Social Security Issues
Americans abroad should not be penalized simply because they spent part of their careers abroad, or because they retire abroad and/or have a foreign spouse or adopted children. ACA supports legislation which would eliminate the Windfall Elimination Provision (WEP). Americans abroad should also have dedicated support from the Social Security Administration for accessing their benefits.
Social Security should provide dedicated support to Americans overseas who are accessing Social Security benefits. This includes on-line viewing of their accounts, assistance for first-time applications for Social Security numbers and a dedicated out reach for overseas Americans with questions and problems. Currently Social Security services are provided through the Federal Benefits Units (FBU) located in US Consulates and Embassies, many which have been closed or consudated in recent years. With more and more individuals coming into compliance and needing assistance with obtaining or reclaiming Social Security numbers and with questions on their benefits, the Social Security Administration needs to expand its out-reach and provide more direct assistance.
Windfall Elimination Provision
The Windfall Elimination Provision (WEP) reduces the Social Security (SS) benefits for individuals by up to 50% of their foreign pension benefits. The WEP impact is reduced by the number of years an individual has contributed to Social Security and only applies to individuals with foreign pensions who have contributed for between 10-29 years to Social Security with the maximum monthly reduction (2016) being the lower of $428 and 50% of your foreign pension benefit.
Self-employed Americans living abroad often must pay SECA taxes in addition to the social security taxes they pay in their country of residence. No voluntary program exists for non-self-employed Americans to contribute to the Social Security system.
Foreign spouses and adopted children of Americans are often denied survivor benefits. (For more detailed discussion please see: Eliminate Deficiencies of the Social Security System (Feb. 2015).
Legislation calling for the full repeal of WEP was introduced in the last Congress (117th). This legislation has been reintroduced in the new 118th Congress under House bill H.R.82 - Social Security Fairness Act of 2023 as well as the Senate version and S.597 - A bill to amend title II of the Social Security Act to repeal the Government pension offset and windfall elimination provisions. Foreign pensions should not count against or reduce U.S. Social Security benefits earned while working in the United States. U.S. citizens overseas receiving foreign pensions are not “double dipping,” these are retirement benefits earned overseas in addition to contributing fully to U.S. Social Security.
ACA supports the bills for repeal of the Windfall Elimination Provision (WEP) and stresses that both the House and Senate bills need to insure repeal of the WEP for US citizens overseas who receive benefits from foriegn pensions which can trigger the WEP application of reduced benefits to their US Social Security benefits.
Procurement of Social Security Numbers
Sevicing for US citizens living and working overseas is managed through the Federal Benefit Units (FBU) located in US Embassies and Consulates worldwide. A cut-back and consolodation of these units has lead to reduced servicing; long delay times and lack of follow-up.
Individuals who may have never obtained a Social Security number as an infant or when they were living in the United States, can do so by providing documentation to Social Security via their closest FBU. This information at times can be difficult to obtain or may not meet the requirements of the Social Security Administration (foriegn documents). Many individuals who need to obtain Social Security numbers in order to maintain foriegn banking services due to FATCA face long wait times putting them at risk of having their foriegn banks freeze or close accounts.
Retirees in need to information from the Social Security Administration, everything from a change in address to actuall application of benefits, often face the same problem of long delays and lack of response from the Social Security Administration or FBUs. The inability to create online accounts from overseas due to the need for a US-based address means these individuals cannot make simple changes to their information, i.e. change the bank where their benefits are to be deposited, that those living domestically can. Individuals who have paid into Social Security should have easy of access to the Social Security Administration and a dedicated team responsible for meeting their needs.