Bilateral Social Security Agreement Countries

Suppose a worker born on January 2, 1951 applied for an old-age pension in January 2017. The worker worked in the United States for 8 years – from 1980 to 1987 – and earned the maximum amount of taxes subject to Social Security each year. As a result, the worker has accumulated 32 QCs, which is not enough to qualify for a superannuation only with U.S. coverage. However, this worker also covered in Switzerland. Since the United States and Switzerland have a totalization agreement and the worker has at least 6 QCs, it can be attributed to the worker`s Swiss coverage that he or she can benefit from a fully beneficiary benefit. The U.S. worker`s benefit is calculated in the steps described below. Although the agreements with Belgium, France, Germany, Italy and Japan do not use the rule of residence as the main determinant of self-employment coverage, each of them contains a provision guaranteeing that workers are insured and taxed in a single country. For more information on these agreements, click here on our website or in writing to the Social Security Administration (SSA) under the Conclusion section, below. 10 Although most agreements remove payment restrictions applicable to all residents of both countries, agreements with Austria, Belgium, Denmark, Germany, Sweden and Switzerland remove payment restrictions only for nationals of both countries or stateless persons and refugees residing in both countries. The agreements allow sSA to add U.S. and foreign coverage credits only if the worker has at least six-quarters of U.S.

coverage. Similarly, a person may need a minimum amount of coverage under the foreign system to have U.S. coverage accounted for in order to meet the conditions for granting foreign benefits. Any agreement (with the exception of the agreement with Italy) provides an exception to the territorial rule, which aims to minimize disruptions in the career of workers whose employers temporarily send abroad. Under this exception for “self-employed workers,” a person temporarily transferred to work for the same employer in another country is covered only by the country from which he or she was seconded. A U.S. citizen or resident, for example, who is temporarily transferred by a U.S. employer to work in a contract country, remains covered by the U.S. program and is exempt from host country coverage. The worker and employer only pay contributions to the U.S.

program. Under these agreements, Australia equates social security periods/stays in these countries with periods of Australian residence in order to meet minimum qualification periods for Australian pensions. In other countries, periods of Australian working life are generally counted as social security periods to meet their minimum payment periods. Typically, each country pays a partial pension to a person who has lived in both countries. To qualify for benefits under the U.S. Social Security program, a worker must have earned enough work credits, known as insurance quarters, to meet the “insurance status requirements” specified. For example, a worker who turns 62 in 1991 or later generally needs 40 calendar terms to be insured for old age pensions. As part of a totalization agreement, SSA accounts for periods of coverage acquired by the worker under the social security program of a contracting country when a worker has some U.S. insurance coverage but is not sufficient to qualify for benefits.

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