There are a few threads on this forum that explain how WEP can affect Canadian resident's income. I came across this recent document (http://www.fas.org/sgp/crs/misc/98-35.pdf) from Congressional Research that gives good explanation about WEP. On page 3 it says that WEP does not apply to benefits from foreign Social Security systems that are base on 'totalization'.
Does it mean that a Canadian with main income from US SS and some income from CPP/OAS will not be affected? It would be interesting to here from someone who is already getting income from this both systems.
WEP does not apply?
Moderator: Mark T Serbinski CA CPA
Let's clarify:
"(4) benefits from foreign Social Security systems that are based on a
“totalization†agreement with the United States"
That simply means that if you were, for example, getting CPP based on the agreement (no one does, because CPP does not need any toatlization to qualify) the the CPP itself would not be included in WEP.
So, this does not help in this case. Remember that the doc you are referring to is not the law, in is merely a synopsis. Some have tried unsuccessfully in court to have this interpreted as meaning that CPP cannot be included in any WEP calculation, but strictly speaking, this is referrinf to countries where one's SS history is used to qualify for that countries benefit, not vice versa.
What the documant does not say however, which we know to be true, is that SS benefits themselves, if earned because of totalization, cannot be reduced by WEP. This means if you are getting SS because you worked 6 to 39 quarters in US, and are using your CDn work history to qualify for SS, then your SS will not be reduced by WEP. since it is already diminished by nit having met the 40 quarter criteria.
So WEP affects this who get CPP and worked between 10 and 30 years in US.
"(4) benefits from foreign Social Security systems that are based on a
“totalization†agreement with the United States"
That simply means that if you were, for example, getting CPP based on the agreement (no one does, because CPP does not need any toatlization to qualify) the the CPP itself would not be included in WEP.
So, this does not help in this case. Remember that the doc you are referring to is not the law, in is merely a synopsis. Some have tried unsuccessfully in court to have this interpreted as meaning that CPP cannot be included in any WEP calculation, but strictly speaking, this is referrinf to countries where one's SS history is used to qualify for that countries benefit, not vice versa.
What the documant does not say however, which we know to be true, is that SS benefits themselves, if earned because of totalization, cannot be reduced by WEP. This means if you are getting SS because you worked 6 to 39 quarters in US, and are using your CDn work history to qualify for SS, then your SS will not be reduced by WEP. since it is already diminished by nit having met the 40 quarter criteria.
So WEP affects this who get CPP and worked between 10 and 30 years in US.
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Re: WEP does not apply?
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