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Voluntary National Insurance Contribution Record

Voluntary National Insurance Contribution Record

Old Mar 4th 2019, 10:29 am
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Default Voluntary National Insurance Contribution Record

I just noticed when checking on the Gateway website all of my voluntary contributions have been recorded as self employment. Is this the way its reported for everyone else on their record as well?

It should be reported as voluntary rather than obligitary self employment I would have thought
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Old Mar 4th 2019, 2:23 pm
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Default Re: Voluntary National Insurance Contribution Record

I don't really think it matters either way.,
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Old Mar 4th 2019, 2:29 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by Hotscot View Post
I don't really think it matters either way.,
For Windfall Elimination Program purposes it may. Voluntary contributions to UK State Pension are not counted against WEP.
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Old Mar 4th 2019, 2:38 pm
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Default Re: Voluntary National Insurance Contribution Record

Good to know!
I don't have access to Gateway currently but because I'm self employed, ie. I have a business empire, I'll need to check that it goes into Self Employed.

So, WEP because you have a Gov pension? (Won't apply to me.)
And you say Self Employed contributions do count when calculating WEP?
Links would be handy...

Last edited by Hotscot; Mar 4th 2019 at 2:41 pm.
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Old Mar 13th 2019, 2:52 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by Beraider View Post
I just noticed when checking on the Gateway website all of my voluntary contributions have been recorded as self employment. Is this the way its reported for everyone else on their record as well?

It should be reported as voluntary rather than obligitary self employment I would have thought
Resurrecting this thread as I'm trying to get similar things straight in my mind.

My record shows self-employed rather than voluntary. That's the usual. As I understand it for WEP it is who pays it, not the basis. If you pay it, that portion will not count under WEP. Whether you pay it voluntary or otherwise, it is the fact that you paid it, not an employer.

My understanding is that when I finish off my 35 years of contributions to the UK state pension 9 years will be self-employed (voluntary) and therefore WEP calculations will be based on 26 thirty-fifths of the value of the eventual pension. But I'm still trying to make sense of all the facts... (We need a smiley that represents headache!) Luckily there's a couple of years left to figure it out.
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Old Mar 13th 2019, 4:37 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by celticgrid View Post
My record shows self-employed rather than voluntary. That's the usual. As I understand it for WEP it is who pays it, not the basis. If you pay it, that portion will not count under WEP. Whether you pay it voluntary or otherwise, it is the fact that you paid it, not an employer.
You may want to give this some extra consideration.

If the work was performed in the UK, Class 2 (and Class 4) NICs paid during periods of self-employment was obligatory, not voluntary, and is paid through self assessment to HMRC. When you have your SSA interview, they ask if there are any voluntary contributions to non-covered work.
https://www.litrg.org.uk/tax-guides/...-self-employed

WEP is applied when work performed, that, under normal US circumstances, would have FICA withheld, does not have FICA withheld. That includes work performed both inside and outside the US.

Consider a UK employee on a UK company final salary pension scheme. The employee pays a portion of their own pay from every pay cheque into their pension fund, and the employer pays the rest. Neither the UK employer nor the UK employee pay FICA. If the employee also is eligible for US SS, the entire pension amount is part of WEP calculations. Consider a US employee on a US company final salary pension scheme. The US employee pays a portion of their own pay from very pay cheque into their pension fund, and the US employer pays the rest. But, if neither the US employer nor the US employee pay FICA, the entire pension amount is part of WEP calculations. In both cases, the working individual has paid into their pension, but the obligatory portion they paid is still part of the WEP calculation.

Food for thought. I'm curious, what is the source of your information - "WEP, it is who pays it, not the basis. If you pay it, that portion will not count under WEP. Whether you pay it voluntary or otherwise, it is the fact that you paid it, not an employer"? It might be correct, if it's a good source.

(The part I'm unsure of concerns US pensions that had no FICA paid. Is it really the full pension amount that is part of the WEP calculations, or is it only the employer part?)

Last edited by theOAP; Mar 13th 2019 at 4:42 pm.
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Old Mar 13th 2019, 5:59 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by theOAP View Post
You may want to give this some extra consideration.

If the work was performed in the UK, Class 2 (and Class 4) NICs paid during periods of self-employment was obligatory, not voluntary, and is paid through self assessment to HMRC. When you have your SSA interview, they ask if there are any voluntary contributions to non-covered work.
https://www.litrg.org.uk/tax-guides/...-self-employed

WEP is applied when work performed, that, under normal US circumstances, would have FICA withheld, does not have FICA withheld. That includes work performed both inside and outside the US.

Consider a UK employee on a UK company final salary pension scheme. The employee pays a portion of their own pay from every pay cheque into their pension fund, and the employer pays the rest. Neither the UK employer nor the UK employee pay FICA. If the employee also is eligible for US SS, the entire pension amount is part of WEP calculations. Consider a US employee on a US company final salary pension scheme. The US employee pays a portion of their own pay from very pay cheque into their pension fund, and the US employer pays the rest. But, if neither the US employer nor the US employee pay FICA, the entire pension amount is part of WEP calculations. In both cases, the working individual has paid into their pension, but the obligatory portion they paid is still part of the WEP calculation.

Food for thought. I'm curious, what is the source of your information - "WEP, it is who pays it, not the basis. If you pay it, that portion will not count under WEP. Whether you pay it voluntary or otherwise, it is the fact that you paid it, not an employer"? It might be correct, if it's a good source.

(The part I'm unsure of concerns US pensions that had no FICA paid. Is it really the full pension amount that is part of the WEP calculations, or is it only the employer part?)
All of which just brings on the headache more!

Thanks, though. All good information.

Rather than speculate on possible permutations, in my case the 9 years of voluntary payments are all truly voluntary and cover(ed) periods when I was employed outside the UK by non-UK employers and no obligation to make payments, so I think I'll be good on saying those were voluntary whichever way you define that..

As for the source of my understanding - believe me, I have looked for it. I recall reading such a thing maybe 4 years ago but cannot figure out where. If I ever stumble across it I'll let everyone know. However, as per above the status of the 9 years seems clear even if the basis of that bit of my understanding is incorrect.

On a different point, do you (or anyone) have a link to help me understand which pensions are taken into consideration under WEP? I'm thinking I read somewhere about pensions arising from foreign government employment were excluded? But if that is so, what constitutes foreign government employment?
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Old Mar 14th 2019, 6:17 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by celticgrid View Post
Rather than speculate on possible permutations, in my case the 9 years of voluntary payments are all truly voluntary and cover(ed) periods when I was employed outside the UK by non-UK employers and no obligation to make payments, so I think I'll be good on saying those were voluntary whichever way you define that..
I agree.

Originally Posted by celticgrid View Post
On a different point, do you (or anyone) have a link to help me understand which pensions are taken into consideration under WEP? I'm thinking I read somewhere about pensions arising from foreign government employment were excluded? But if that is so, what constitutes foreign government employment?
These may help:
Information for government employees (WEP and GPO)
https://www.ssa.gov/planners/retire/gpo-wep.html

WEP fact sheet (See page 1, Some exceptions)
https://www.ssa.gov/pubs/EN-05-10045.pdf

But there is nothing concerning foreign governments. Perhaps you are thinking of taxation of government pensions?
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Old Mar 14th 2019, 8:29 pm
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Default Re: Voluntary National Insurance Contribution Record

Originally Posted by theOAP View Post
I agree.


These may help:
Information for government employees (WEP and GPO)
https://www.ssa.gov/planners/retire/gpo-wep.html

WEP fact sheet (See page 1, Some exceptions)
https://www.ssa.gov/pubs/EN-05-10045.pdf

But there is nothing concerning foreign governments. Perhaps you are thinking of taxation of government pensions?
Thanks so much for taking time and being helpful.

I may indeed have been thinking of taxation of government pensions. I shall have to go digging on that to see if there's anything in it that affects me.

Retirement planning is an endless merry-go-round of regulations and paperwork - not helped by changing legislation. I have a sneaky feeling that within days of finally figuring it all out either the US or UK (or both) will have another round of tax/benefit changes,,,,

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Old Mar 14th 2019, 9:11 pm
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Default Re: Voluntary National Insurance Contribution Record

Since we're in WEP territory I've just been reading this...
https://socialsecurityintelligence.c...servants-know/.

When Mrs H leaves teaching soon I'm urging her to transfer her pension, as a lump sum, to an IRA for self control. (Of the IRA, not hersel.)
Looks like she won't escape WEP but I'm still researching the GPO. I don't think she escapes that either.
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