Why Am I Subject To The WEP Provision?

Dec 1 2017 - 6:42am

I am a Canadian citizen and resident receiving Canada pension benefits from working there. I also worked part time in the US for 18 years paying US social security and medicare payments. This entitled me to a small pension from US Social Security. However the amount has been substantially reduced due to the WEP. Why should that be when clearly I would never have paid US SS on my Canadian earnings but do not see why the WEP should apply since I am not a US citizen. Thanks

Hi,

The stated purpose of the Windfall Elimination Provision (WEP) is to prevent people from receiving a higher benefit rate than is commensurate with their earnings history. One of the 'social' aspects of Social Security is that benefit rates are skewed to pay people with relatively low lifetime earnings a bigger payback on their contributions than the rate paid to higher earners. The belief is that these lower earners would need the higher return in order to be able to support themselves in their retirement years. In 1983, Congress decided that it was unfair to pay this 'windfall' to people who had low Social Security covered earnings solely due to the fact that some or most of their earnings were exempt from Social Security taxes because they were contributing to a non-covered pension plan, so they enacted WEP. Your citizenship and residency are irrelevant in determining whether or not WEP applies. For more information on WEP, refer to this Social Security publication: https://www.ssa.gov/pubs/EN-05-10045.pdf.

Best, Jerry