Generally, SSA assumes that work which was covered under a foreign social security system was not covered under U.S. Social Security.

Generally, pensions based on noncovered work include social security or private pensions from foreign countries. Foreign payments may be only partially related to work (see GN 00307.290C.5.).

A foreign pension based on post-1956 work will trigger WEP if it is:

• •

  a private or governmental pension from a country which does not have a totalization agreement with the U.S., or

• •

  for months after December 1994, a private or governmental pension from a country which does have a totalization agreement with the U.S. — if the individual is receiving a nontotalized U.S. benefit and the foreign pension is not based on a totalization agreement with the United States (see GN 01701.305).

Only the part which is based on noncovered work after 1956 is used.

Foreign pensions based solely on non-covered foreign employment before 1957 do not trigger WEP (e.g., Ghetto pension or ZRBG).

Foreign pensions earned by the following under dual coverage situations do not cause WEP to apply:

1. a. 

   U.S. citizens and residents who worked in foreign countries and were subject to both U.S. and foreign social security coverage on the same earnings (e.g., a U.S. citizen working for a foreign affiliate under a 3121(l) agreement — see RS 01901.070);

2. b. 

   Self-employed persons who were covered by both the U.S. and the foreign country on the same earnings.

Some foreign pensions are not based in whole or in part on work performed after 1956. Therefore, the following foreign pension payments cannot be used to apply the WEP guarantee provision:

1. a. 

   Universal pension supplements payable to all aged individuals in a particular country, and not just to qualified workers.

2. b. 

   That part of a pension based on voluntary social security contributions which some countries allow individuals to make in order to increase the amount of their pension.

   EXAMPLE: Individuals in the United Kingdom may continue to make (voluntary) social insurance contributions to that system during periods they are not working in covered employment or self-employment.

3. c. 

   Statutorily mandated minimum social insurance benefits; i.e., that part of a social insurance benefit representing the difference between the amount of the benefit based on noncovered earnings and the actual amount paid after the benefit is raised to a statutory minimum.

   EXAMPLE: Italy pays a statutory minimum social insurance benefit, which is administratively increased if the benefit based on the individual's work history alone is not sufficient to meet the minimum required by law.

4. d. 

   Additional allowances allotted for dependents which increase the pension amount to a given worker, and which are unrelated to actual work performed.

   EXAMPLE: Both Ireland and Germany pay family allowance benefits for children, which are unrelated to the pensioner's work history.

5. e. 

   Pensions based only on residence or citizenship in a particular country; i.e., the pension is not based on work.

   EXAMPLES:

   • •

     Australia and New Zealand pay social (insurance) security benefits which are financed entirely from general revenue. There is no direct tax to either employees or employers to support the program. Both countries pay the benefits to all residents and may pay benefits abroad in certain situations.

   • •

     In Israel, the National Insurance Institute (NII) pays a flat-rate old-age pension to qualifying Israeli residents. The NII pension is payable whether a person worked or did not work.

     Since the basis for payment of the Australian, Israeli and New Zealand pensions are not derived from an individual’s work-related earnings, these benefits do not cause the WEP to apply.

6. f. 

   That part of a foreign pension which is based on covered work (e.g., part of the work on which the pension is based was for an employer which did not have a 3121(l) agreement for its employees, while part was for an employer which had such an agreement.)

NOTE:

The examples listed above are not all-inclusive. Other countries allow voluntary contributions, pay family allowance benefits, and so on.

Many countries have a “two-tiered” social security system; i.e., some benefits are directly related to the individual's work and earnings, while other benefits are residence-based. In other countries, payments made under the social security program appear to be earnings-based but in fact are not. It is therefore important to question the claimant/beneficiary closely during the claims interview (and to examine any evidence he/she may have) to determine whether the pension received may, in fact, be used to apply WEP. Generally, an award notice or letter issued by the paying agency in the foreign country will suffice.

EXAMPLES:

1. a. 

   Canada. Payments made under the Old Age Security Program (OAS) are residence-based and may not be used to apply WEP. Payments made under the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP) are earnings-based and are subject to WEP offset.

2. b. 

   Sweden. Benefits paid under Sweden's pension program include a flat-rate basic benefit based on residence, as well as a benefit paid under the earnings-related supplementary pension program (known as ATP).

3. c. 

   Norway. The basic pension paid under the National Insurance Scheme (NIS) is based on residence in Norway, while the supplementary pension is earnings-related.

4. d. 

   Finland. The National Pension Scheme (NPS) pays flat-rate benefits based on residence, while the Employment Pension Scheme (EPS) pays benefits based on a worker's earnings.

5. e. 

   Netherlands. Residence-related payments are made under the National Insurance Scheme (NIS) and earnings- related payments under the supplementary Employed Persons Insurance Scheme (EPIS). In addition, certain individuals who have lost their jobs prior to having attained retirement age may qualify for a “pre-retirement” payment. This payment is actually a form of unemployment compensation and may not be used to apply WEP.

6. f. 

   Switzerland. Ordinary pension benefits are based on a worker's contributions, while Switzerland also pays an “extraordinary” benefit which is needs-related, not based on contributions, and payable only to residents of Switzerland.

NOTE:

See GN 01701.320 for a list of totalization agreement countries and which types of pensions paid by those countries will cause WEP to apply and which will not.

Photocopies of evidence used in connection with WEP must be certified photocopies (see GN 00301.095). Evidence of entitlement to a foreign pension will generally be a letter or award notice issued by the paying agency in the foreign country.

It is the beneficiary's responsibility to notify SSA promptly when he becomes entitled to a pension based on noncovered work after 1956. This is explained in SSA Pub. No. 05-10137 (Social Security - Your Payments While You Are Outside the United States), the foreign rights and responsibilities booklet.

Apply the same rules for verifying and determining the amount of a foreign pension as for pensions based on other noncovered work (see RS 00605.370 - RS 00605.374).

If a claimant alleges he also paid Social Security tax for a period of employment or self-employment shown on the SSA-308 (Modified Benefit Formula Questionnaire-Foreign Pension) as a period of noncovered work for which a foreign pension may be payable, verify this by checking the earnings record. If necessary, ask the claimant to contact the employer for the information.

Ask the claimant to get the needed information directly from the employer or agency involved if the information on the SSA-308 is not sufficient to determine which parts are based on covered and noncovered employment.

Process the case as explained in RS 00605.370B. If the claimant has no (or an inadequate) reply to his requests to the foreign employer or agency, request the Office of International Operations (OIO) to assist in getting the necessary information (see GN 00904.220).

Be aware that sometimes certificates of entitlement to a foreign pension will indicate a weekly pension amount rather than a monthly amount. To convert a weekly pension to a monthly pension, multiply the weekly amount by 52 and divide by 12.