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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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A client of ours is receiving a reduced rate (approximately

Resolved Question:

A client of ours is receiving a reduced rate (approximately 50%) of his US pension entitlement because he receives a UK pension.

When he queried this with the [email protected] he was sent a leaflet on 'Windfall Elimination Provision' which seems to relate to a reduction in USA pensions where Social Security taxes have not been deducted from earnings.

This does not seem to answer his query as to why his UK pension affects the USA pension he receeives when all his fellow ex pats do not have this problem.

Are you able to offer any furtehr information please?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.


Hi and welcome to Just Answer!
According to the US laws even the person paid taxes into social security system - his/her social security benefits may be reduced if that person is eligible for a pension based on earnings not covered by Social Security. That is the meaning of ’Windfall Elimination Provision' (WEP).
SSA Publication No. 05-10045 provides more details -
Because Social Security Administration might not know whether the person is eligible for a pension, so the benefit estimates he/she has received may not have been adjusted for such a possibility.
Please be aware that the Windfall Elimination Provision does not apply in some situations - for instance - if the person has 30 or more years of substantial earnings under Social Security. Also, the Windfall Elimination Provision does not apply to survivors benefits.
So - you may verify if WEP should be used in your client's situation.
The WEP was created by Congress in 1983 to prevent double dipping. You might think it is not fair - and that is correct in some situations. I suggest this article for some illustrations and see reader’s comments -

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