Giantaxe

The "peculiar" reason is that it saves them money.

robin1234

I'm just looking through my voluminous file going back a few years ... Their letters are mailed from Malta, Netherlands ... everywhere but Newcastle!
Wow thanks for that reference, there it is in black and white! I didn't know this stuff was available online.

Pulaski

I have not a shadow of a doubt that is correct.

Westham

All of my many letters and statements were post marked Malta and all took 2 to 3 weeks to arrive.

hutchiebug

Thanks Lin_NJ. When I do my calculation, do I just use the Basic St Pension part or should I include the deferral portion too?

nun

Your deferral will just mean that you get an increased pension.

I've had a bit of a rethink about this and you could argue that the basic state pension is not earnings related, it's something you get for having worked and paid NI. The additional state pension is an earnings related top up, and if you get that it will only be due to your 10 years of work in the UK as voluntary contributions only qualify you for the basic pension. So I would declare your additional state pension for WEP, but not the basic state pension. This is just my opinion and I would get a professional opinion if you are worried and explain the nature of your UK pension to the SSA and see what they say.

lansbury

But your NI contributions are a percentage of your wages. So appears to be earnings related. Be great if you were correct but the SSA might take a lot of convincing.

nun

Yes but whatever percentage of your pay goes towards NI the basic state pension is the same....therefore it is not earnings related, only the additional state pension (and before that SERPS) is earnings related. The new state pension completely removes any earnings related component so, IMHO, it isn't relevant for WEP. That would not be the case for things like NEST and other private UK pensions.

Lin_NJ

I think that it is worth a shot, as Nun explains, and it does not hurt to try.

lansbury

I like your reasoning and will certainly when the time comes, sometime in the next 18 months, but forward that argument when claiming SS.

It would certainly be a big boast to us as about 60% of my wife's' UK pensions would be eliminated from the WEP calculation, and my SS is going to be 50% of hers.

UK2US1979

<<
I've had a bit of a rethink about this and you could argue that the basic state pension is not earnings related, it's something you get for having worked and paid NI. The additional state pension is an earnings related top up, and if you get that it will only be due to your 10 years of work in the UK as voluntary contributions only qualify you for the basic pension. So I would declare your additional state pension for WEP, but not the basic state pension. This is just my opinion and I would get a professional opinion if you are worried and explain the nature of your UK pension to the SSA and see what they say.>

I just read nun's comments on WEP . Need some clarification for myself. I worked in England from 1967 to 1978 and would be shortly filing a claim for state pension. NHI contributions were always deducted from my pay check. I think it was a normal practice to do so. Would my pension be subject to WEP here? Thanks.

Lin_NJ

Yes, your US social security can be reduced if you are entitled to the UK state pension. It depends on your circumstances. If you read this thread you will understand how it works. There is a calculator that Social Security has that you can use which will make the calculation. You will need to how much you are entitled to from the UK side. I am not certain that you have sufficient years of NI payments, but you could be entitled to a proportion. You can find the calculators on the SS website, there is a simple one and one that a program you can download for a more precise calculation. The SS regulations and guidance regarding WEP are also on the web.

nun

First thing, know that I'm not a professional at this so everything is just my opinion.

I believe you can argue that the basic state pension that everyone gets for having a certain number of NI contributions can be left out of WEP calculations for potentially two reasons; 1) if it is due to voluntary contributions or contributions only due to your residence in the UK, like those for sixth form college students; and 2) because it is not connected with earnings as everyone no matter what their salary gets the same basic state pension. Any SERPS, additional state pension or UK private pension will count towards WEP because they depend on your earnings.

So all you need to do is find out the different components of your pension. The earnings related component of the UK state pension is now being phased out completely so if you get the new state pension, IMHO, none of it will count towards WEP. If the SSA questions that point to the Spanish case linked above.

Pulaski

Assuming that a 401K doesn't reduce a SS "pension", I am mystified as to how my private pension in the UK, paid for with my money, just like my 401K, reduces the liability of the Federal Government to make social security payments to me.

Does anyone know if that questions has been explained, or challenged in court? because if not it is surely only a matter of time before it is challenged.

durham_lad

Most pensions that reduce SS are not from foreign pensions, they are from US or State government pensions that do not pay into SS. Even participants of those pension schemes have their own equivalent of a 401k that they can pay into.

The idea of WEP is to penalize "double dippers" who earn a government pension, retire early and then start a new job paying into SS for a number of years and then start collecting it. This is because SS has bend points which favors the early years and doesn't increase much in the later years.

Someone can join the miltary, serve for 20 years, retire at 40 on a pension, work another 22 years and retire at 62 collecting SS based on 22 years of paying in. When I was closing on early retirement after paying into SS for 23 years I looked at how much I would increase my SS by working for a few years more and was very surprised at how little extra my SS increased. (and I was maxing out SS every year as I earned above the SS max salary)

If SS was a linear calculation like the new UK OAP then I'm sure WEP could be challenged in court.