Exchange Rate for WEP Calculation

[exPenn]

My wife (ex-USC, Canadian resident) will be applying for her US Social Security next month. Since she is receiving CPP, her SS monthly benefit will be subject to a WEP reduction of 1/2 her monthly CPP. I'm starting to wonder how this calculation plays out in practice. I can think of at least 3 scenarios:

1) Because of the Canada - US Social Services agreement, SS and CPP can exchange information. SS will ask my wife for her SIN number, and obtain her monthly benefit amount from CPP, and apply the exchange rate they deem appropriate to calculate her WEP. (She was asked to give her SS number when she applied for CPP).

2) When she applies for SS she will be asked to provide her monthly CPP benefit in $Can (and perhaps asked to supply documentation), then SS will apply their exchange rate to calculate her WEP.

3) When she applies for SS she will be asked to provide her monthly CPP benefit in $US. Then the question becomes 'what exchange rate should we use?' -- the Bank of Canada exchange rate on the day we answer the question ( https://www.bankofcanada.ca/rates/excha ... nge-rates/ ), or the most recent US Treasury exchange rate (https://fiscal.treasury.gov/reports-sta ... rrent.html ), or some other rate.

If anyone has been through this process, sharing your experience would be greatly appreciated.

[nelsona]

Probably all of the above. Not a biggie though. I think we would be talking pennies in any event. I believe she will be asked to fill a form, on which she will list her CPP benefit (and any other Cdn company pension she receives) in US dollars. They will then check with Service Canada who will give them the info in CAD.

FYI, whatever the calculation is at the moment of application, it is never revisited in future (unless she keeps contributing to SS, in which her WEP reduction would get smaller each year of US work over 20 years). So the poor CAD exchange right now helps her forever, even if the CAD would ever return to par.

[nelsona]

If it comes down to it, the US govt only uses US govt sources for this, so it would be Treasury information, not BoC.