
All a bit of a minefield isn't it.
All a bit of a minefield isn't it.
May 13th 2011, 12:58 am
#177
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
I'm planning to return to the UK when I reach UK pension age 65/66. Would it be prudent to claim US pension at 62, reduce my annual earnings to the minimum allowed without penalty and increase my wifes earnings to compensate? She's five years younger than me.
All a bit of a minefield isn't it.
All a bit of a minefield isn't it.
May 14th 2011, 12:59 pm
#178
BE Forum Addict
Joined: Oct 2010
Location: The sunshine state
Posts: 1,358
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
.......... or am I barking up the wrong tree.
May 16th 2011, 9:33 pm
#179
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Tina, I spoke to the Uk International pensions group in Newcastle yesterday. The correct phone number is 011 44 191 218 7777. I had called the other number ending in 2010 which is in Swansea and they transferred me as I had the wrong number. They are open from 8am to 8pm local time to allow for calls from overseas.
(It was very heart warming to hear a lilting Welsh accent followed by a lovely Geordie accent.)
I had worked about 3 years in the UK and was told that I would likely get nothing from UK pensions. They said that the minimum requirement is 10 years and even if I purchased 6 years (the max) of NI contributions, I would not have enough and since I would be getting a pension from another country would not qualify under the totalisation agreement. However they did say they would fill out my request and forward it to another department who would investigate and send me a letter.
Now I am already pension age so it may be different for you if you have time to accumulate more years.
Good luck!
(It was very heart warming to hear a lilting Welsh accent followed by a lovely Geordie accent.)
I had worked about 3 years in the UK and was told that I would likely get nothing from UK pensions. They said that the minimum requirement is 10 years and even if I purchased 6 years (the max) of NI contributions, I would not have enough and since I would be getting a pension from another country would not qualify under the totalisation agreement. However they did say they would fill out my request and forward it to another department who would investigate and send me a letter.
Now I am already pension age so it may be different for you if you have time to accumulate more years.
Good luck!
Jun 10th 2011, 3:09 am
#180
BE Forum Addict
Joined: Feb 2011
Location: Salt Spring Island, BC, Canada
Posts: 2,060
Re: Retirement - US Soc Sec, UK Nat Ins, and the Totalization Agreement
Well I received the letter from pensions last week and it was "What happens if you defer receiving your pension" but that wasn't the question I asked. I wanted to know if I could buy enough back years to qualify for a UK pension.
I phoned again and explained the issue and am assured that they will send me a letter detailing this.
On the plus side, apparently I am eligible right now for a lump sum payment of £46 and a weekly benefit of .44p. Whoopee!
Shall see what this next letter has to say.
Note to Pension Info seekeers: Rules for UK pension may vary according to the year of birth so be sure to investigate your own personal situtation. It is only a phone call away (see previous threads).
I phoned again and explained the issue and am assured that they will send me a letter detailing this.
On the plus side, apparently I am eligible right now for a lump sum payment of £46 and a weekly benefit of .44p. Whoopee!
Shall see what this next letter has to say.
Note to Pension Info seekeers: Rules for UK pension may vary according to the year of birth so be sure to investigate your own personal situtation. It is only a phone call away (see previous threads).