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Social Security retirement and dual citizenship

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  • Social Security retirement and dual citizenship

    I am a natural-born US citizen, now retired, drawing Social Security retirement benefits, and living in NZ. Within 2 years I will have been in NZ for 5 years, and will be eligible to apply for NZ citizenship. I have not yet decided that I will or that I will not apply.

    Every year I receive a questionnaire from the Social Security Administration which asks for information updates. Among the questions it asks is: "Have you taken on a new citizenship?" (or words to that effect). My thoughts are that if they ask the question, there must be some reason, and possibly some consequence if I say "yes". Does anyone know if taking on a new citizenship while receiving SS retirement has an impact on those benefits? Will they be stopped? Decreased? Stay the same?

    If no one has an answer, can they point me to a source that might? I am reluctant to just ask the SSA.

  • #2
    There are two reasons why the SSA wants to know if you have other citizenships.

    1) Windfall provision - You may get suddenly an additional retirement benefit from your new citizenship. This may reduce your SSA benefit (depending on Social Security agreements). For example, even if you are entitled for full maximum benefit in both countries, you will most likely not get more than the higher maximum of the two amounts, the rest is "Windfall" - for the US government. So if the maximum benefits in NZ is let's say $1200/month and in the US $1400/month, if you're entitled for all of it under both systems ($2600) Uncle Sam cut his payments to only $200. So you will only get 1200+200 = 1400. The rest (1200) is windfall for uncle Sam ...

    2) Medicare. You may loose US Citizenship (depending on circumstances) and Medicare with it ...
    Last edited by Dago Red; 11th March 2010, 07:33 AM.
    N541OV

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    • #3
      There is no reason to be reluctant to ask. You need a good answer to properly plan.

      As a US citizen, you must report your worldwide income and pay tax appropriately. Failure to disclose a fact that would affect your SS benefit, when detected, would result in demands and adjustments to recover any overpayment.

      Comment


      • #4
        Originally posted by Dago Red View Post
        2) Medicare. You may loose US Citizenship (depending on circumstances) and Medicare with it ...
        He cannot lose US citizenship without a deliberate, formal renunciation to a consular official.
        ------------------------------------
        IMPORTANT NOTE: I am a Volunteer Moderator - one of you. I am not a lawyer. So act accordingly.

        PD: 9/12/2000 (EB3/VA/RIR/Canada)
        I-140 RD: 12/22/2000
        I-140 AD: 7/16/2001
        RD: 8/28/2001
        ND: 10/26/2001
        FP1: 1/31/2002
        RFE: 8/2/2002
        RFE RD: 8/28/2002
        TD: 10/22/2002
        FP2: 6/19/2004
        ID: 07/15/2004
        AD: 07/15/2004
        CO: 08/18/2004
        CR: 08/23/2004
        N-400 RD: 05/21/2009
        FP: 06/13/2009
        CFR: 08/05/2009
        IL: 08/21/09
        ID: 10/7/09
        USC: 10/8/09

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        • #5
          I appreciate the answers received, particularly from dago red.

          I am not eligible for the NZ government pension yet. It takes 10 years of residence to qualify. US Social Security payments are quite a bit larger than the NZ pension and are likely to remain so. When the time comes, I will probably not even apply for the NZ pension. NZ also considers which benefit is larger, and adjusts its pension payments accordingly. So even if I got it, the NZ pension would likely pay $0 since it is much smaller than Social Security.

          Medicare: When one lives outside the US, Medicare benefits do not apply at all, so to say one might lose Medicare is kind of meaningless. Since I live outside the US, I took the option to not subscribe to Medicare at all.

          I file US tax return every year, reporting worldwide income, which for me is pretty much all US-based. I also file NZ tax return every year, also reporting worldwide income. However, NZ gives new immigrants a 4-year exemption from reporting foreign income, and that exemption runs out for me on Oct 1, 2010. So only next year will I feel the bite of NZ taxing US income.

          Based on the answers received, I think I will just ask the SSA.

          Thanks for the answers, guys.
          Last edited by geezer nerd; 12th March 2010, 04:03 AM. Reason: additional info

          Comment


          • #6
            A Question

            Originally posted by TheRealCanadian View Post
            He cannot lose US citizenship without a deliberate, formal renunciation to a consular official.
            I am originally from Canada and have been in the US for 5 years (wife is American citizen)/ I have Permanent Resident status and am working at the present time for 4 years.

            Would I be able to get a pension from Canada as well as the US when I retire?

            Thank You,
            Hey-You

            Comment


            • #7
              Read the SSA website about "totalization".

              Comment


              • #8
                I have a new question here but couldn't find how to start a new title....

                My parents are getting their green cards in a month. They both are over 70 (73-79). They never paid tax in USA. Is there a way that we can apply for social security benefits for them like medicaid and will they be able to receive any retirement money?

                Comment


                • #9
                  ABSOLUTELY NOT. Social Security is EARNED by working in the US. Unless they plan to work for the next 10 years, they will not get any Social Security payments.

                  YOU sponsored them, YOU support them. They may qualify at some time in the future but any benefits are based on HOUSEHOLD income - IE yours. You had to be over the poverty level to sponsor them, so your family would qualify for few- if any benefits.

                  If you could not afford to house, feed, clothe and provide medical care for them, you should have left them in their home country where their countrymen would be responsible for them.

                  If they have any property in their home country, that should be used for their expenses. If they and you cannot afford their upkeep, you cannot expect any inheritance.

                  This is the reason that the sponsorship for parents should be ended. We have enough native born people on the public dole, we don't need to import any - especially ones who will never make a single contribution to the US economy but want to take from hard working individuals.

                  YOUR PARENTS = YOUR MONEY = YOUR PROBLEM

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