Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

UK state pension and USA social security

UK state pension and USA social security

Old Feb 6th 2013, 6:38 pm
  #46  
BE Forum Addict
 
rebs's Avatar
 
Joined: Nov 2007
Location: Beautiful Dorset, UK
Posts: 2,163
rebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
So if you are unemployed and elect to receive government benefits, your NICs are paid/credited for you by the government ... but if you are unemployed and elect not to receive benefits (i.e., to save the government/taxpayers money), you have to pay to get NIC credits?

Is it just me or does this seem crazy?
It has always been my understanding that if one is out of work and genuinely looking for work, it has always been best to sign on to make sure you get your credits. Even in circumstances where savings or whatever might mean you don't qualify for any benefits.

If you are not actively looking for work, or sick or disabled or caring for someone that is disabled, or young children then you don't get any kind of NI credits - why would you if you are simply choosing not to work?
rebs is offline  
Old Feb 6th 2013, 6:51 pm
  #47  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by theOAP View Post
I'm sure you won't be surprised to hear that, no, it's not that simple.

First, to have a year of substantial earnings for US SS, you must have earned a minimum set amount for each year in which you contributed to SS. See the following chart which lists the required minimum amount of total income subject to SS contributions for each year. If you didn't have the required amount, that year will not count towards your substantial earnings.

http://www.socialsecurity.gov/pubs/10045.html#a0=3

Second, if you have 10 years (40 quarters) which do qualify as substantial earnings years, you qualify for US SS. You will receive US SS. You can not apply those years towards your UK State pension. Why should the UK pay you for a pension that you are already entitled to in the US?

If you do not have the required number of years to qualify in either the US or UK, then the Totalisation Treaty can come into play. It sounds as if you qualify for both US SS and the UK State Pension independently, on their own. If so, you can not use the Totalisation Treaty.

If you have 10 years of substantial US earnings, option b) does not exist. If you don't have 10 years, then you would use your UK State Pension to qualify for US SS. But note, in no case does the amount of benefit increase due to the use of the Treaty. It only qualifies you for a benefit. The benefit amount is still only paid according to the number of years you contributed to the aided pension. You would only be paid an amount equal to 8 years of US SS benefits if you use the Treaty and UK contributions to qualify for the US SS benefit if you only had 8 years of SS substantial earnings.

Clear as mud?
Re: The bold section, I now realise I don't even fall under the eligibility rules to "transfer" my US SS to my UK pension eligibilty. However, my assumption was (and still is) that the principle was to use SS towards a UK pension instead of (not as well as) using it towards a US pension.

Must admit I am getting a bit sick and tired of realising I am disadvantaged by life decisions that revolve around trying to do the right thing. For example, no NI credits for 10 years I spent getting a very expensive post-secondary education, while people who were doing nothing during that time (like certain people I knew who just signed on and sat on their arses) had their NICs credited for them by the government, thank you very much.
dunroving is offline  
Old Feb 6th 2013, 6:57 pm
  #48  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by rebs View Post
It has always been my understanding that if one is out of work and genuinely looking for work, it has always been best to sign on to make sure you get your credits. Even in circumstances where savings or whatever might mean you don't qualify for any benefits.

If you are not actively looking for work, or sick or disabled or caring for someone that is disabled, or young children then you don't get any kind of NI credits - why would you if you are simply choosing not to work?
Yes, that's what I thought - so even if you are not eligible to (or decline to) receive benefits, "signing on" (registering as unemployed and showing you are actively seeking work) should make you eligible for NIC's. However, the pages I was referred to say the category is unemployed and receiving benefits

My understanding is that if you are sick, disabled, caring for someone who is disabled, etc., you do get NIC credits.

I'd never expect to get NICs for just sitting on my arse - but it seems counterintuitive to penalise an unemployed person who is actively seeking work but volunteering to not drain the public coffers by claiming benefits is at least equally deserving of NIC credits as someone who has spent years drawing benefits and in truth doesn't want to work.
dunroving is offline  
Old Feb 6th 2013, 6:59 pm
  #49  
In the pink
 
Mallory's Avatar
 
Joined: Oct 2006
Location: USA
Posts: 3,116
Mallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post

Must admit I am getting a bit sick and tired of realising I am disadvantaged by life decisions that revolve around trying to do the right thing. For example, no NI credits for 10 years I spent getting a very expensive post-secondary education, while people who were doing nothing during that time (like certain people I knew who just signed on and sat on their arses) had their NICs credited for them by the government, thank you very much.
I think that comes from how it used to be back in the "old days" when a university education was free, and students were given grants. While non-university young people were working and paying taxes, uni students were using up those taxes by being at free uni and receiving those grants. It would seem silly to give them NIC credits on top of free money.

It was also assumed that once they graduated from uni, they would earn a lot more money than folks that didn't enjoy a uni education.

It was a choice people made.
Mallory is offline  
Old Feb 6th 2013, 7:04 pm
  #50  
Lost in BE Cyberspace
 
Joined: Jan 2008
Posts: 41,518
Sally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Re: The bold section, I now realise I don't even fall under the eligibility rules to "transfer" my US SS to my UK pension eligibilty. However, my assumption was (and still is) that the principle was to use SS towards a UK pension instead of (not as well as) using it towards a US pension.

Must admit I am getting a bit sick and tired of realising I am disadvantaged by life decisions that revolve around trying to do the right thing. For example, no NI credits for 10 years I spent getting a very expensive post-secondary education, while people who were doing nothing during that time (like certain people I knew who just signed on and sat on their arses) had their NICs credited for them by the government, thank you very much.
It is certainly annoying and I hadn't realized how moving countries would mess up my husband's pension. Are you in the USS scheme? That is also changing from final salary for those not currently active in it.
Sally Redux is offline  
Old Feb 6th 2013, 7:07 pm
  #51  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Mallory View Post
I think that comes from how it used to be back in the "old days" when a university education was free, and students were given grants. While non-university young people were working and paying taxes, uni students were using up those taxes by being at free uni and receiving those grants. It would seem silly to give them NIC credits on top of free money.

It was also assumed that once they graduated from uni, they would earn a lot more money than folks that didn't enjoy a uni education.

It was a choice people made.
Yes, I get a bit sick of this cliche too (I realise you are just citing a common assumption). Other than doctors, engineers, lawyers and certain other professions, I'd question whether a university education makes that much difference, even over a lifetime. I am in a much worse financial situation than former university friends, due to losing all those potential earning years (10 in all), plus the cost of that education (yes, being means-tested meant I got a government grant for my undergrad degree, but my masters and PhD cost a small fortune).

Yes, it was a choice, but it isn't a choice you should be severely penalised for in my humble opinion.
dunroving is offline  
Old Feb 6th 2013, 7:14 pm
  #52  
BE Forum Addict
 
rebs's Avatar
 
Joined: Nov 2007
Location: Beautiful Dorset, UK
Posts: 2,163
rebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Yes, that's what I thought - so even if you are not eligible to (or decline to) receive benefits, "signing on" (registering as unemployed and showing you are actively seeking work) should make you eligible for NIC's. However, the pages I was referred to say the category is unemployed and receiving benefits
Well, I guess that would certainly cover you for while you were getting job seeker's allowance. I think that has 2 elements - 6 months worth for contributory where one's savings would not come into the equation. Once that has run out, then it it is effectively means tested and savings and partner's income is taken into account.

I don't know what the situation would be if you were still unemployed at that point, but were not eligible to receive any income - back in the day, I think people used to still sign on (purely for the NI credits), but I don't know if that is still the case today.

I know who would know -those experts over on the moneysavingsexpert forum
rebs is offline  
Old Feb 6th 2013, 7:14 pm
  #53  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Sally Redux View Post
It is certainly annoying and I hadn't realized how moving countries would mess up my husband's pension. Are you in the USS scheme? That is also changing from final salary for those not currently active in it.
Yes, I am in USS. New entrants are put in a "career average salary" scheme, where pension is based on average salary over their career (as the name suggests). Schoolteachers' pensions are going the same way.

I am fortunate to be in the "final salary" section, where your pension is based on one of two ways of estimating salary later in the career. The unfair aspect of this is if someone is given a "charitable" pay rise or promotion late in career, their pension jumps considerably. There is no way that would happen these days (even those who deserve promotion aren't getting it), but in the good old days, promotion was almost automatic the longer you were in position.

Final salary pension members pay a little more contributions, but not that much.

The union (UCU) recently surveyed members with a view to voting for action to improve things for new members. I can't see the old guard voting in favour of that though.
dunroving is offline  
Old Feb 6th 2013, 7:16 pm
  #54  
In the pink
 
Mallory's Avatar
 
Joined: Oct 2006
Location: USA
Posts: 3,116
Mallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Yes, I get a bit sick of this cliche too (I realise you are just citing a common assumption). Other than doctors, engineers, lawyers and certain other professions, I'd question whether a university education makes that much difference, even over a lifetime. I am in a much worse financial situation than former university friends, due to losing all those potential earning years (10 in all), plus the cost of that education (yes, being means-tested meant I got a government grant for my undergrad degree, but my masters and PhD cost a small fortune).

Yes, it was a choice, but it isn't a choice you should be severely penalised for in my humble opinion.
Generally speaking, it's a well established fact that a uni education will provide you with a much higher income, that's been proven.

Last edited by Mallory; Feb 6th 2013 at 7:26 pm.
Mallory is offline  
Old Feb 6th 2013, 7:17 pm
  #55  
BE Forum Addict
 
rebs's Avatar
 
Joined: Nov 2007
Location: Beautiful Dorset, UK
Posts: 2,163
rebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Yes, I get a bit sick of this cliche too (I realise you are just citing a common assumption). Other than doctors, engineers, lawyers and certain other professions, I'd question whether a university education makes that much difference, even over a lifetime. I am in a much worse financial situation than former university friends, due to losing all those potential earning years (10 in all), plus the cost of that education (yes, being means-tested meant I got a government grant for my undergrad degree, but my masters and PhD cost a small fortune).

Yes, it was a choice, but it isn't a choice you should be severely penalised for in my humble opinion.
I do generally agree with your point - but are you not talking about post graduate study if you are comparing to university friends

I think I was lucky during my university days - I studied as a mature student so did not start until I was 30. During the holidays I was able to work for enough weeks to effectively make a full year's NI contribution so I did not miss out on those years.

At the time it was not really something I gave much thought to, but I am glad it worked out that way now..
rebs is offline  
Old Feb 6th 2013, 7:18 pm
  #56  
Lost in BE Cyberspace
 
Joined: Jan 2008
Posts: 41,518
Sally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond reputeSally Redux has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Yes, I am in USS. New entrants are put in a "career average salary" scheme, where pension is based on average salary over their career (as the name suggests). Schoolteachers' pensions are going the same way.

I am fortunate to be in the "final salary" section, where your pension is based on one of two ways of estimating salary later in the career. The unfair aspect of this is if someone is given a "charitable" pay rise or promotion late in career, their pension jumps considerably. There is no way that would happen these days (even those who deserve promotion aren't getting it), but in the good old days, promotion was almost automatic the longer you were in position.

Final salary pension members pay a little more contributions, but not that much.

The union (UCU) recently surveyed members with a view to voting for action to improve things for new members. I can't see the old guard voting in favour of that though.
Yes, some ding-dongs were given a big rise in their final year which was wrong, but as you say unlikely to happen now.

From what I understand, the fund is in very good shape and does not need to do this for financial reasons.
Sally Redux is offline  
Old Feb 6th 2013, 7:50 pm
  #57  
BE Forum Addict
 
Joined: Apr 2011
Location: The Shire
Posts: 1,080
theOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond reputetheOAP has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
However, my assumption was (and still is) that the principle was to use SS towards a UK pension instead of (not as well as) using it towards a US pension.
RE bold above: I'm afraid I'm going to add insult to injury. With your 25 years of UK NICs, you can not do this, no way, no how.
theOAP is offline  
Old Feb 6th 2013, 8:03 pm
  #58  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Mallory View Post
Generally speaking, it's a well established fact that a uni education will provide you with a much higher income
Hmm, I am not so sure. I think of it more as a "generally accepted truth", that is based on "stuff we are told".

Consider the following:

A fact is something that is immutable or undeniable. I don't think that applies at all.

There is a body of evidence that appears to support the assumption that a university education means higher lifetime earnings. However, like most quantitative evidence, it is based on average patterns. So, as I said previously, some degrees (law, medicine, finance) are associated with (considerably) higher salaries. However, these are balanced out by people with degrees in music, media studies, psychology, etc. Even vocational degrees like nursing and social work don't lead to particularly high salaries.

This body of evidence is generated by people with a vested interest in promoting a university education, namely researchers who work in universities.

Simple comparsons of people with and without a university education ignore the elephant in the room, namely the fact that university students are generally smarter, from better homes, with richer parents, etc. So is their higher lifetime salary (on average) due to a university education, or these other factors?

I would suggest that if you compared two people with similar intelligence, home background, etc., the one who entered the market earlier, got promoted earlier, learned "job skills" and "life skills" rather than "book learning", had more years of earning, might well be much better off.

Just something to consider: After earning a PhD and gaining a university job as a senior lecturer, my salary was no higher than a teacher who had been in the profession earning money during my time at university, and progressed up the salary ladder. My professional pension will be lower, and kick in 5 years later, than my undergraduate peers. I drive a lower standard car, take fewer holidays and eat out much less than most of my neighbours - and most of them don't have an undergraduate education, never mind a postgraduate degree.

No, on an anecdotal and empirical basis I just don't accept this "well established fact"
dunroving is offline  
Old Feb 6th 2013, 8:04 pm
  #59  
Ping-ponger
 
dunroving's Avatar
 
Joined: Jul 2002
Location: Dreich Alba
Posts: 11,964
dunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond reputedunroving has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by theOAP View Post
RE bold above: I'm afraid I'm going to add insult to injury. With your 25 years of UK NICs, you can not do this, no way, no how.
Yes, I already got that (see Posts #40 and #44).
dunroving is offline  
Old Feb 6th 2013, 8:48 pm
  #60  
In the pink
 
Mallory's Avatar
 
Joined: Oct 2006
Location: USA
Posts: 3,116
Mallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond reputeMallory has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
Hmm, I am not so sure. I think of it more as a "generally accepted truth", that is based on "stuff we are told".

Consider the following:

A fact is something that is immutable or undeniable. I don't think that applies at all.

There is a body of evidence that appears to support the assumption that a university education means higher lifetime earnings. However, like most quantitative evidence, it is based on average patterns. So, as I said previously, some degrees (law, medicine, finance) are associated with (considerably) higher salaries. However, these are balanced out by people with degrees in music, media studies, psychology, etc. Even vocational degrees like nursing and social work don't lead to particularly high salaries.

This body of evidence is generated by people with a vested interest in promoting a university education, namely researchers who work in universities.

Simple comparsons of people with and without a university education ignore the elephant in the room, namely the fact that university students are generally smarter, from better homes, with richer parents, etc. So is their higher lifetime salary (on average) due to a university education, or these other factors?

I would suggest that if you compared two people with similar intelligence, home background, etc., the one who entered the market earlier, got promoted earlier, learned "job skills" and "life skills" rather than "book learning", had more years of earning, might well be much better off.

Just something to consider: After earning a PhD and gaining a university job as a senior lecturer, my salary was no higher than a teacher who had been in the profession earning money during my time at university, and progressed up the salary ladder. My professional pension will be lower, and kick in 5 years later, than my undergraduate peers. I drive a lower standard car, take fewer holidays and eat out much less than most of my neighbours - and most of them don't have an undergraduate education, never mind a postgraduate degree.

No, on an anecdotal and empirical basis I just don't accept this "well established fact"
I met my husband when he was in the Air Force in Germany. When we got back to the US he got a full-time job, and went to college on the GI bill. When he was finished I worked full-time, went to college, and paid for it out of my own pocket. We had 2 children by that time.

If we had not worked we would have had zero social security years while we were at college. I would not have expected the government to give us free social security years if we had decided not to work.
Mallory is offline  

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.