Totalization Agreement Countries

Under certain conditions, a worker may be exempt from coverage in a contracting country, even if he or she has not been transferred directly from the United States. For example, if a U.S. company sends an employee to its New York office to work for 4 years in its Hong Kong office, and then re-opens the employee for an additional 4 years in its London office, the employee may be a member of Social Security under the U.S.U.K. agreement. The rule for the self-employed applies in cases such as this, provided the worker has been seconded from the United States and is under U.S. Social Security for the entire period prior to the transfer to the contracting country. International social security agreements are beneficial for both those who work today and those whose careers are over. For current workers, the agreements eliminate the double contributions they might otherwise make to social security plans in the United States and another country. For people who have worked in the United States and abroad and are now retired, disabled or deceased, agreements often result in the payment of benefits to which the worker or family members would not otherwise be entitled. Anyone seeking more information about the Social Security Totalization Program in the United States – including details of some existing agreements – should write to: Workers who have shared their careers between the United States and a foreign country may not be entitled to pension, survival or disability (pensions) benefits from a country or both because they have not worked long enough or recently to meet minimum requirements. Under an agreement, these workers may benefit from partially U.S. or foreign benefits on the basis of combined or „totalized“ coverage credits from both countries. To date, the United States has entered into totalization agreements with 28 countries; Three other agreements have been signed, but they are not yet in force.

A list of all totalization agreements is listed in Appendix C. The United States determines the totalization benefits that a foreigner can obtain, based on the foreigner`s lifespan in the country and the length of his or her work in his or her home country. The United States has a threshold for the time it takes to work, to obtain comprehensive social security benefits and Medicare. With the countries with which it has a totalization agreement, the United States will rely on the threshold of the foreign period. If the combined amount exceeds the threshold, the United States then makes partial payments to the beneficiaries. [9] Tax conventions and totalization agreements have been saved double from the tax debt can also affect U.S. citizens and residents who are affected by foreign subsidiaries by U.S. companies. This is likely to be the case when a U.S.

company has followed the common practice of entering into an agreement with the Treasury, pursuant to Section 3121 (l) of the Internal Income Code, to provide social security to U.S. citizens and residents employed by the subsidiary. In addition, U.S. citizens and residents who are independent outside the United States are often subject to double social security taxation, as they are covered by the U.S. program, even if they do not have a U.S. business. Totalization agreements, also known as bilateral agreements, eliminate dual social security (a situation that occurs when a person from one country works in another country and has to pay social security contributions to the two countries with the same income). Any totalization agreement contains rules that aim to allocate insurance coverage to a work force in a country where the workforce is more economically related. Agreements generally guarantee that the worker pays social security contributions to only one country, provided that the worker and the employer meet the procedural conditions of the agreement for obtaining an exemption from the other country`s social security contributions.