nun

You get WEPed because you have a pension derived from wages that were not subject to FICA taxes.

When SSA calculates your SS it assumes that you have worked your entire life paying FICA and calculates an average annual wage. If you are low waged a larger multiplier is used to calculate SS than if you were high waged. But if you actually also have non-SS wages that produce a pension the WEP corrects the higher than appropriate SS you would have received.......anyway that's the logic whether or not you agree with it.

durham_lad

That is just the way it is I'm afraid. The SS is heavily weighted towards the early years of earning, so they penalize folks who might work 10 - 20 years paying into SS then get a job that doesn't pay into SS such as a government worker and then retires from that job with a 2nd pension.

A foreign pension earned while not paying into SS falls into that category. You may be like myself, who worked for 15 years in the UK and earned both a private pension and OAP without paying into SS, then I moved to the US and worked 23 years, paying into SS.

Westham

Don't feel like the Lone Ranger, very few of us understand the reason (or agree) why we have to loose part of our US SS due to working in the UK and qualifying for a UK pension prior to coming to the USA. I should also add that (in my experience) the SS employee's on the other end of the phone help line don't understand it as well as you would think. It is only from the help on this forum that it is gradually coming clearer to me.
I'm still not 100% certain whether the wep kicks in when I start claiming my UK pension or whether it is triggered when I claim my US SS. As I mentioned in an earlier post we will hang in there until next year when I will have my 30 years SS vested but doing this prevents my wife from claiming 60% of my UK pension until that time.

magpye

After reading different responses from people and then re-reading them I'm trying to make sense of all this mish mash and its SLOWLY taking time to sort out and sink in I have come to conclusion that when I am 66 I can claim 50% of my spouses SS but I will be WEPd on that 50% based on my UK Pension. From my calculations I will be better off not claiming at 62 and waiting for 66. I will still have to talk to SS to confirm,

The question now is when I claim my UK Pension at 62 what if anything will that trigger? I don't see how it will trigger anything as I will not be claiming any SS benefits. But I have this sneaky feeling its not going to be that easy. I am going to the UK for 3 months in a few weeks and going to try and sort it out. But does anyone know if I apply for the UK Pension what that will trigger?

Westham

This the same question that I have been trying to get answered from SS. I have today written an email to SS with the hope I will receive an answer that is official an makes sense, I will post the response when I receive it.

magpye

Yes I think its a good idea to get it in writing and I will eagerly await their response when you post it. .

robin1234

My wife claimed her British state pension at age 61 (she could have got it at age 60, just that she delayed sending in the application for a few months.). We are both planning to delay claiming our US SS for at least a few years, so probably she will claim it somewhere between age 65 and 70. She only has about 25 years substantial SS earnings, I think, because she worked five years as a teacher in Massachusetts (MA government employees don't participate in SS) and she worked ten or twelve years in Britain. So WEP will apply.

Her British record includes six years voluntary Class 2 NICs. She obviously should have done more, just that we didn't really figure out the voluntary system till she was about retirement age ....

Not sure of the exact logic as to whether, over a lifetime, you gain or lose by taking one or other, or both, early or late, though. And of course, most people don't know how long they will live so that is the ultimate unknown in this calculation.

Westham

Hi Robin,
When your wife claimed her UK state pension were there any requirements on the form for her to notify any other country where she was making national pension contributions? If not then it appears it is ok to claim the UK pension prior to claiming the US SS without incurring any wep or such like situations until claiming US SS.

A Question for others:
I also have 6 years of voluntary class 2 NIC's (made up the last 6 years by sending a check for approx. 850 GBP's) plus 14 years working years in the UK which equals 20 years vested. Reading other posts is the six year NIC voluntary paid up situation included in the declaration to the US for wep purposes or just the 14 years?

robin1234

No there isn't. But there is a whole section of the British pension application form where you tell the UK authorities your US Social Security number etc. so I believe the two countries share information about pension beneficiaries, which is fair enough.

I don't see how you can incur WEP when you are not claiming yet.

nun

Well it will trigger a US tax bill, if you think your UK income might be greater than your personal allowances remember to file a UKIndividual-2002 so that your UK pension gets tax relief at source.

lansbury

I have claimed my UK State pension, but have not claimed SS yet. Claiming my UK pension did not trigger anything. WEP comes into play when you claim SS, providing you has less than 30 years contributions into it.

hutchiebug

Yup, that's me you're talking about. 28 years this year, hope I can chalk up one more before my job goes away!

Mallory

I think that's the correct way to go about it. Take your UK pension, when you are eligible. Then wait until you are 66 to take 50% of spouse's SS.

hutchiebug

SS has told me that that part of my UK pension subject to their scrutiny is the employment part, 'with earnings not covered by SS.' How absurd! At that time we weren't US citizens working for a US company overseas. We were all born UK citizens and earned our UK pensions in our country of residence before emigrating.

dunroving

Exactly - like it or not, the US isn't reducing your UK pension. They are reducing your US SS pension. Sucks. Don't expect it to make any sense or you'll drive yourself nuts.