How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 10172
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
1929974
Type Your Social Security Question Here...
Lane is online now
A new question is answered every 9 seconds

This question is regarding WEP.Before I moved to USA, I was

Customer Question

This question is regarding WEP.
Before I moved to USA, I was a British Citizen and lived and worked in London. I contributed National Insurance until 1988 to get my UK State Pension from London.
I immigrated to USA in 1989 and got my Greencard and Social Security number. I worked in USA for 25 years and I paid Social Security tax which was deducted from my paycheck to get my USA Social Security benefits.
I became an USA Citizen last year and I have a dual citizenship.
Currently I am getting UK State Pension plus private pension from my UK employer.
Question : When I apply for USA Social Security benefit during that time do I have to
mention that I am getting UK private and state pensions.
Will WEP apply to me?
thank you in advance
Submitted: 1 year ago.
Category: Social Security
Customer: replied 1 year ago.
WEP means Windfall Elimination Provision.Will this affect my Social Security benefit in USA and will it reduce my Social Security benefit (amount).
Expert:  Lane replied 1 year ago.
Hi,
.
So sorry, but yes, the WEP applies both to state and local government pensions (whose employees don't pay into Social Security while working there) AND foreign pensions.
.
HOWEVER, There ARE some exceptions (note, especcially the last bullet point here)
.
The Windfall Elimination Provision doesn’t
apply if ...
.
• You are a federal worker first hired after
December 31, 1983;
• You were employed on December 31, 1983, by
a nonprofit organization that did not withhold
Social Security taxes from your pay at first,
but then began withholding Social Security
taxes from your pay;
• Your only pension is for railroad employment;
• The only work you performed for which you did
not pay Social Security taxes was before 1957; or
• You have 30 or more years of substantial
earnings under Social Security.
.
Will you have 30 yearss paying into Social Secuurity? If so your Soclai Security will not be limited.
.
Let me know and we can go from there ... If you'd like I can make and offer to allow us to share contact info confidentially and I can rund the ymbers for you.
.
Let me know.
.
Lane
.
Expert:  Lane replied 1 year ago.
P.S.
.
... should also have mentioned the Totalizagtion agreement with UK.
.
.
.
See this from Social Security, Here: http://www.ssa.gov/international/Agreement_Pamphlets/uk.html
.
The Agreement May Help You, Your Family And Your Employer
While you work––If your work is covered by both the U.S. and the U.K. Social Security systems, you (and your employer, if you are employed) would normally have to pay Social Security taxes to both countries for the same work. However, the agreement eliminates this double coverage, so you pay taxes to only one system (see the section on "Coverage and Social Security taxes").
.
When you apply for benefits––You may have some Social Security credits in both the United States and the United Kingdom but not enough to be eligible in one country or the other. The agreement makes it easier to qualify for benefits by letting you add together your Social Security credits in both countries. For more details, see the section on "Monthly benefits".
.
.
.
And here's the site for the table that shows the Benefits and eligibility under the agreement:
.
http://www.ssa.gov/international/Agreement_Pamphlets/uk.html#monthly
.
.
.
.
Let me know if you have questions ...
.
Lane
.
I this has helped I'd appreciate a positive rating … (by clicking – or touching on - the stars or smileys on your screen) - That's the ONLY way I can be credited for the work here.
.
Let me know if you have questions
Customer: replied 1 year ago.
Hi Lane, as you have mentioned those employees did not pay social security tax while working there (London).Without Social Security Number OR Greencard, how can we pay social security tax in London.
When we were living and working in London during that time we had no idea that in future we will come to USA and settle down here in USA.
In London they deduct only National Insurance tax not social security tax from our pay check.
Can you please talk to your business partners in case if they have worked in a situation like ours.
Can you please respond as soon as possible.
Expert:  Lane replied 1 year ago.
.
I understand. If you didn't pay in, then there ARE going to be SOME reductions (unless, again, you an get the full 30 yeafrs under Social Security.
.
However, did you see this, on the Monthly benefits page I Linked?
.
.
.
How Benefits Can Be Paid
.
If you have Social Security credits in both the United States and the United Kingdom, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country's system, you will get a regular benefit from that country. If you don't meet the basic requirements, the agreement may help you qualify for a benefit as explained below.
.
Benefits from the U.S
—If you do not have enough work credits under the U.S. system to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and U.K. credits. However, to be eligible to have your U.K. credits counted, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the U.S. cannot count your U.K. credits.
.
.
Benefits from the U.K.
—The United Kingdom provides benefits through a two-tier program:
.
The first tier, called the basic pension, is payable to workers who meet a minimum length of work requirement. Under the agreement, if you do not have enough credits under the U.K. system, your U.S. credits can be counted. To be eligible to have your U.S. and U.K. credits counted, you must have at least one year of coverage credited under the U.K. system.
.
The second tier is called the additional pension and is based on both the length of work under the U.K. system and the amount of earnings. A person can qualify for the additional pension with as little as one year of U.K. coverage. Therefore, credits under the U.S. system will not be considered when determining eligibility for the additional pension.
.
.
.
.
How Credits Get Counted
.
You don't have to do anything to have your credits in one country counted by the other country. If we need to count your credits under the U.K. system to help you qualify for a U.S. benefit, we will get a copy of your U.K. record directly from the United Kingdom when you apply for benefits.
.
If U.K. officials need to count your U.S. credits to help you qualify for a U.K. benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the U.K. benefit.
.
Although each country may count your credits in the other country, your credits are not actually transferred from one country to the other. They remain on your record in the country where you earned them and can also be used to qualify for benefits there.
.
.
.
.
Computation Of U.S. Benefit Under The Agreement
.
When a U.S. benefit becomes payable as a result of counting both U.S. and U.K. Social Security credits, an initial benefit is determined based on your U.S. earnings as if your entire career had been completed under the U.S. system.
.
This initial benefit is then reduced to reflect the fact that U.K. credits helped to make the benefit payable. The amount of the reduction will depend on the number of U.S. credits: the more U.S. credits, the smaller the reduction; and the fewer U.S credits, the larger the reduction.
.
Hope this helps ...
.
.
Lane
.
I hope you'll rate me (that's the only way we get credit for the work here) based on thoroughness and accuracy, rather than any good news/bad news content ... But if there's something you don't understand , please let me know.
.
Expert:  Lane replied 1 year ago.
P.S.
.
This may also be very helpful.
.
(Use the detailed version)
.
http://www.ssa.gov/planners/retire/anyPiaWepjs04.html
.
Lane
Customer: replied 1 year ago.
I have read totality agent. Totality is to protect people from double taxation & qualify for the benefit.
Table 1: summary of agreement rule, that table mentions about US worker who is working in UK for US employer and UK worker working in USA for UK employer. This table is not applicable to me because in UK I was employed by UK employer BEFORE I MOVED TO USA. AFTER MOVING TO USA, I was employed by USA employer. I paid retirement tax (NI & SS) to both countries.
Table 2: I worked for 15 years in UK & paid NI plus I paid 3 years of voluntary contributions.
AFTER MOVING TO USA I worked for 25 years and paid SS tax. So I have enough credits in both countries to qualify for NI and SS benefits.
I feel that as I have paid tax in both countries and have earned enough credits in both countries, WEP should not affect me.
And if you feel WEP should apply to me then can you please explain in detail as to why WEP should be deducted from my SS.
Expert:  Lane replied 1 year ago.
Becasue you haven't worked a full 30 years under Social Scurity.
.
ANY time that you spend time in a system that does not pay into Social Security ... until you have a full 30 years in the Social Security System there swill be an offset.
.
That's just the way the Social Security Law is written.
.
I completely agree with you from a fairness perspective, but that's just not the way it works.
.
I have many clients that are teachers, and who received a State Teachers Retirement System (local government plan and those people while in that system do not pay into the SS system).
.
I'm not sure how the word gets out (possibly through their unions?) but theyare all WELL aware of the rules ... ANd for MANY of those it is a MISSION, a CRUSADE to get a full 30 years in the SS system so that they can get full pensions form both.
.
I cannot explain WHY. (Only the US Congress that draftes this law can tell you why). I CAN tell you tat there is a movement in Congress right now to change this, but I can only give you accurate information so that you can make informed decisions.
.
.
.
FOr example, right now there are two different bills in Congress regarding this:
.
(1) H.R. 973 Introduced By Rodney Davis (R- IL) - This is a complete repeal of both the Windfall Elimination Provision and the Government Pension Offset
.
(2) H.R. 711 Introduced By Kevin Brady (R-TX) - "To amend title II of the Social Security Act to repeal the windfall elimination provision and protect the retirement of public servants." It introduces a new formula that will lessen, but not eliminate the penalty.
.
Again, I hope you will rate me on accuracy and thoroughness, rather than good news or bad news.
.
Lane
.
Expert:  Lane replied 1 year ago.
P.S.
.
.
See this:
.
http://www.ssfairness.com/
.
Lane
.
Customer: replied 1 year ago.
Hi Lane, the example you mentioned above on teacher or other employee who did not pay SS tax, they are residents or citizen of USA and have worked in USA or have gone out to work in another country from USA. WEP law will affect them because law is written that way.
But in my case I was not a USA resident or citizen during the time I was in London. I was a UK resident and UK citizen and obeyed UK law and paid my retirement tax. Once I became a USA resident, I obeyed USA law and paid retirement tax in USA.
Now what do you think about my situation. What should I do. Please explain.
Expert:  Lane replied 1 year ago.
If you'll look back at the very first line of the very first answer I gave you ....
.
"So sorry, but yes, the WEP applies BOTH to state and local government pensions (whose employees don't pay into Social Security while working there) AND foreign pensions."
.
.
.
So sorry, but I just don't know any other way to put it.
.
.
.
Here's the Social Security Publication that deals with this:
.
http://www.ssa.gov/pubs/EN-05-10045.pdf
.
The very first paragraph in thaty document says,...
.
"The Windfall Elimination Provision may
affect how we calculate your retirement or
disability benefit. If you work for an employer
who does not withhold Social Security taxes
from your salary, such as a government agency
or an employer in another country, any pension
you get from that work may reduce your Social
Security benefits."
.
So sorry but this one is what it is.
Customer: replied 1 year ago.
Lane, I have read almost each and every social security pub, link and website and have not found a single document that tells me about British Citizen that did not pay social security tax while working in UK.Hypothetically if I decide that I want to appeal in court, as my advisor or lawyer what argument would you find to win my casePlease see the Civil action number 1:11-CV-01569-REB. CASE BETWEEN JOSE G RABANAL (PLAINTIFF) V. CAROLYN W COLVIN (ACTING COMMISSIONER OF SS DEFENDANT)
Expert:  Lane replied 1 year ago.
That's EXACTLY what the very first paragraph in the SSA publication tells you.
.
I'll CAPITALIZE the pertinent part for emplasis this time.
.
"The Windfall Elimination Provision may
affect how we calculate your retirement or
disability benefit. If you work for an employer
who does not withhold Social Security taxes
from your salary, SUCH AS A GOVERNMENT AGENCY
OR EMPLOYER IN ANOTHER COUNTRY, ANY PENTION
YOU GET FROM THAT WORK MAY REDUCE YOUR SOCIAL
SECURITY BENEFIT."
.
.
.
.
.
To your second question, in the case you reference ... In both THAT appeal and his prior appeal of the administrative decision, the plaintiff argued
that the ALJ erred in concluding that the WEP applied to his Spanish pension benefits because his receipt of those benefits is based on his Spanish citizenship, not on his earnings.
.
Note also that the Court AGAIN points out the law and makes that distinction again ..."WEP applies to non-covered benefits that are “based in whole or in part upon . . . earnings for service.” 42 U.S.C. § 415(a)(7)(A)
... See also 20 C.F.R. § 404.213(a)(3) (noting that the WEP applies to
“pensions from social insurance systems that base benefits on earnings but not on residence or citizenship”)
.
.
.
As the court pointed out, "As set forth in the statute, the PIA must be recomputed if the claimant is entitled to a non-covered benefit “based in whole or in part upon his or her earnings for service.” 42 U.S.C. § 415(a)(7)(A)"
.
.
.
The point that the court made in this case was that the Social Security Commission's, in both appeals (including the ALJ (Administrative Law Judge) hearing that was appealed to result in this case ...
decision to equate “earnings” with “work” is not clearly justified.
.
.
.
They NEVER did what was asked for when the case was first remanded back for further consideration ... Which WAS ... does work necessarily equate to earnings.
.
.
.
The the court went on to say that this lack of analysis and evidence BY ITSELF would likely have resulted in simply being remanded back to the lower court (the ALJ here) but there was an even MORE fundamental issue.
.
.
.
Here, I quote the court, "The governing regulation provides that foreign pensions subject to the WEP “include both pensions from social insurance systems that base benefits on earnings but not on residence or citizenship, and those from private employers.” 20 C.F.R. § 404.213(a)(3) (emphasis
added).
Thus, the regulation expressly excludes from the WEP any pension from a
social insurance system – such as the SOVI – that is based on residence or citizenship, regardless of whether it is also based on earnings."
.
.
.
So BECAUSE the Commission (the ALJ) already had ACCEPTED plaintiff’s position that his SOVI benefits were based on his status as a citizen of Spain, one of the two tests (awarded becasue of citizenship) even though it was ALSO based on earnings, the court found that the WEP was not to be applied.
.
.
.
I think that this case is distinguished from your situation becasue of your private scheme.
.
The difference here is that the ONLY pension being discussed in THIS case is Old-Age and Disability Insurance (SOVI).
.
.
.
You case would turn on eliminating from the WEP calculation the UK State pension ... (and we have not talked numbers, so the limitation that HAS been applied may have already done that, such that there would be an even greater limitation if BOTH the UK social security AND the private scheme were used).
.
Further, if this IS the case, and you can show thst the employer would not have PAID a pension to a non-UK citizen THEN you have a situation that would be COMPLEtELY analogous (in legal terms NOT distincuished) from the Rabanal case.
.
.
.
Tell me what you think
.
Lane
.
Customer: replied 1 year ago.
As you mentioned plantiff's position that his SOVI benefits were based on his status as a citizen of Spain, that's why court found that WEP was not to be applied.Can you please tell us how can we find out UK state pension and private pension were based on my status as a citizen of Great Britain (if you have any phone number so we can call and find out). OR if you have any knowledge about UK status of benefit that will help us to prove WEP will not be applied in my case.
Expert:  Lane replied 1 year ago.
Your UK state pension is based at least in part on being a UK citizen so, using the same logic, will not cause WEP.
The private pension, however ... likely ... is payable to anyone working for the company UK citizen or not.
The pension administrator can answer that question.
I hav already made an offer, you must accept so that we can enter contact information.
Customer: replied 1 year ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
What type of offer are you requesting to us as mentioned above
Expert:  Lane replied 1 year ago.
I offered you a phone calll some time back.
You should be seeing something that says "Get more help."
Just above this box on my screen I see the following:
"Your offer was successfully submitted. Please wait for further action from the customer."
Customer: replied 1 year ago.
Lane, I just checked your profile and found out that you are a certified Financial planner and not a Social Security expert.I wanted to deal with someone who is expert in Social Security and had dealt with cases like mine.Can you find out someone with Social Security expertise in Justanswer.
Expert:  Lane replied 1 year ago.
CFP's have more extensive training (both in initial licensing and continuing education, given my specialty, retirement) in Social Security than any other designation.
.
I also have a Juris Doctorate, a law degree, (a doctoral degree in the law), and Social Security IS a specialty.
.
I have been advising clients on Social Security and other retirement planning issues for 30 years.
.
Social Security is an integral part of retirement planning, one of the six financial planning areas, as per the CFP Board.
.
As I mentioned early-on, I have software that can be used to CALCULATE and maximize Social Security Benefits.
.
I have, when I sort my client data base, 67 clients who have WEP issues, although most of them coming from state and local governments, especially teachers. Four of my clients have WEP for the same reason you do.
.
Finally, I have pointed out for you, the fundamental distinction made in the case you referenced, (whether a foreign pension causes WEP to be applied).
.
In this case, the court (meaning the judge), makes a distinction between an individual receiving a pension BY VIRTUE of citizenship (as in a state, social security type pension, SOVI, in this case) and a pension based on earnings.
.
He goes further, to point out that The governing regulation, (20 C.F.R. § 404.213(a)(3)), provides that foreign pensions subject to the WEP “include both pensions from social insurance systems that base benefits on earnings but not on residence or citizenship, and those from private employers.”
.
Your case will turn on making he case that all of your foreign pensions are pensions that base benefits on residence or citizenship.... WHY? becasue of the statement above;"...foreign pensions subject to the WEP “include both pensions from social insurance systems that base benefits on earnings but not on residence or citizenship, and those from private employers.”
.
The case above was won based on the SOVI being the plaintiff's only pension AND that pension being based on citizenship.
.
I would submit that you will not get a more accurate analysis.
.
And again, once you accrue 30 years in the U.S. Social Security system this all becomes moot, anyway.
.
Hope this helps...
.
I'll be opting out now ... I would, however, remind you that until you rate someone positively here, they (I) will not be creddited for the work here. If someone actually gives you an answer that differes, you might want to keep that in mind.
.
Lane
.
Customer: replied 1 year ago.
Lane, thank you for clarifing your qualification and experience. Only today we checked your profile and thought you only have financial planning degree, but now after your explaination on your qualification now I understand that you deal with Social Security questions as well.
You do not need to opt out. It was my misunderstanding.
Both of us are retired and so we cannot afford to spend $29 on top of $45 that we have already been charged. We were under the impression that it was a free trial offer for 7 days but when I looked at my statement we have been charged $45.
We are very happy with your answers and will rate you with 5 stars.
Expert:  Lane replied 1 year ago.
I completely understand .. and my concern is that we get ot the point where you understand.
.
PLease let mw know if you need clarification here.
.
THe bot***** *****ne here, in my opinion is that SS, by default, will app;y WEP whenever it sees a foreign pension. ... and you may be able to exclude the State UK pension (based at least partially on Citizeship) if you push to the level of management with social security.
.
The private employer pension, however, is another story. The logic of the Rabanal case cannot be applied there, UNLESS your private pension has as a requirement that the pensioner be ONLY a UK citizen.
.
... appreciate your response.
.
Lane