Are You Getting The Social Security You Deserve?
By Douglas Goldstein, CFP®
The “Greenberg Settlement,” the resolution of a class-action lawsuit brought against the Social Security Administration (SSA), changes the way American olim receive their American Social Security payments.
Under the SSA’s Windfall Elimination Provision, if you receive a foreign earnings-based pension, your American benefits are reduced. Until now, claimants of Social Security living in Israel who also received Bituach Leumi old age pension had their payments from Social Security reduced under the Windfall Elimination Provision (WEP). This was because Bituach Leumi was considered as an extra pension and counted as a “windfall.” In 2013, Ephraim Greenberg, a U.S. citizen living in Israel, brought a class action to change this situation because Bituach Leumi pensions are not dependent on earnings and therefore don’t fall within the criteria of the WEP.
Now you can claim your money back
In July 2015, U.S. District Judge Rosemary Collyer determined that the Social Security Administration was wrong in reducing payments to U.S. citizens who receive Bituach Leumi. This is because Bituach Leumi payments aren’t considered earnings-based in the same way as a private work-related pension is. Bituach Leumi payments are considered more of a social benefit for the elderly than a “windfall,” and therefore do not affect Social Security payments. (However, if you receive a work-related pension in addition to Bituach Leumi, your work pension would trigger the WEP reduction in Social Security benefits.)
If your Social Security payments were reduced under the previous erroneous application of WEP, you can claim back the funds that are owed to you from September 2004. Furthermore, if someone who was unfairly penalized under the WEP has passed away, his heirs can apply for the funds retroactively. This is good news for the many American olim eligible for Social Security payments.
I discussed the Greenberg Decision with the lawyers involved in the case, Ira Kasdan and Beth Johnson. We discussed the specifics of how to claim money that may be owed to you. To learn the specific steps involved in claiming withheld WEP as well as learning more about the provisions concerning with private pensions, listen to our 15-minute discussion at www.GoldsteinOnGelt.com/Kasdan.
(The opinions expressed on The Goldstein on Gelt Show are those of the guest, and not necessarily my opinion or the opinion of Portfolio Resources Groups, Inc.)
Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.