Canadian citizen can qualify for U.S. Social Security

Q: I am a Canadian citizen who once lived in Toronto. I receive a Canadian pension and now live in the U.S. with my wife who is a U.S. citizen and who will receive Social Security from her work in the U.S. I have permanent resident status in the U.S., and I am now working in the U.S. but I don’t have 40 credits (quarters) just yet to collect Social Security. Would my Canadian pension disqualify me from receiving a spousal benefit or pension benefit after I get 40 credits? Lester Christmas, San Jose, Calif.

A:  No, you won’t be disqualified from receiving a spousal benefit or pension benefit after you get 40 credits. “But if the pension is from a spouse vested in the Social Security system in the U.S., there may be some offset depending on the size of the Canadian pension,” says Devin Hyde, a field office service representative for the Social Security Administration (SSA) in Indianapolis. “You would still be eligible if your spouse was fully vested with the 40 quarters in the Social Security system in the U.S.”

In some situations, Hyde says the effect on your Social Security benefit is similar to what happens when a pension is affected by the windfall elimination provision or WEP. That provision may affect you when you earn a pension from an employer that didn't withhold Social Security taxes and you qualify for Social Security retirement or disability benefits from work in other jobs for which you did pay taxes.

According to Hyde, there are several countries with which the U.S. has what’s called a totalization agreement. “This means that we have an agreement in place with the country on how to calculate benefits if the person has paid some into Social Security as well as a pension from their own country,” says Hyde. “If a person is insured for Social Security and also receives a pension from another country, the SSA does a computation based on the gross amount of the foreign pension to determine what would be offset from the Social Security benefit.”

This varies, says Hyde, from country to country as each country with which the U.S. has a totalization agreement was negotiated individually.  “In some cases, the Social Security number holder may not be fully insured with SSA,” says Hyde. “If the Social Security number holder has at least six quarters of coverage in the U.S. but is not insured for regular U.S. benefits, their credits under the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP) can be added to their U.S. coverage to permit the number holder to qualify for U.S. totalization benefits.”

Once you are eligible for Social Security benefits, provide to SSA your pension information along with the normal documentation that Social Security uses to process a retirement claim, says Hyde.

Read also U.S. International Social Security Agreements and Totalization Agreements.

Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Emailrpowell@allthingsretirement.com.