UK state pension and USA social security
Apr 21st 2016, 3:44 am
#1141
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: UK state pension and USA social security
Government workers are opted out of paying some/ all? of payroll taxes, which gives the the illusion that their income is lower than it actually was, and that a higher SS payment should be due. Meanwhile, they receive a generous state/ federal pension (maybe in part funded by the payroll taxes they saved? Little hazy on the details). The WEP is designed to stop public sector middle and high earners appearing to be like private sector low earners, and receiving a high 'poor person' SS income AND a full government pension.
Apr 21st 2016, 6:54 am
#1142
Forum Regular
Joined: Apr 2016
Location: California
Posts: 233
Re: UK state pension and USA social security
Nice! We're going to be caught up in WEP, so I've taken a small interest in it. And built a spreadsheet; any excuse to build a spreadsheet 
It's all swings and roundabouts, global pensions - we'll do well out of making UK voluntary contributions, and VERY well out of a few years spent in Switzerland, thanks to very high salaries/ cost of living there, and therefore getting the benefits of geographical arbitrage of being retired in a lower cost country while receiving our Swiss state pension.
It's all swings and roundabouts, global pensions - we'll do well out of making UK voluntary contributions, and VERY well out of a few years spent in Switzerland, thanks to very high salaries/ cost of living there, and therefore getting the benefits of geographical arbitrage of being retired in a lower cost country while receiving our Swiss state pension.
Apr 21st 2016, 10:10 am
#1143
BE Forum Addict
Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: UK state pension and USA social security
Do you mean reporting to the IRS? I don't think state pensions do this anywhere, do they, including the UK? I thought it was more of a self-declaration thing when you come to apply for SS; not mentioning another pension would be a monumental cover-up and create tax fraud for many years to come.
Apr 21st 2016, 12:32 pm
#1144
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,529
Re: UK state pension and USA social security
Government workers are opted out of paying some/ all? of payroll taxes, which gives the the illusion that their income is lower than it actually was, and that a higher SS payment should be due. Meanwhile, they receive a generous state/ federal pension (maybe in part funded by the payroll taxes they saved? Little hazy on the details). The WEP is designed to stop public sector middle and high earners appearing to be like private sector low earners, and receiving a high 'poor person' SS income AND a full government pension.
At least, I think that's what it's all about. Primarily for government workers, and us foreigners just get caught up in the legislation. It's still fair, though - it stops high earners from moving to the US and paying in for 10 years yet receiving a disproportionately high skewed enefit as if they were earning a quarter of their salary, but paying in for 40. The notion is that they have the advantage of having had 30-odd working years somewhere else, and built up retirement provision accordingly.
At least, I think that's what it's all about. Primarily for government workers, and us foreigners just get caught up in the legislation. It's still fair, though - it stops high earners from moving to the US and paying in for 10 years yet receiving a disproportionately high skewed enefit as if they were earning a quarter of their salary, but paying in for 40. The notion is that they have the advantage of having had 30-odd working years somewhere else, and built up retirement provision accordingly.
So you're subject to WEP for years you worked as a teacher in MA, but not for years you worked as a teacher in NYS (for instance.)
Apr 21st 2016, 12:36 pm
#1145
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,529
Re: UK state pension and USA social security
Do you mean reporting to the IRS? I don't think state pensions do this anywhere, do they, including the UK? I thought it was more of a self-declaration thing when you come to apply for SS; not mentioning another pension would be a monumental cover-up and create tax fraud for many years to come.
Apr 21st 2016, 1:50 pm
#1146
Forum Regular
Joined: Sep 2013
Posts: 120
Re: UK state pension and USA social security
The maximum WEP is 50% of non-SS government pension. So that means that your UK pension is at least $400 a month. Add in your US SS and deduct the WEP amount that comes to at least $900 a month. Are you paying that in Medicare premiums? That seems a lot. Or are you having to buy into Medicare because you don't have 40 quarters of SS contributions?
Yes, WEP sucks, although there are arguments on both sides of this.
Yes, WEP sucks, although there are arguments on both sides of this.
The maximum WEP is 50% of non-SS government pension. So that means that your UK pension is at least $400 a month. Add in your US SS and deduct the WEP amount that comes to at least $900 a month. Are you paying that in Medicare premiums? That seems a lot. Or are you having to buy into Medicare because you don't have 40 quarters of SS contributions?
Yes, WEP sucks, although there are arguments on both sides of this.
Yes, WEP sucks, although there are arguments on both sides of this.
Apr 21st 2016, 2:39 pm
#1147
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,965
Re: UK state pension and USA social security
The onus is on the person receiving the foreign pension to report it to social security. Failure to do so comes with penalties.
Apr 21st 2016, 5:54 pm
#1148
Lost in BE Cyberspace
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,425
Apr 21st 2016, 6:03 pm
#1149
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,439
Re: UK state pension and USA social security
How is that different from any other crime? 
In an era of rapidly increasing data sharing especially regarding tax evasion and off-shore investments, it would be extremely foolish to assume your overseas secrets will remain secret indefinitely!
In an era of rapidly increasing data sharing especially regarding tax evasion and off-shore investments, it would be extremely foolish to assume your overseas secrets will remain secret indefinitely!
Apr 21st 2016, 6:08 pm
#1150
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Apr 21st 2016, 6:26 pm
#1152
Just Joined
Joined: Apr 2016
Posts: 13
Re: UK state pension and USA social security
If my husband and I had never worked hard we would be treated better.
Apr 21st 2016, 6:34 pm
#1153
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: UK state pension and USA social security
Please explain.
Last edited by Giantaxe; Apr 21st 2016 at 6:48 pm.
Apr 21st 2016, 6:41 pm
#1154
Forum Regular
Joined: Mar 2015
Posts: 101
Re: UK state pension and USA social security
If your family income is above certain levels they increase the amount you pay for Medicare. They have increased mine three times. I now pay $538. My beef is that I paid into this system and they have just taken my money under false pretenses
If my husband and I had never worked hard we would be treated better.
If my husband and I had never worked hard we would be treated better.
This is why you save your own money outside of government and not give them a penny more than you have to. I don't have any plans to do UK NIC contributions ever. They are likely to change the rules to take it away from a guy like me.
Apr 21st 2016, 6:41 pm
#1155
Deep in the woods of CT
Joined: Feb 2010
Posts: 7,002
Re: UK state pension and USA social security
If your family income is above certain levels they increase the amount you pay for Medicare. They have increased mine three times. I now pay $538. My beef is that I paid into this system and they have just taken my money under false pretenses
If my husband and I had never worked hard we would be treated better.
If my husband and I had never worked hard we would be treated better.
High income beneficiaries. Retirees with high incomes have been paying bigger Medicare Part B premiums since 2007. Those with retirement incomes between $85,000 and $107,000 ($170,000 to $214,000 for couples) will pay $170.50 in Medicare Part B premiums in 2016. The premium jumps to $243.60 for retirees earning from $107,000 to $160,000 ($214,000 to $320,000 for couples) and $316.70 for those with incomes of $160,000 to $214,000 ($320,000 to $428,000 for couples). People who earn more than $214,000 as an individual or $428,000 as a couple pay $389.80 per month for Medicare Part B. Less than 5 percent of Medicare beneficiaries pay these inflated premiums.
