gunflash

Hi,Gunflash here (Arsenal football club supporter living in the USA,
I am retired and drawing a lower S/S from the US government than the online estimation calculator shows (a difference of $600)
I receive approx $600 from a UK social security,fully paid up 30 years.
I am told because I have a UK S/S of $600 that is why my American S/S has been reduced even though I am fully paid up on the UK SS and have approx 25 years payments on the US SS?
Is there a link that will explain why I am being penalised by receiving the full amount from the UK but a reduced amount as per my US estimate?
Hope this makes sense and some one can give me some good advice which will be much appreciated.

Giantaxe

Search for "windfall elimination provision" or "WEP". There have been many threads on this.

Don't know your exact situation but I think the max WEP is $391 this year. It also is reduced with over 20 years of SS contributions and eliminated after 30. I'm sceptical that your SS could be reduced by the amount you suggest by the WEP.

nun

+1

That sounds like way too large of a reduction if you have 25 years of SS. If you also have 30 years of UK NI payments required to get full UK state pension were any of those voluntary?

gunflash

Yes I did make them up to get the full thirty yrs in and receive about 450 pounds.
When I did an estimate on my US social security the number came back $2200 and when I eventually did receive my SS I receive 1781 and $99 goes towards medicare....so my total benefit is $1880 so approx $320 per month is being deducted which may be a reasonable figure?
Thanks for your reply and is it worth going to a "hearing" or accept this as a good number?

gunflash

After researching WEP the YOC's is 24 and first factor in benefit formula is 60%
My next question is what is the formula to enter the 60% into so I can come up with a resolve.
Maybe I will try and Google the formula to see if the numbers fit?

nun

The portion of your UK state pension due to voluntary contributions should be deducted from you pension for the purposes of WEP. So if you paid 15 years of voluntary NI and 15 years from working in the UK you would only declare 15/30ths of the UK pension for the purposes of WEP.

Your WEP amount sounds plausible....but you might be able to reduce it if you didn't take account of the portion due to voluntary NI. If you were to work for 5 more years and get 30 years of FICA payments then WEP would not apply.

Michael

Even though he is currently collecting UK state pension and US Social Security, can he work part time (minimum earnings of $1,160 per quarter) for the next 5 years to not make WEP apply?

Giantaxe

Even if he has no voluntary contributions it still seems high. By my calculation the max wep should be 30% (90%-60%) of the first factor ($791) = $237.30. But I wonder how accurate the OP's estimated SS of $2200 is? That's the other potential variable in this.

gunflash

I am going to make an appt with SS and ask them how they come up with the numbers and get them to show me how it is worked out.If i can get the break down of the formula then I maybe able to post some good info'on here for future use?

nun

Just looking at the WEP chart your max WEP should be $197.8 if you have 25 years of substantial earnings and started SS this year.

http://www.ssa.gov/retire2/wep-chart.htm

When you go to SS make sure you know how the proportion of your UK pension that isdue to work related (non-SS) payments.

Giantaxe

Post 5 says 24 years, hence the amount I came up with.

Ebor24

I am worried about this as I am just about to send in my UK application. I have been hesitant because I am concerned that the voluntary NI contributions may not be taken into account. I have 33 years of contributions of which 30 are voluntary. So Only 3/33 of the UK pension should be considered. I plan to fill out Form SSA-308 to reflect these numbers and go to the local office when applying for my social security. I wish to heck they would repeal WEP but no chance with a grid-locked congress.