Why Was My Husband's Benefit Rate Reduced By So Much?

Jan 14 2017 - 7:15am

Hi Larry,
My husband recently turned 70 and, finally, applied for Social Security. His payment is supposed to be $789. When he was 65, he applied for his Canadian pension in the amount of $455 U.S. Now Social Security is telling us his payment will only be $320. Even with WEP, this seems drastic. He only had 4 out of 17 years of substantial earnings. We have read that his WEP reduction should be no more than 40 or 50 per cent of his Canadian payment(1/2 of $455.) Help!
Thank You,

Hi MK,

There is a WEP guarantee provision that limits the amount of the reduction in your Social Security benefit rate to no more than 50% of the amount of the non-covered pension (i.e. based on earnings that were exempt from US Social Security taxes). The actual calculation method is more involved, though, so it's not as simple as just subtracting half of the non-covered pension rate (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605370).

Still, given the information in your question, it certainly sounds like the WEP reduction applied in your husband's case may be more than it should be. You might want to consider filing an appeal of the determination made in his case, unless someone at Social Security can provide you with a good explanation. For more information on WEP and filing an appeal, see the following references: https://www.ssa.gov/planners/retire/wep-examples.html & https://www.ssa.gov/pubs/EN-05-10041.pdf.

Best, Jerry