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.
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) and ACA’s Position on Social Security Issues and the Overseas American.
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 located in US Consulates and Embassies. 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.
Legislation calling for the full repeal of WEP was introduced in the House in January of 2019, HR 141 "The Social Security Fairness Act" https://www.congress.gov/bill/116th-congress/house-bill/141/text A Senate Bill, S.521 https://www.congress.gov/bill/116th-congress/senate-bill/521/ was also introduced in February of 2019. Previous legislation was introduced in the 2018 Congress under bill number, HR 6933 and co-authored by Congressman Brady and Congressman Neal, “The Equal Treatment of Public Servants Act of 2018.” This bill was designed to provide relief from WEP via a new calculation of the reduction in benefits (reduced Social Security payments for those persons who have pensions from other sources) however that legislation did not include US citizens living and working overseas. In fact the bill language specifically excluded persons receiving pensions from foreign employers so any benefit from the new calculation would not benefit Americans overseas. See the language excluding US citizens living and working overseas in - paragraph (E) https://www.govtrack.us/congress/bills/115/hr6933/text.
In June of 2019, House Ways and Means Chairman Neal announced that he is working on a new bill for Windfall Elimination Provision (WEP): https://trta.org/congressman-richard-neal-releases-statement-addressing-wep-reform-efforts/. It is unclear what the specifics of the bill will entail,. Chairman Neal has stated, “I am developing a revised bill to provide meaningful WEP relief to current retirees and public employees while treating all workers fairly, which I will introduce this summer,” ACA is monitoring Chairman Neal's progress on the bill and will be providing a statement.
- General Information about Social Security (paying, receiving, foreign pensions, totalization, WEP, tax implications, "My account," etc.)
- Obtaining/Reclaiming your Social Security Number (SSN)
- Otaining your Social Security Number from overseas
- Social Security FAQ
- Social Security Numbers and US Passports
This ACA webpage was updated in August 2019