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UK state pension and USA social security

UK state pension and USA social security

Old Jan 29th 2015, 8:45 pm
  #541  
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Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
I agree, and I think the discussion here on WEP applied to US SS is really about what the US SSA definition is on earnings based pension.
Exactly. And that is why I wish this got tested in a court of law.
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Old Jan 29th 2015, 8:45 pm
  #542  
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Default Re: UK state pension and USA social security

Originally Posted by theOAP View Post
Isn't this also the case for the current basic State Pension?
I think that it is, no argument from me.
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Old Jan 29th 2015, 8:47 pm
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Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
I've been retired for 5 years and will continue making voluntary NI contributions for another 7 years so that I will have 12/35ths of my UK State pensions that will be based on years with no earnings at all for those years, and those 12 years will be worth exactly the same amount as if I had been working and paying contributions through NI taxes. That is what I mean when I say that the new UK State pension is not earnings based, it is just calculated on the number of years of contributions, regardless of whether one has been working or not.
I think it's generally agreed that UK pension attributable to voluntary contributions is not WEPed. So I don't think your argument is pertinent.
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Old Jan 29th 2015, 8:48 pm
  #544  
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Default Re: UK state pension and USA social security

Originally Posted by Giantaxe View Post
Exactly. And that is why I wish this got tested in a court of law.
I really hope it does.
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Old Jan 29th 2015, 8:48 pm
  #545  
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Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
I agree, and I think the discussion here on WEP applied to US SS is really about what the US SSA definition is on earnings based pension.
I think it is this:

Originally Posted by theOAP View Post

<<snip>>


Is it too late to challenge the lady who interviewed me for SS, and asked all the details about a UK State Pension? By your logic (which could be right), my basic State Pension (or at least 95+% of it) is not based on earnings (line 1 in the example). She didn't mention that part, and only wanted to confirm that it came from Class 1 contributions. We did discuss her questions and she confirmed the detail she was taking for both the State Pension and the company pension related to the WEP calculation, IIRC.
- it's whatever "the lady who asks you the question" when you apply for SS pension decides it is.
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Old Jan 29th 2015, 8:52 pm
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Default Re: UK state pension and USA social security

Originally Posted by Giantaxe View Post
We can argue all we like about whether the WEP should be applied to UK pensions. What we do know from postings here is that the SSA does apply it to the current UK pension. And I wouldn't hold my breath that they will cease doing so when the "new" pension is introduced. Really, what this needs is a legal challenge at some point.
I have not come across a single posting where one said that their WEP was applied to their Basic state pension. The problem is ( and one wont mind having such a problem!), people who posted here, have also got other pensions such as company pensions etc. So, one, apparently never found out whether their basic state pension was subject to WEP. One individual wrote that the SSA rep stopped calculating after taking into account the company pension. This is because of the maximum WEP one is subjected to.

So, yes, it would be nice to know if there is any one who just had the basic UK state pension and how it was treated for WEP purposes.
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Old Jan 29th 2015, 8:56 pm
  #547  
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Default Re: UK state pension and USA social security

Originally Posted by UK2US1979 View Post
I have not come across a single posting where one said that their WEP was applied to their Basic state pension. The problem is ( and one wont mind having such a problem!), people who posted here, have also got other pensions such as company pensions etc. So, one, apparently never found out whether their basic state pension was subject to WEP. One individual wrote that the SSA rep stopped calculating after taking into account the company pension. This is because of the maximum WEP one is subjected to.

So, yes, it would be nice to know if there is any one who just had the basic UK state pension and how it was treated for WEP purposes.
There have been several who have indicated that they have been WEPed because of their UK state pension alone.
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Old Jan 29th 2015, 9:11 pm
  #548  
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Default Re: UK state pension and USA social security

Originally Posted by Giantaxe View Post
There have been several who have indicated that they have been WEPed because of their UK state pension alone.
May be I missed those posts. Could you kindly point one or two for me, if you don't mind?
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Old Jan 29th 2015, 9:13 pm
  #549  
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Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
... and you were WEP'ed based on your entire UK State Pension, if I remember correctly - is that right?
The lady asked "do you have, or will you have, any other pensions" I said yes, she said "tell me about them". I started by saying I had a UK State Pension. She requested all the details of the UK State Pension, all the exact details. She then asked if there were any other pensions. I replied I had a UK company pension. She requested all the same exact details. The company pension, on its own, far surpassed the WEP threshold (the first break point). She, in an offhand manner, said "anything else?" I replied I had 3 additional French pensions. She DID NOT want to know the details (they're significantly larger than the UK State Pension), and to paraphrase, by way of a shortened interpretation of her reply, said "they don't matter". I, in my typical flippant way, said "I'm guessing this is for the WEP calculation". She replied "yes" and we discussed the first break point. She ran the figures there and then, tentatively, and said this is what your SS monthly payment will likely be, subject to approval. It matched, within a dollar, to what I had calculated prior to the call.

Glean from that what you will.
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Old Jan 29th 2015, 9:17 pm
  #550  
 
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Default Re: UK state pension and USA social security

Having followed nun's argument for sometime I decided to run my wife's calculation using the WEP online calculator.

She has a private pension and UK State pension. Her UK State pension is based on 12 years contributions of which 3 years were not based on earnings but a voluntary purchase of back years. We could only buy 3 at the time we did it.

Running the WEP calculator as follows :-

1) Just her private pension

2) Private pension plus 3/4 of her State pension

3) Private Pension and full State pension

Either of the three produce the same estimate for the pension she will receive. Which makes our life simple when we claim next year, as I will not feel I have lost out if I couldn't persuade SSA to nun's point of view and she lost more pension through WEP. As I get 50% of hers maximizing her pension is important.

I shall now continue to follow this discussion more out of interest than in hope.

Last edited by lansbury; Jan 29th 2015 at 9:21 pm. Reason: clarification
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Old Jan 29th 2015, 9:31 pm
  #551  
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Default Re: UK state pension and USA social security

Originally Posted by UK2US1979 View Post
May be I missed those posts. Could you kindly point one or two for me, if you don't mind?
Do a search... iirc, there was one low-income guy from Florida (?) who - incorrectly - claimed he was being WEPed 80% or so of his UK state pension. He was including Medicare premiums in that number, but nevertheless he was a good example of how a lower-income person getting UK state pension and US SS can be hit significantly in relation to their total pension income.
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Old Jan 29th 2015, 9:34 pm
  #552  
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Default Re: UK state pension and USA social security

Originally Posted by nun View Post
The online tool I originally linked to seems quite new and might be a response to the recent Spanish case where Spain's residence based pension was judged to not be included in WEP calculations. People that are WEPed on the basic UK state pension have either given inaccurate information to SSA or had the rules incorrectly applied. Remember the SSA does not necessarily know the details of the UK system or your pension history so you have to make sure you do.
I would be very surprised if the SSA doesn't know the details of the UK system, especially given the reciprocal agreement between the UK and US. And as I said before I think an "English" court case equivalent to the Spanish one is what is needed.
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Old Jan 29th 2015, 9:43 pm
  #553  
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Default Re: UK state pension and USA social security

Originally Posted by fozzyb View Post
Even the "new" state pension is earnings based in the sense that for a year to count as a contribution you must have earned over the lower earnings limit (unless you have other credits/voluntary contributions etc).
The original basic state pension and the new flat rate pension are work related. In fact for the new pension you don't even have to earn any income as being a carer for someone also qualifies you for contributions. The critical thing to realize is that a pension that is not dependent on your level of earnings is not WEPable. You might have earnings and pay NI on those, but if the pension is independent of the size of those earnings and contributions then you don't include it in WEP.

The online tool I originally linked to seems quite new and might be a response to the recent Spanish case where Spain's residence based pension was judged to not be included in WEP calculations. People that are WEPed on the basic UK state pension have either given inaccurate information to SSA or had the rules incorrectly applied. Remember the SSA does not necessarily know the details of the UK system or your pension history so you have to make sure you do. Being WEPed on additional state pension and private UK pensions is probably correct.

I won't mention my UK flat rate pension to SSA unless I specifically asked and then I will explain why WEP does not apply. It's a non issue for me anyway as my MA state pension will be enough so that I'll have the max WEP applied to my SS anyway. Interestingly on 10 years of contributions my MA pension will be the largest, on 17 years of contribution and after WEP my SS is next and on 35 years of contributions my UK flat rate pension will be the smallest. This is in part because the first two are earnings related, but also because UK state pension is such a small benefit..... Of course you have to factor in the NHS and if your contributions are mostly Class 2, even if the absolute value of the U k pension is small, it's great value for money.
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Old Jan 29th 2015, 10:07 pm
  #554  
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Default Re: UK state pension and USA social security

Post 551:

Originally Posted by nun View Post
The original basic state pension and the new flat rate pension are work related. In fact for the new pension you don't even have to earn any income as being a carer for someone also qualifies you for contributions. The critical thing to realize is that a pension that is not dependent on your level of earnings is not WEPable. You might have earnings and pay NI on those, but if the pension is independent of the size of those earnings and contributions then you don't include it in WEP.

The online tool I originally linked to seems quite new and might be a response to the recent Spanish case where Spain's residence based pension was judged to not be included in WEP calculations. People that are WEPed on the basic UK state pension have either given inaccurate information to SSA or had the rules incorrectly applied. Remember the SSA does not necessarily know the details of the UK system or your pension history so you have to make sure you do. Being WEPed on additional state pension and private UK pensions is probably correct.

I won't mention my UK flat rate pension to SSA unless I specifically asked and then I will explain why WEP does not apply. It's a non issue for me anyway as my MA state pension will be enough so that I'll have the max WEP applied to my SS anyway.
Post 554:


Originally Posted by nun View Post
The original basic state pension and the new flat rate pension are work related. In fact for the new pension you don't even have to earn any income as being a carer for someone also qualifies you for contributions. The critical thing to realize is that a pension that is not dependent on your level of earnings is not WEPable. You might have earnings and pay NI on those, but if the pension is independent of the size of those earnings and contributions then you don't include it in WEP.

The online tool I originally linked to seems quite new and might be a response to the recent Spanish case where Spain's residence based pension was judged to not be included in WEP calculations. People that are WEPed on the basic UK state pension have either given inaccurate information to SSA or had the rules incorrectly applied. Remember the SSA does not necessarily know the details of the UK system or your pension history so you have to make sure you do. Being WEPed on additional state pension and private UK pensions is probably correct.

I won't mention my UK flat rate pension to SSA unless I specifically asked and then I will explain why WEP does not apply. It's a non issue for me anyway as my MA state pension will be enough so that I'll have the max WEP applied to my SS anyway. Interestingly on 10 years of contributions my MA pension will be the largest, on 17 years of contribution and after WEP my SS is next and on 35 years of contributions my UK flat rate pension will be the smallest. This is in part because the first two are earnings related, but also because UK state pension is such a small benefit..... Of course you have to factor in the NHS and if your contributions are mostly Class 2, even if the absolute value of the U k pension is small, it's great value for money.
I think it's time you thought about retiring, 'cos you are repeating yourself.

Last edited by dunroving; Jan 29th 2015 at 10:13 pm.
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Old Jan 29th 2015, 10:09 pm
  #555  
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Default Re: UK state pension and USA social security

Originally Posted by nun View Post
In fact for the new pension you don't even have to earn any income as being a carer for someone also qualifies you for contributions.
One last comment, and I will leave you in peace.

The inclusion of the above makes the new State Pension even more like the current S2P, which you're considering to be earnings related.

Under the current S2P, the following people are included:
Employees earning at least £111 a week (in 2014/15).
People caring for one or more child under age 12 for whom they are claiming child benefit.
People claiming carer's allowance.
People claiming certain disability-related benefits.
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