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UK state pension and USA social security

UK state pension and USA social security

Old Apr 5th 2016, 7:31 pm
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Default Re: UK state pension and USA social security

Originally Posted by Vespagirl69 View Post
Hello all,

I have a query about medical insurance. My husband (a Brit) and I (an American) are all set to emigrate to the US (Seattle to be exact) from the UK.

I was just wondering what others have done about obtaining medical insurance. Did you purchase an insurance plan while in the UK, or did you purchase a plan when you arrived in the US? Neither of us have insurance through work as we're starting completely fresh in the US.

Is travel insurance an acceptable option for the first 3 months? If so, what plans can you recommend? I saw a company that offered one way travel insurance for 90 days. Is this a viable option?

Many thanks for any help and advice.
Many US insurance companies do temporary health insurance which might be okay.

Otherwise you probably should go ahead and sign up for US health insurance from the wasington healthcare marketplace or direct from an insurer if you do not qualifiy for ACA 'subsidies'

I believe travel insurance requires you to be UK resident and on a trip of a short duration.
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Old Apr 5th 2016, 7:44 pm
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Default Re: UK state pension and USA social security

My wife and I both purchased insurance before we arrived effective from the date we arrived. She found an insurance broker who would do it and they arranged cover with Blue Cross/Blue Shield.
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Old Apr 5th 2016, 8:28 pm
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Default Re: UK state pension and USA social security

Hi there mods, wouldn't Vespagirl's query be better in a separate thread? It has nothing to do with pensions.
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Old Apr 21st 2016, 12:58 am
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Default Re: UK state pension and USA social security

I am a British citizen and lived and worked in the UK and earned enough credits for a partial pension. I am now a US citizen and have worked for 12 years in the US and am entitled to a SS pension of just over $700. The SS Asministration now want to reduce my pension by $200. After I add my small British pension and pay US Medicare I will be left with nothing. Making me totally reliant on my husband even though I have worked for 24 years. Is there anything I can do about this. After all my British pension did not cost the US one cent! I understand they want to collect from US citizens working overseas who didn't pay US taxes and want to collect full Social Security. But my case is totally different.
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Old Apr 21st 2016, 1:07 am
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Default Re: UK state pension and USA social security

Originally Posted by Lechtenberg View Post
I am a British citizen and lived and worked in the UK and earned enough credits for a partial pension. I am now a US citizen and have worked for 12 years in the US and am entitled to a SS pension of just over $700. The SS Asministration now want to reduce my pension by $200. After I add my small British pension and pay US Medicare I will be left with nothing. Making me totally reliant on my husband even though I have worked for 24 years. Is there anything I can do about this. After all my British pension did not cost the US one cent! I understand they want to collect from US citizens working overseas who didn't pay US taxes and want to collect full Social Security. But my case is totally different.
You are a victim of the Windfall Elimination Provision (WEP), designed to limit the liabilities of the US Social Security fund when people (not necessarily immigrants, because it also applies to government workers who have pension arrangements independent of Social Security) have other pension income.

You might be eligible to make up to seven years additional payments to your UK National Insurance account, which would boost your UK pension pro rata for the additional years.
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Old Apr 21st 2016, 3:24 am
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Default Re: UK state pension and USA social security

Originally Posted by Lechtenberg View Post
I am a British citizen and lived and worked in the UK and earned enough credits for a partial pension. I am now a US citizen and have worked for 12 years in the US and am entitled to a SS pension of just over $700. The SS Asministration now want to reduce my pension by $200. After I add my small British pension and pay US Medicare I will be left with nothing. Making me totally reliant on my husband even though I have worked for 24 years. Is there anything I can do about 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.
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Old Apr 21st 2016, 3:48 am
  #1132  
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Default Re: UK state pension and USA social security

Originally Posted by Pulaski View Post
You are a victim of the Windfall Elimination Provision (WEP), designed to limit the liabilities of the US Social Security fund when people (not necessarily immigrants, because it also applies to government workers who have pension arrangements independent of Social Security) have other pension income.
It's not quite like that, I don't think; it's not some form of means-testing to cut costs. It's to do with the way that the SS benefit is calculated, as a function of your total life earnings on which you've paid payroll taxes. It's weighted through 'bend points' so that lower earners receive a higher percentage of their pre-retirement income.

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.
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Old Apr 21st 2016, 3:50 am
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Default Re: UK state pension and USA social security

[QUOTE=Lechtenberg;11928142]..... I am now a US citizen and have worked for 12 years in the US ....[QUOTE]
Originally Posted by Giantaxe View Post
.... are you having to buy into Medicare because you don't have 40 quarters of SS contributions? ....
She said she has worked in the US for 12 years, so she certainly should have 40 quarters of SS contributions.

Last edited by Pulaski; Apr 21st 2016 at 3:56 am.
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Old Apr 21st 2016, 3:55 am
  #1134  
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Default Re: UK state pension and USA social security

Originally Posted by kodokan View Post
It's not quite like that, I don't think; it's not some form of means-testing to cut costs. It's to do with the way that the SS benefit is calculated, as a function of your total life earnings on which you've paid payroll taxes. It's weighted through 'bend points' so that lower earners receive a higher percentage of their pre-retirement income.

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.
That's the most complex explanation I have ever read, and I am not doubting that it might be correct. ..... But I just understood it to be to avoid government workers (primarily) double dipping and collecting excess benefits from both SS and the government scheme. ..... Though I can see that if both schemes are designed to be more generous to those on lower income, I can see that people who have fairly even government and non-government service could get treated as lower income in both schemes.
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Old Apr 21st 2016, 3:56 am
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Default Re: UK state pension and USA social security

Originally Posted by Pulaski View Post
She said she has worked in the US for 12 years, so she certainly should have 40 quarters of SS contributions.
Perhaps she was just referring to the Medicare premiums that everyone has to pay.
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Old Apr 21st 2016, 4:00 am
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Default Re: UK state pension and USA social security

Originally Posted by Nutmegger View Post
Perhaps she was just referring to the Medicare premiums that everyone has to pay.
That was the way I read her post. Some people seem to think that Medicare is relatively cheap, whereas I would not be surprised if she is paying $900/mth in Medicare premiums, or very close to it.
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Old Apr 21st 2016, 4:00 am
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Default Re: UK state pension and USA social security

Originally Posted by Pulaski View Post
That's the most complex explanation I have ever read, and I am not doubting that it might be correct. ..... But I just understood it to be to avoid government workers (primarily) double dipping and collecting excess benefits from both SS and the government scheme. ..... Though I can see that if both schemes are designed to be more generous to those on lower income, I can see that people who have fairly even government and non-government service could get treated as lower income in both schemes.
See the section on PIA formula, illustrating how the first part of a person's monthly wage 'buys' a 90% replacement SS payment, but the last part could be only 15%: https://www.ssa.gov/oact/cola/piaformula.html

Because it's based on monthly average earnings over your whole working life (well, technically your highest earning 35 years; there's an inflation adjustment), being a high earner for a few years would make you appear to 'deserve' as much as a low earner with more years.

Last edited by kodokan; Apr 21st 2016 at 4:03 am.
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Old Apr 21st 2016, 4:05 am
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Default Re: UK state pension and USA social security

Originally Posted by kodokan View Post
See the section on PIA formula, illustrating how the first part of a person's monthly wage 'buys' a 90% replacement SS payment, but the last part could be only 15%: https://www.ssa.gov/oact/cola/piaformula.html

Because it's based on monthly average earnings over your whole working life (well, technically your highest earning 35 years; there's an inflation adjustment), being a high earner for a few years would make you appear to 'deserve' as much as a low earner with more years.
Interesting, but thankfully only academically for me, as I will be working beyond thirty years and so escape WEP entirely. .... Meanwhile accumulating additional NIC years for a full UK pension too (assuming I get anything by the time I retire).
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Old Apr 21st 2016, 4:17 am
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Default Re: UK state pension and USA social security

Originally Posted by Pulaski View Post
Interesting, but thankfully only academically for me, as I will be working beyond thirty years and so escape WEP entirely. .... Meanwhile accumulating additional NIC years for a full UK pension too (assuming I get anything by the time I retire).
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.
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Old Apr 21st 2016, 4:41 am
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Default Re: UK state pension and USA social security

Originally Posted by Pulaski View Post
Originally Posted by Lechtenberg View Post
..... I am now a US citizen and have worked for 12 years in the US ....
She said she has worked in the US for 12 years, so she certainly should have 40 quarters of SS contributions.
Part A no premium, part B $105, part C (optional, anywhere from $40 to $200, part D $10 to $100. Even taking the very maximum of everything that's only $400 in monthly premiums.

Last edited by Giantaxe; Apr 21st 2016 at 4:49 am.
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