Social Security rules say that a change in the amount of a non-covered pension must be reported to SSA within 10 days of end of the month in which the change occurred. This requirement is in place to enable SSA to recalculate the Windfall Elimination Provision (WEP) reduction when the amount of a pension changes. (The WEP reduction is initially calculated when a Social Security participant applies for retirement benefits.)
Many expatriates receive a (non-covered) pension, and are therefore subject to WEP. The amount of the pension in the foreign country's currency is typically fixed for an entire year. Some foreign countries (such as the UK) convert the pension to dollars and do a direct electronic funds transfer to the recipient's US bank account once every four weeks or monthly. Due to normal fluctuations in exchange rates, the dollar amount of the deposit varies with each deposit. The monthly variation is small, usually less then 1% each period. (However, recently the variation was very large, due to Brexit, but that's a separate issue.)
My question is: Does SSA actually expect recipients to report each month the (variable) DOLLAR amount that was received in payment of their foreign pension when that DOLLAR amount changes slightly each month due to fluctuating exchange rates? Or does SSA require only that a report of a change in the amount of the pension be submitted when the foreign country changes the amount in their own currency, such as when an annual pension adjustment occurs?
It seems to me that if the hundreds of thousands or millions of recipients of foreign pensions were to submit a monthly report of their pension amount to SSA, the agency would be overwhelmed. But maybe that's what is supposed to happen. Please help with an answer. Thank you.
Many expatriates receive a (non-covered) pension, and are therefore subject to WEP. The amount of the pension in the foreign country's currency is typically fixed for an entire year. Some foreign countries (such as the UK) convert the pension to dollars and do a direct electronic funds transfer to the recipient's US bank account once every four weeks or monthly. Due to normal fluctuations in exchange rates, the dollar amount of the deposit varies with each deposit. The monthly variation is small, usually less then 1% each period. (However, recently the variation was very large, due to Brexit, but that's a separate issue.)
My question is: Does SSA actually expect recipients to report each month the (variable) DOLLAR amount that was received in payment of their foreign pension when that DOLLAR amount changes slightly each month due to fluctuating exchange rates? Or does SSA require only that a report of a change in the amount of the pension be submitted when the foreign country changes the amount in their own currency, such as when an annual pension adjustment occurs?
It seems to me that if the hundreds of thousands or millions of recipients of foreign pensions were to submit a monthly report of their pension amount to SSA, the agency would be overwhelmed. But maybe that's what is supposed to happen. Please help with an answer. Thank you.
Retirement Benefits: Reporting Changes in Foreign Pension Amount to SSA
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