Usa Social Security

[Mike45]

I read recently that the UK equivalent to the USA Social Security payments were frozen if you lived in Thailand fulltime...no cost of living adjustments every year.

It made me think...what about my US Social Security checks.....Will they be frozen also or will I enjoy yearly increases just like if I had remained in the USA.

Thanks

Mike

[PeaceBlondie]

I get my COLA's every year. They know I'm here. However, one time I didn't keep them notified of my current address, and they stopped my pension because they didn't know if I was alive! They like to send out a questionnaire from time to time, such as to ask if you're working 45 hours per month or more while you're overseas, which voids your entire pension for that month, regardless of dollar amounts.

If you're only a few years away from getting your SS pension, that's how it's been the last several years. If you're under 55 now, you shouldn't expect the laws to stay the same.

[ProThaiExpat]

PeaceBlondie: Your comment regarding the over 45 hours working acting to nullify your social security entitlement came as a surprise. I thought about five years ago, there was a change that stated that money earned while on social security did not operate to reduce your benefit?

[Khun ?]

PeaceBlondie: Your comment regarding the over 45 hours working acting to nullify your social security entitlement came as a surprise. I thought about five years ago, there was a change that stated that money earned while on social security did not operate to reduce your benefit?

I Believe I heard the same but only if you waited until 65 to draw your SS payments.

If you elected to draw early then something like $1 for $1 loss after 20K earnings in a year.

Sure I will not remember this by the time I can draw it at almost 67.

[PeaceBlondie]

I've researched this a lot recently. The rule for work not covered by FICA/SECA (the employment tax laws for work covered under SS) is that if you're drawing it early (between your 62nd birthday and your full retirement age), you lose your entire SS check for any month they find out you worked over 45 hours per month. No matter how much you earned.

I thought of a way around this. I'm checking, but I believe self-employment tax (SECA) is payable on self-employed earnings that are earned overseas, even if the earnings themselves aren't subject to income tax. If you work for yourself, there apparently is no hourly limit. Then there might be the usual monthly dollar limitation, which is roughly $1,000 per month.

If you're past full retirement age (65 to 67, depending on your year of birth), the 45 hours per month of employment don't apply. In my case, earning Self-Employment credits would increase my pension, and probably be worth paying the SE tax. In most cases, it wouldn't be. Sunbelt tells me that Americans can be self-employed legally, with a work permit, if you convert from an O to a B visa.

[skipvice]

Go to there web site and all you Questions will be answered.

http://www.ssa.gov/

[think_too_mut]

I read recently that the UK equivalent to the USA Social Security payments were frozen if you lived in Thailand fulltime...no cost of living adjustments every year.

It made me think...what about my US Social Security checks.....Will they be frozen also or will I enjoy yearly increases just like if I had remained in the USA.

Thanks

Mike

Rest assured - you are not what the deposed PM liked to call "Quality Tourist".

[TAWP]

Jez, some call us Euro-trash, but I'm sure not even our 'liberal' social security-programs would allow anyone to have a vacation on a sunny beach and still be able to lift them. In fact, I'm sure they wouldn't, since your wouldn't be 'at moments notice to the workmarket'.

[TerryLH]

PB said

"In most cases, it wouldn't be. Sunbelt tells me that Americans can be self-employed legally, with a work permit, if you convert from an O to a B visa."

PB, can I assume you were talking to Sunbelt about your situation, and that they mean a retirement O visa and not a marriage O?

Terry

[skipvice]

I've researched this a lot recently. The rule for work not covered by FICA/SECA (the employment tax laws for work covered under SS) is that if you're drawing it early (between your 62nd birthday and your full retirement age), you lose your entire SS check for any month they find out you worked over 45 hours per month. No matter how much you earned.

I thought of a way around this. I'm checking, but I believe self-employment tax (SECA) is payable on self-employed earnings that are earned overseas, even if the earnings themselves aren't subject to income tax. If you work for yourself, there apparently is no hourly limit. Then there might be the usual monthly dollar limitation, which is roughly $1,000 per month.

If you're past full retirement age (65 to 67, depending on your year of birth), the 45 hours per month of employment don't apply. In my case, earning Self-Employment credits would increase my pension, and probably be worth paying the SE tax. In most cases, it wouldn't be. Sunbelt tells me that Americans can be self-employed legally, with a work permit, if you convert from an O to a B visa.

How much can I earn and still receive Social Security benefits?

Question

How much can I earn and still receive Social Security benefits?

Answer

SSA uses the formulas below, depending on your age, to determine how much your benefit must be reduced:

Note: There are different rules for people receiving Social Security Disability.

If you are under normal (or full) retirement age (FRA): when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2007 that limit is $12,960 and for 2006, that limit is $12,480. Remember, the earliest age that you can receive Social Security retirement benefits remains 62 even though the FRA is rising

Taken from the ssa web page

[lanny]

I've researched this a lot recently. The rule for work not covered by FICA/SECA (the employment tax laws for work covered under SS) is that if you're drawing it early (between your 62nd birthday and your full retirement age), you lose your entire SS check for any month they find out you worked over 45 hours per month. No matter how much you earned.

I thought of a way around this. I'm checking, but I believe self-employment tax (SECA) is payable on self-employed earnings that are earned overseas, even if the earnings themselves aren't subject to income tax. If you work for yourself, there apparently is no hourly limit. Then there might be the usual monthly dollar limitation, which is roughly $1,000 per month.

If you're past full retirement age (65 to 67, depending on your year of birth), the 45 hours per month of employment don't apply. In my case, earning Self-Employment credits would increase my pension, and probably be worth paying the SE tax. In most cases, it wouldn't be. Sunbelt tells me that Americans can be self-employed legally, with a work permit, if you convert from an O to a B visa.

How much can I earn and still receive Social Security benefits?

Question

How much can I earn and still receive Social Security benefits?

Answer

SSA uses the formulas below, depending on your age, to determine how much your benefit must be reduced:

Note: There are different rules for people receiving Social Security Disability.

If you are under normal (or full) retirement age (FRA): when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2007 that limit is $12,960 and for 2006, that limit is $12,480. Remember, the earliest age that you can receive Social Security retirement benefits remains 62 even though the FRA is rising

Taken from the ssa web page

The rule you cite is true for those who are living and working in the US. If you are living outside the US, there is a different rule. Outside the US, the limit is 45 hours PER MONTH. If you work more than 45 hours, you lose the entire benefit for that month. If you work less than 45 hours, you have to explain why you didn't work more!

[PeaceBlondie]

Thanks, Lanny. This 45 hour per month limitation on work outside the USA is very little known, even by lawyers, even by retired Americans abroad. I learned it on the day before I applied for my retirement benefits, when I was under a full time contract!

Lanny, can you verify whether a self-employed person who is receiving old-age benefits (before full retirement age), abroad, could get out of the 45 hour per month limitation if they are paying self-employment tax?

Answering other question: my O is a retirement visa. I understood Sunbelt Asia to say that I would have to switch to a regular B working visa to get a work permit. To me, it isn't worth the money, or the hassle. I don't think Sunbelt's advice applied to non-Americans, or to other types of O visas.

[LoveDaBlues]

I read recently that the UK equivalent to the USA Social Security payments were frozen if you lived in Thailand fulltime...no cost of living adjustments every year.

It made me think...what about my US Social Security checks.....Will they be frozen also or will I enjoy yearly increases just like if I had remained in the USA.

Thanks

Mike

Rest assured - you are not what the deposed PM liked to call "Quality Tourist".

Wake up on the wrong side of the bed ttm? The man just asked a simple question.

[DFCarlson]

I get my COLA's every year. They know I'm here. However, one time I didn't keep them notified of my current address, and they stopped my pension because they didn't know if I was alive!

PeaceBlondie: How did you communicate with the SSA to let them know that your address had changed to an overseas address? I tried calling the 800 number in the States but was told that they could not handle the address change to an address in Thailand.

[PeaceBlondie]

I get my COLA's every year. They know I'm here. However, one time I didn't keep them notified of my current address, and they stopped my pension because they didn't know if I was alive!

PeaceBlondie: How did you communicate with the SSA to let them know that your address had changed to an overseas address? I tried calling the 800 number in the States but was told that they could not handle the address change to an address in Thailand.

It's form 71-62 apparently. The lady at the tollfree number said to contact my embassy or consulate, and the nice lady in the CMai General Consulate sent it the next day by email, and I snail mailed the form to PO Box 7162 in Wilkesbarre, Pennsylvania. It's in process, so I don't know if it works.

They can handle an address change, but it's difficult. You have to call back and check that your attempt worked. Like, they're limited to lines, don't have space to spell out tambon or amphur, cannot use periods, etc. And they have to toggle some switch for international, so the computer won't ask for a state code like GA or TX.

I'm living proof that they will stop your checks if they don't have a current address and the mail they send you comes back as unclaimed.

[DFCarlson]

I get my COLA's every year. They know I'm here. However, one time I didn't keep them notified of my current address, and they stopped my pension because they didn't know if I was alive!

PeaceBlondie: How did you communicate with the SSA to let them know that your address had changed to an overseas address? I tried calling the 800 number in the States but was told that they could not handle the address change to an address in Thailand.

It's form 71-62 apparently. The lady at the tollfree number said to contact my embassy or consulate, and the nice lady in the CMai General Consulate sent it the next day by email, and I snail mailed the form to PO Box 7162 in Wilkesbarre, Pennsylvania. It's in process, so I don't know if it works.

They can handle an address change, but it's difficult. You have to call back and check that your attempt worked. Like, they're limited to lines, don't have space to spell out tambon or amphur, cannot use periods, etc. And they have to toggle some switch for international, so the computer won't ask for a state code like GA or TX.

I'm living proof that they will stop your checks if they don't have a current address and the mail they send you comes back as unclaimed.

Thanks, PeaceBlondie. I'll see if I can get a copy of the form. I maintain an address in the US and my good friend there forwards whatever mail arrived for me via International Priority Mail every 2 or 3 months, but I wanted to see if I could change my address for SS purposes. My mail will not be unclaimed, but it might be awhile before I can respond to it.

Edited April 14, 2007 by DFCarlson

[lanny]

Thanks, Lanny. This 45 hour per month limitation on work outside the USA is very little known, even by lawyers, even by retired Americans abroad. I learned it on the day before I applied for my retirement benefits, when I was under a full time contract!

Lanny, can you verify whether a self-employed person who is receiving old-age benefits (before full retirement age), abroad, could get out of the 45 hour per month limitation if they are paying self-employment tax?

Answering other question: my O is a retirement visa. I understood Sunbelt Asia to say that I would have to switch to a regular B working visa to get a work permit. To me, it isn't worth the money, or the hassle. I don't think Sunbelt's advice applied to non-Americans, or to other types of O visas.

As far as I know, it doesn't make any difference whether or not you are working for an employer or are self-employed. It doesn't matter whether or not you are paying the social security tax. If you are woking more than 45 hours, the rule is that you are exceeding the limit; if you were in the US and earned more than the $ limit, you must repay a portion of your benefits. Outside the US, it is not a gradual reduction in benefit, it is a cliff you fall over!

If you are self-employed, you will probably have a hard time convincing SSA that you are working less than 45 hours a month. In a normal, 5 day work week, 45 hours is only about 2 hours a day, 10 hours a week. What kind of job or business would require just 2 hours a day? If you have earned income, whether from a salary or self-employment, and claim to be working less that 45 hours a month, SSA will ask for an explanation. Unless the income you receive is less than about $300 a month, they are unlikely to believe you work so little.

The earnings limitations are meant to ensure that anyone drawing social security before their full retirement age is actually retired. Otherwise, everyong would start to draw at 62. Even though you draw a reduced benefit by starting at 62, you will get more total, lifetime money unless you live to something like 90 years old; the accumulated reduced payments amount to more money for 28 years is more than the accumulated amount for something less than 25 years.

Although SSA gets the W-2 from employers before sending them to IRS, they also get the income information from your tax return from IRS after you file. I have had clients receive notices from SSA saying that they have information on earnings and that benefits must be repaid.

I can't say that I have had any experience with a work permit and an "O" visa. I have always believed that work permits were only possible with a "B" visa. Maybe a marriage visa would do, I don't know.

[PeaceBlondie]

Lanny, some of the SSA information on the web is almost as clear as you pointed out, that the work limit is 45 hours per month - period. Other info (and none of it is easy to find) talks about earnings that are not subject to SS earnings. Well, self-employment overseas is subject to SECA tax, isn't it?

So, I'm confused. I sent three online inquiries to SSA, and both their responses so far only raised more questions. I have about 15 more months to go before full retirement age, and 45 hours per month isn't nearly enough work for an old workhorse.

[TerryLH]

"Answering other question: my O is a retirement visa. I understood Sunbelt Asia to say that I would have to switch to a regular B working visa to get a work permit. To me, it isn't worth the money, or the hassle. I don't think Sunbelt's advice applied to non-Americans, or to other types of O visas. "

Thanks for the answer PB. I have one more question for you.

Did you get your money back once the address problem was worked out?

Thanks

Terry

[skipvice]

Thanks, Lanny. This 45 hour per month limitation on work outside the USA is very little known, even by lawyers, even by retired Americans abroad. I learned it on the day before I applied for my retirement benefits, when I was under a full time contract!

Lanny, can you verify whether a self-employed person who is receiving old-age benefits (before full retirement age), abroad, could get out of the 45 hour per month limitation if they are paying self-employment tax?

Answering other question: my O is a retirement visa. I understood Sunbelt Asia to say that I would have to switch to a regular B working visa to get a work permit. To me, it isn't worth the money, or the hassle. I don't think Sunbelt's advice applied to non-Americans, or to other types of O visas.

You are right, after reading more I found the rule.

The foreign work test

Benefits are withheld for each month a beneficiary younger than full retirement age works more than 45 hours outside the U.S. in employment or self-employment not subject to U.S. Social Security taxes. It does not matter how much was earned or how many hours were worked each day.

A person is considered to be working on any day he or she:

Works as an employee or self-employed person;

Has an agreement to work even if he or she does not actually work because of sickness, vacation, etc.; or

Is the owner or part owner of a trade or business even if he or she does not actually work in the trade or business or receive any income from it.

Generally, if a retired worker’s benefits are withheld because of his or her work, no benefits can be paid to anyone else receiving benefits on his or her record for those months. However, the work of others receiving benefits on the worker’s record affects only their own benefits.

But why work if your are retired?

[PeaceBlondie]

Lanny, can you verify whether a self-employed person who is receiving old-age benefits (before full retirement age), abroad, could get out of the 45 hour per month limitation if they are paying self-employment tax?

You are right, after reading more I found the rule.

The foreign work test

Benefits are withheld for each month a beneficiary younger than full retirement age works more than 45 hours outside the U.S. in employment or self-employment not subject to U.S. Social Security taxes. It does not matter how much was earned or how many hours were worked each day...........

But why work if your are retired?

Thanks, skipvice, for finding the printed sentence. I put in bold above, the part that confuses me (mind you, retired IRS tax auditors usually remember how to read legal provisions). My point is - as it's stated, above - if you work self employed and pay the 15.3% self employment tax on it (in practice, it's more like 13%) - then the work limit of 45 hours shouldn't apply. But I don't trust the printed version.

When you work hard all your career (and my IRS career was very full and difficult), you don't get tired teaching 19 hours per week in hot classrooms filled with 49 students and one soi dog. I still have the energy and the will, unless I fall off the motosai again.

[lanny]

Lanny, some of the SSA information on the web is almost as clear as you pointed out, that the work limit is 45 hours per month - period. Other info (and none of it is easy to find) talks about earnings that are not subject to SS earnings. Well, self-employment overseas is subject to SECA tax, isn't it?

So, I'm confused. I sent three online inquiries to SSA, and both their responses so far only raised more questions. I have about 15 more months to go before full retirement age, and 45 hours per month isn't nearly enough work for an old workhorse.

Yes, if you file a US tax return, and, as you know, all US citizens and green card holders must file if they have income, IRS computers will assess the self-employment tax if there is a Schedule C or a 1099 with non-employee compensation and no Schedule SE. IRS, not SSA, enforces that rule and exceptions are very hard to establish.

I was surprised to see the quote about income not subject to social security taxes. I get an annual questionnaire from SSA and it always asks about employment. Because I am over my full retirement age, I don't have to complete that section but it is there. And it does not mention anything about social security tax coverage. I don't have the time right now to go back and do the research but I've never seen the reference to the tax coverage.

They stopped my benefits for three months a couple of years ago because I incorrectly filled in that section. They said I was working and had to pay back the benefits. After several calls to Manila and Baltimore, I finally got a woman who agreed, that I wasn't subject to the earnings limit and restored my payments. When they resumed payment, I got a nice fat check with about 3 months of benefits all at once.

[WISteve]

SSA is very big on direct deposit.

Perhaps the members who are receiving benefits in Thailand could answer a question?

Will they direct deposit to a bank in Thailand for you or do you have to use a US account and then transfer?

It's a ways down the road but it's always good to know ahead of time............

~WISteve

[backflip]

"Will they direct deposit to a bank in Thailand"

I believe that there is only one or two banks that have been authorized by the SSA to receive funds in Thailand. Perhaps a quick search of these forums will provide the bank name.

[ProThaiExpat]

A personal experience: Bangkok Bank, manger said many of her clients have direct deposits, made two applications for a direct deposit, both with bank forms and SSA forms, no joy. What the manager failed to mention or know was that direct deposits were only done by SSA if the bank in question was the New York branch of Bangkok Bank who is a member of the federal reserve system.

There was a SSA employee who was living on Guam, if memory serves me, who checked it all out for me before he retired and he came up with pretty much the same information. I even went through the U.S. Embassy, who has staff dealing with social security issues, and they didn't get it done.

On hindsight, I am now adverse to direct deposit to a Thai bank, preferring to continue to have direct deposits to my U.S. bank account, who is linked to my Schwab Account, as Schwab International Customers get one free money wire a quarter. So I accumulate the benefits in the U.S. bank, transfer it by moneylink with a few mouse clicks to Schwab and then either call Schwab or fax them with requests whenever I want to add to my Thai bank accounts.

My Schwab Visa Debit Card was a dream when it came to paying my hospital bill a few months ago as the Visa conversion rate is as favorable as one can get these days.

Edited April 15, 2007 by ProThaiExpat

[Heng]

SSA is very big on direct deposit.

Perhaps the members who are receiving benefits in Thailand could answer a question?

Will they direct deposit to a bank in Thailand for you or do you have to use a US account and then transfer?

My folks both receive benefits by direct deposit to Compass Bank (Texas) and withdraw (or not) via atm to Thailand. I think Compass is in other states too and their atm withdrawals are free worldwide.

PeaceB, how often do those SSA surveys come out? I don't recall seeing my folks doing any surveys. Wouldn't want them to miss out on their benefits.

[ProThaiExpat]

I get a questionnaire about once a year mailed to my address in Thailand. I have missed sending them in promptly due to travel overseas, in one case almost a year, and they always follow up with another form before cutting me off.

Once I never got the form when originally sent, and they mention that you missed reporting and this is your second mailing.

I was pleased to learn the form has a purpose other than checking on your mortality. I am sure not overpaying SS benefits is a big problem with overseas retirees who die.

Anyone have any experience with what happens when a beneficiary of SS dies? I am sure they look to the heirs to re-nburse for payments made after the date of death. I have read of many scams of relatives who attempt to continue to collect the funds after death

[PeaceBlondie]

My folks both receive benefits by direct deposit to Compass Bank (Texas) and withdraw (or not) via atm to Thailand. I think Compass is in other states too and their atm withdrawals are free worldwide.

PeaceB, how often do those SSA surveys come out? I don't recall seeing my folks doing any surveys. Wouldn't want them to miss out on their benefits.

Heng, I don't know how often those surveys/questionnaires come out, because I never received mine. As ProThaiExpat says, they send at least a followup letter if they get no reply from the first, and I never got either. Perhaps one of the nice ladies at the Consular Services section at the embassy or consulate can send form 71-62 by email, and your folks can send it to PO Box 7162, Wilkesbarre PA 18767-7162.

PM me if you want more info.

[klikster]

Bangkok Bank, manger said many of her clients have direct deposits, made two applications for a direct deposit, both with bank forms and SSA forms, no joy. What the manager failed to mention or know was that direct deposits were only done by SSA if the bank in question was the New York branch of Bangkok Bank who is a member of the federal reserve system.

I have a DD account. You need to take the SS package from the embassy to Bangkok Bank main HQ on Silom. Also requires a Power of Attorney .. from Embassy to BKK Bank. Ask the embassy. They are mandated to do all SS transactions free of charge.

I had to open a "Special Account" .. very restrictive. No ATM, no wire transfer, no interbank transfer. Be prepared to make more than 1 visit to Embassy and to Silom.

[ProThaiExpat]

Thanks Kikster for reminding me of another of the reasons I abandoned the direct deposit method, the restricted deposit account.

No internet transfer, no atm etc. So how do you make such an arrangement convenient?

Do you go to your branch often, take money out in cash? Do you take your entire deposit out in cash and put it in another account?