I lived in Canada and worked in private sector for 8 years and contributed to CPP during this time. My estimate for company pension from this service is about $800 and CPP income of about $200 per month.
I understand that due to Windfall Elimination Provision, my social security income will reduce due to less than 20 years service in US.
My questions are
a) For at par exchange rate, my SS income will reduce by half of $1000 or $500 per month as per my research. Is that correct?
b) Is my stay in US considered for OAS or only stay in Canada is counted before age 65?
c) Does OAS depends on world income or only Canada income? I am likely to exceed OAS threshold if world income is considered.
Thanks
Effect of Pension income in Canada on Social security income
Moderator: Mark T Serbinski CA CPA
As of this writing, SSA is still inconsistently applying WEP (the provision which reduces SS for anyone who worked at a job which did not have FICA premiums applied, including foreign work), but, yes, your SS will be reduced becuase you are getting CPP.
The exemption kicks in if you have 30 years of FICA payments (not 20 years). Some have successfully argued that Cdn time is covered under the SS/CPP agreement, to add up to 30 years (your post seems to indicate that you wouldn't qualify for this, since you didn't work 30 years in US and Canada: less "than 20 in US" and 8 in canada -- is this correct?)
a) I won't even hazard a guess as to what your WEP reduction will be, since it may or may not take into account your pension income. Just give them the numbers when they ask. I wouldn't even make enquiries on this if I were you. Just keep an ear out as to latest developments, and have good documentation of your total work history (US and Canada).
b) Only time spent in Canada between 18-65 counts towards OAS. The good news is that, if you spent 12 years in US, you will get the 8/40th you are entitled to forever, rather than for just 6 months (which would be the case if you had lived elsewhere where no Social benefit agreement was in place).
c) the clawback of OAS does NOT apply to Cdn non-residents. You will get the FULL 8/40ths, and report this on your 1040 as SS income (only 85% taxable). This is a nice break for Cdn non-residents. They will even direct deposit OAS/CPP in USD in your US bank.
The exemption kicks in if you have 30 years of FICA payments (not 20 years). Some have successfully argued that Cdn time is covered under the SS/CPP agreement, to add up to 30 years (your post seems to indicate that you wouldn't qualify for this, since you didn't work 30 years in US and Canada: less "than 20 in US" and 8 in canada -- is this correct?)
a) I won't even hazard a guess as to what your WEP reduction will be, since it may or may not take into account your pension income. Just give them the numbers when they ask. I wouldn't even make enquiries on this if I were you. Just keep an ear out as to latest developments, and have good documentation of your total work history (US and Canada).
b) Only time spent in Canada between 18-65 counts towards OAS. The good news is that, if you spent 12 years in US, you will get the 8/40th you are entitled to forever, rather than for just 6 months (which would be the case if you had lived elsewhere where no Social benefit agreement was in place).
c) the clawback of OAS does NOT apply to Cdn non-residents. You will get the FULL 8/40ths, and report this on your 1040 as SS income (only 85% taxable). This is a nice break for Cdn non-residents. They will even direct deposit OAS/CPP in USD in your US bank.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best