U.s. Totalization Agreements

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Anyone seeking more information about the U.S. Social Security totalization program – including details of some existing agreements – should write: despite the fact that the agreements are intended to allocate social security to the country where the worker is most attached, unusual situations occasionally arise, where strict enforcement of the rules of agreement would result in unusual or unjustified results. For this reason, each agreement contains a provision allowing the authorities of both countries to grant exemptions from the normal rules if both parties agree. An exception could be granted, for example, if the foreign award of a U.S. citizen was unexpectedly extended by a few months beyond the 5-year limit under the self-employed rule. In this case, the worker could benefit from ongoing U.S. coverage for the additional period. Agreements to coordinate social protection across national borders have been commonplace in Western Europe for decades. This is followed by a list of the agreements reached by the United States and the effective date of each. Some of these agreements were then revised; The date indicated is the date on which the original agreement came into force. As U.S. commercial and commercial interests have spread around the world, the list of major trading partners increasingly includes countries that do not have a system that meets all U.S. legal requirements.

This may penalize U.S. companies, workers and potential social security beneficiaries abroad who could benefit from such agreements. Applications should include the name and address of the employer in the United States and the other country, the full name, place and date of birth of the worker, nationality, U.S. and foreign Social Security numbers, location and date of employment, and the start and end date of the assignment abroad. (If the employee works for a foreign subsidiary of the U.S. company, the application should also indicate whether U.S. Social Security Insurance has been agreed upon for employees of the related company pursuant to Section 3121 (l) of the internal income code.) Self-employed workers should indicate their country of residence and the nature of their self-employment. When applying for certificates under the agreements with France and Japan, the employer (or non-employee) must also indicate whether the worker and accompanying family members are covered by health insurance.

The provisions to eliminate dual coverage for workers are similar in all U.S. agreements. Each of them establishes a basic rule regarding the location of the employment of a workforce. Under this basic “territorial rule,” a worker who would otherwise be covered by both the United States and a foreign regime is subject exclusively to the coverage laws of the country in which he or she works. The most notable exception to the territorial rule is called a detached work rule. Under this rule, a worker whose employer requires his temporary relocation from one country to another to work for the same company continues to pay social security contributions and retains insurance coverage exclusively in the country from which he has moved.1 According to almost all totalization agreements, the duration of such a transfer cannot be expected at the time of the transfer. to exceed 5 years. This rule ensures that workers who work only temporarily in the other country continue to work in their home country, which remains the country of their greatest economic link.2 On the other hand, workers who change countries permanently are insured under the country of destination regime.

By mutual agreement, the two countries can agree to extend the five-year period for temporary missions abroad on a case-by-case basis, but extensions beyond two more years are rare.

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