I am 63, British Ex Pat, lived in the USA 25 years now..
American Citizen now, remarried...

1/ Started my first job at 16, started paying NIC, and I was there 6 years, and when I left I had GBP 920 in the Company Pension scheme A in 1984.
2/ Started my next job in 1984, until 1994, or so, and contributed to the company Pension Scheme B.
3/ Had a few years self employed, and paid into a Self Employment Pension C for a few years.
4/ Moved to the USA, in 1999, got divorced from the UK Ex, and started paying FICA and SS.
5/ Got my 40 quarters in 2010, and qualified for SS.

Now planning, and indeed started Retirement, taking my SS early @62, getting $145,00/pa.

I have 18 years of SS Contributions to date.
Looked up my British State Pension and I have 22 years of NIC and looks like a projected GBP 137/ week, or GBP 7,125/pa when I hit 67.
Pension A is projected at GBP10,000/pa, starting @65.
Due to pension sharing with the Ex(who also lives in the USA now), Pension B, and C only amount to GBP 2,800/PA when I hit 65.

So, I figured I had it all worked out...
Then I found out about this WEP thing a while back, but the SSA test is ambiguous, and I probably did it wrong because It said I was not subject to WEP..

Am I subject to WEP on any/all my UK stuff?
How much?
What happens when my wife takes her SS, and i get spousal benefit?

With only 18 years SS contributions you are subject to WEP on all of your UK pensions up to a maximum of $1,174 per month (in 2024, it will increase annually with inflation). They will deduct from your SS 50 cents for every dollar of UK pension received, with a maximum deduction of $587 per month (in 2024). From your numbers you will be WEP’d by the monthly maximum. WEP will start as soon as you receive any UK payments and you are obligated to inform them when that happens. The WEP deduction is calculated once (or each time you start a new payment stream) but because of how they calculate cost of living increases it will effectively inflate each year by the same amount as the increase. Spousal benefits are not subject to WEP unless the spouse themselves was subject to WEP in which case their benefit would be reduced and you would receive half of their reduced benefit. You will receive the higher of your own benefit or half of your spouse’s but not both.

You might want to look at voluntary NI Contributions to boost your UK pension. Any part of the UK pension attributable to voluntary contributions is not subject to WEP. Scroll through this thread for a wealth of information starting from the most recent posts.Class 2 NI. What about us poor expats paying voluntary contributions?.

WEP can be reduced with 20 or more years of SS contributions, and be eliminated altogether with 30 years. Each year between 20 and 30 reduces the deduction by 10%.

Thinks for the clarification.
Ugh.
I had read up on Wep a couple of years back, but thought it didn’t apply.

There may be some better news though.

First of all, if you started taking social security at 62 then your WEP deduction will be roughly 70% of what it would have been at full retirement age. In your case that will reduce the WEP to about 70% of the 2024 maximum amount of $587. That is because the WEP deduction is calculated at full retirement age and deducted from the social security due at full retirement age. They then adjust that amount by whatever is required to take into account early or deferred retirement. That has the net result of decreasing WEP by up to 30% if commencing social security at age 62, or increasing it by about 30% if retirement is delayed to age 70, and of course it will be adjusted proportionally at any age in between. Those deferring retirement may find that their WEP adjustment is higher than the maximum WEP applicable in the year they retired, and those retiring before full retirement age may find their WEP is capped out a lower amount than the maximum for that year.

Second, there is a bipartisan bill going through congress that will eliminate WEP. Similar bills have been proposed before and never got enough support to pass. This one has a little more support than in the past, so there is an outside chance it could be brought and passed at some point in the next year or two.

I wonder if there will be a lame duck and how effective it might be.

As a standalone bill I doubt it will go anywhere, but who knows. I am surprised it made it out of committee. With Trump winning the Presidency there will no doubt be a giant tax negotiation and perhaps it will get rolled into the ensuing tax bill. Either way we can only hope.

Thanks for the input.

I had subscribed to updates on the bill, and got this today...

Retirees Call on Speaker Johnson to Bring Social Security Fairness Act to the House Floor
The following statement was issued by Richard Fiesta, Executive Director of the Alliance for Retired Americans, regarding House Freedom Caucus members’ attempts to try to kill the Social Security Fairness Act, H.R. 82:
“Yesterday while Americans were focused on Election Day, two members of the House Freedom Caucus blocked 2.5 million retired public workers or their spouses from receiving the Social Security benefits that they have earned.
“The bill that Reps. Bob Good (R-VA) and Andy Harris (R-MD) tried to kill has more than 300 bipartisan co-sponsors, including House Speaker Mike Johnson. If they thought no one would notice, they were sorely mistaken.
“The members of the Alliance for Retired Americans are calling on Speaker Johnson to bring the Social Security Fairness Act to the floor for a vote this month, as planned. This issue affects millions of Americans, and the bill to restore their benefit deserves an up or down vote on the merits.
“The Social Security Fairness Act, H.R. 82, eliminates the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP), which unfairly reduce Social Security benefits for public sector retirees who receive a public pension — or the spouse or survivor of a Social Security beneficiary — who worked in a job not covered by the Social Security program.
“The WEP and GPO disproportionately affect lower-income workers and women. As a result, many face economic hardship during retirement.”
We will continue to fight for H.R. 82.

Correction... $14,500 pa on SS, not $145,000... decimal points make a difference...

https://www.newsweek.com/republicans...n-bill-1982423

Thanks for this. The bill is likely dead.

That article seemed a little left leaning, blaming the republicans.
it’s all just part of the sausage making that goes on in Washington.
I believe that if Johnson is for it, that’s a big plus, and if there is genuine appetite for resolving the issue, it’s possible.
With teachers, police and firefighters behind it, that’s a powerful force.
We can only hope that it gets passed, or maybe blended in with the SS modification bill that is needed.

Would there be any WEP for the period from age 62 (SS) until 67 when UK state pension kicks-in?

Hi,
From what Glasgow Girls says, it looks like the bigger private pension A, and the two smaller ones, B and C,that I start getting in 2 years@65 will need to be declared, and will trigger a WEP reduction.
I think they will total $1250/month, so will max out my WEP deduction on their own...
I have friends who are ex Law Enforcement, Fire service, Teachers and railway, and whilst I think its unfair to them, all those pension rights were earned sans SS and FICA payments...
It does seem to me grossly unfair to impose WEP, on monies I earned and saved long before I came to the USA!

But here is a question....
What happens if I take my 25% tax free lump sum up front?
Has anyone done this?...
I've read extensively up on the USA Tax ramifications, and whilst most seem to say its tax free in the UK, but not in the USA...
There are a few that say its tax free in the USA too, due to the Tax Treaties... I dont know.
Any input on that, or a link to anyone who has been thru this?
But what about if I take the 25% Lump sum, and a reduced pension going forward... what does that mean to WEP????

No WEP until you are in receipt of overseas pension payments.

Unfortunately if you take a pension lump sum amount they pro rate that into the pension you would have received (using their own algorithm) and WEP you on that amount, in addition to the WEP due on the actual regular payments. They will do this even if you take the lump sum prior to starting social security. Bottom line is there is no way to avoid WEP on any kind of pension lump sum unless you forfeit all pension rights before you become eligible to withdraw the pension (which in the case of a UK pension is all but impossible).

It is generally agreed that all UK pension lump sums are taxable in the US, including the 25% amount that is tax free in the UK. However as you point out a small minority disagree. Non US citizens have a fairly clear argument to avoid tax on a lump sum, but US Citizens do not. There is plenty of discussion on this in several recent threads.