Social Security Agreement between UK and USA

[Stuart and Katie 13]

Hi all,

Stuart here the UK beneficiary. I am trying to understand what the social security agreement between the UK and the USA means for me exactly. I am not far

off moving to the USA pending a successful interview tomorrow morning.

I have two UK pensions and obviously when I reach 65 I want to be able to claim a full UK state pension, however with moving abroad I am concerned

I will not be entitled to it.

I have read the NI38 "Social Security Abroad" form about the different classes of contribution that can be paid whilst abroad, and I believe as an unemployed

person I can only pay Class 3 contributions voluntarily to enable me to be entitled

However because of this two-way SS agreement I was wondering, do any SS contributions I pay in the US automatically transfer to the UK so I receive my full state pension entitlement?

If there's anyone that can explain this all to me in layman's terms I'd really appreciate it!

Thanks

Stuart

[Nich-Nick 3,354]

Here is one explanation from the US side which may be of help since you are moving to the US. http://www.ssa.gov/international/Agreement_Pamphlets/uk.html

[QueenOfBlades 224]

This is really confusing to me too, as I'm trying to decide whether to do voluntary NI contributions or not. I'm surprised how few people know about it.

[Stuart and Katie 13]

Here is one explanation from the US side which may be of help since you are moving to the US. http://www.ssa.gov/international/Agreement_Pamphlets/uk.html

Hi Nich-Nick,

Thanks for your reply I have read this however it raises additional questions:

1. The "certificate of coverage" section it states the US employer must request a certificate of coverage from the Social Security Administration to establish that I would be exempt from any UK taxes. In everyone else's experience, have you had to inform your employer of this at all or has your employer automatically known about it?

2. Under the monthly benefits table for UK it states that 44 years of contributions are needed for the full pension, however on gov.uk it states only 30 years of contributions are needed, can anyone clarify why there is such a difference here?

3. Here it does seem to state that any US contributions I make will count towards my UK state pension, however I would still appreciate someone from the UK who is currently living and working in the US to clarify this please.

• Benefits from the U.K.—The United Kingdom provides benefits through a two-tier program:
  1. 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.

[Nich-Nick 3,354]

<p><p><p> Hi Nich-Nick, Thanks for your reply I have read this however it raises additional questions: 1. The "certificate of coverage" section it states the US employer must request a certificate of coverage from the Social Security Administration to establish that I would be exempt from any UK taxes. In everyone else's experience, have you had to inform your employer of this at all or has your employer automatically known about it? 2. Under the monthly benefits table for UK it states that 44 years of contributions are needed for the full pension, however on gov.uk it states only 30 years of contributions are needed, can anyone clarify why there is such a difference here? 3. Here it does seem to state that any US contributions I make will count towards my UK state pension, however I would still appreciate someone from the UK who is currently living and working in the US to clarify this please.

• 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.

Stuart--I think I am interpreting it very differently. (your #1) I think notifying your employer is in the case where you would be on a temp assignment to a US version of your UK employer. You could continue to pay in to to the UK as you had before and after the stay in the US. This paragraph--

On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country. For example, if a U.S. company sends an employee to work for that employer or an affiliate in the United Kingdom for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in the United Kingdom.

If you are working for a US company in the US, then you will pay social security and there would be no reason the UK would be collecting anything on those wages. Is that your question? Do you think you need additional paperwork to keep from owing something to the UK after you leave there and begin work in the US? I got a little lost in where that question was going. Here's a smidgen of what we have sorta figured out. My husband is already qualified for the full basic UK state pension (currently £110/week) according to the UKBA online calculator. It is not 44 years service, so we haven't found where that comes from yet. (Your #2)

He currently works a bit here in the US and is paying into Social Security and Medicare. If he contines until age 66, he will be eligible to receive a monthly Social Security pension. It won't be much because of only working in the US a short time and not earning big bucks because it's only a couple of afternoons a week, as opposed to a young UK immigrant who may get in 30 years in the US at $75-$100k per year salary). However there is the Windfall Elimination Provision which will reduce my husband's Social Security check a bit because of receiving the UK state pension. I guess it is to keep you from double dipping. This has nothing to do with his private pensions and is about receiving government money, but not positive about that.

Your #3-- The counting of UK contribution years in the US, or vice versa is when you don't have enough in either country to be vested and thus claim a benefit in either. If you work in the US long enough to collect social security, then that's what you get. You won't get to count those same US years as worked in the UK also toward a full UK state pension. The agreement is designed to help if you split your careers between US and UK but didn't have enough in either to get a benefit from either country. You can't work 30 years in the US and call it a full 30 UK years too.

There is a tool online about the Windfall Elimination Provision (WEP) http://www.ssa.gov/international/wep_intro.html and a fact sheet.

To Queen of Blades who is surprised nobody knows about this-- It does my head in every time I try to understand it. I am still trying to learn about Medicare and haven't started Obamacare yet. And it could change 15 times before you reach age 66. Make an appointment with Social Security and see if one of the benefits persons can help you. Or ring up UKBA and ask how voluntary contributions will benefit you. Will you get the same benefit a full time worker/payer gets? And figure out how many years past age 66 you are going to live and collect that money.