As a U.S. citizen who has worked in Germany, you should know something about this:
Every year, thousands of Americans who work in Germany automatically pay social taxes in Germany. These taxes work a little bit like a bank account. When you return to the U.S., you can either cash it out or get a retirement pension.
Barely known is that a German retirement pension can affect your U.S. benefits paid by the Social Security Administration. That´s because of the Sec. 113. of the Social Security Amendments of 1983 (Public Law 98-21) better known as the Windfall Elimination Provision (WEP). So as an US citizen who has the privilege of receiving a German pension, you need to know something about this.
Because of the Windfall Elimination Provision, your U.S. benefits may be reduced based on a German pension. This is regularly not the case if:
- You have 30 or more years of substantial earnings under Social Security in the U.S.
- You meet the conditions for entitlement to the U.S. benefits irrespective of any periods completed in Germany (usually in total about 10 years of work)
- You meet the conditions for entitlement to the German benefits irrespective of any periods completed in the US (usually in total about 5 years of work)
- The contributions paid in Germany were before 1957
- No 7 d of letter d of the final protocol of the social security agreement beween the US and Germany is applicable
If thus points do not fit your case the WEP will be applied. In consequences your U.S. benefits might be reduced.
But there is less reason to worry. Why? Because of the WEP guarantee. What does it say? Your primary insurance amount (PIA) and the WEP PIA cannot exceed one-half of the monthly non-covered pension. But nevertheless professional assistance for applying your german pension is recommend to this complicated matter.