Hi again Judy, and thank you for the added details.
OK, here is the deal, and I will do my best to explain:
The Windfall Elimination
Provision works to prevent beneficiaries who appear to be lower lifetime income earners than they really are, from getting a calculation formula for determining their monthly retirement benefits that is only to be used for those even LOWER then they are. Your $348, which I agree is not high, reflects a rate based on only the SS earnings you reported each year here in the states. However, you have a little bit of pension producing earnings from Canada as well. Because SSA thought you only had XX earnings, it gave you a higher % of your known average lifetime monthly earnings
, as your benefit rate, than other workers whose full SS pension earnings were reported to the SSA. Now that it knows its number was wrong, it is seeking the proper information so it can give you the exact amount due you - i.e., it may have been giving you 50% of your lifetime average monthly earnings, while those with the life time income you actually have, are only supposed to get 45% rate applied. Lower income earners get a 'welfare' rate for SS, not the rate for those with substantially more years of working, more hourse, more income, etc., so that they get at least the minimum SS benefit amount. But again, that higher welfare % rate, which is graduated, is truly given to those with X lifetime income, not those with X+Y lifetime income. X+Y income gets closer to the 'normal rate' for normal income workers. The SSA explains it like this, "U.S Social Security retirement or disability benefits may be determined using a different formula under the Windfall Elimination Provisions (WEP), when you also receive a pension based on employment or self-employment, (employment, meaning work) from a foreign pension not covered by U.S. Social Security. Social Security benefit amounts use only earnings covered under Social Security with a benefit formula that gives proportionately higher amounts to workers with low lifetime earnings. A worker with a substantial period of non-covered work during their lifetime appears to have lower lifetime earnings than they actually had. WEP reduces the primary insurance amount upon which benefits are based and affects all benefits paid on that record except survivors. The difference in U.S. Social Security benefits computed under WEP cannot be greater than one-half the amount of the non-covered pension received in the first month you are entitled to both the non-covered pension and the U.S. Social Security benefit." See the SSA-308 form that I believe you have been provided.
However, that being said, you do NOT get reduced SS UNTIL you can claim your other pension. You are not permitted, generally, to choose to forego that other income, while relying on the US SS system to then give you a greater welfare rate of pay - if you can take it, you must, or still be held to have access to it.
If you are not yet old enough to claim it, you can answer those questions accordingly. YOu will want to make sure you have accurate information from your Canada agency.
Now, to make sure we touch on all your comments:
I have a document they sent asking me whether I'm retired and am I receiving a govt. pension based on earnings not covered by Social Security. If you are not YET retired, and can not claim til a later year, then answer that accurately as such.
When do I expect to retire,month, year. What is the earliest date I could have received a pension had I stopped working and made application. They want permission to contact my pension payer. When was my pension effective. You need to answer these - it is very likely that you will not receive your SS, it may be stayed, pending your compliance. Silence typically works against us when dealing with the SSA.
Note also this: If you had 30 years of "substantial" US SS earnings, WEP is waived. If you had 30 years in the States, working, let me know and I will get you the chart of amounts so you can see if all 30 are "substantial".
Also, the WEP reduction to your $348 cannot be more than one-half of the amount of your pension that is based on earnings on which you do not pay Social Security taxes. Let's say you collect $300 from Canada - your WEP coul d in theory, reduce your SS by $150. So you'd be collecting between the too, quite a bit more than just the US benefit: $348-150=$198 + 300 = $498. As shown in this example, it is better to collect both, then just one or the other, despite the application of the appropriate % rate.
They have also sent me a Modified Benefit Formula Questionnaire to fill out. Since I have not applied for anything I would just discount that . I thought you said you are getting $348? Or did you mean that is what you EXPECT to get if you apply for your SSR? Or, if you mean you are getting SSR, but haven't applied for your Canadian pension yet, that is irrelevent, because the inquiry is whether you can apply and get your Canadian pension. If so, an offset applies.
My main question is what can they do to my benefits?? See the above. They can reduce by some amount not to exceed $395.50 (2013 maximum), and it also should not exceed 1/2 of the Canadian pension you can access. But it is generally true that applying for both means you make the same or MORE than if you only applied for US SS. So don't forego your Canadian pension, since you will be paying the offset either way, you may as well at least take the Canadian pension.
I hope this helps! My goal is to provide you with excellent and accurate service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions. Kindly rate me "excellent" when you are done. I look forward to assisting you in the future, should you have legal questions.