Anyone who wishes to obtain more information about the U.S. Social Security Aggregation Program — including details of the specific agreements in place — should write to the following address: If you have Social Security credits in the United States and Canada, you may be eligible for benefits from one or both countries. If you meet all the basic system requirements of a country, you will receive regularly from that country. If you do not meet the basic requirements, the agreement can help you qualify for a benefit as described below. The agreement with Canada helps many people who, without the agreement, would not be entitled to a monthly pension, disability or survivor benefits under the social security plans of one or both countries. It also helps people who would otherwise have to pay social security taxes to both countries with the same income. Under certain conditions, an employee may be exempted from coverage in a contracting country, even if he or she has not been seconded there directly from the United States. For example, if a U.S. company sends an employee from its New York office to work in its Hong Kong office for 4 years and then reassigns the employee to its London office for an additional 4 years, the employee may be exempt from social security coverage between the U.S. and the U.K. Agreement. The posted worker rule applies in cases like this, provided that the employee was initially posted from the United States and remained insured under U.S.
social security for the entire period prior to deployment to the contracting country. In addition, your employer must indicate whether you will remain an employee of the U.S. company while working in Canada or whether you will become an employee of the U.S. company`s subsidiary in Canada. If you become an employee of an affiliate, your employer must indicate whether the U.S. company has entered into an agreement with the IRS pursuant to Section 3121(l) of the Internal Revenue Code to pay U.S. social security taxes to U.S. citizens and residents employed by the subsidiary and, if applicable, the effective date of the agreement.
Although agreements aim to allocate social security coverage to the country where the employee has the most important ties, unusual situations sometimes occur in which strict application of the rules of the agreement would lead to abnormal or unfair results. For this reason, each agreement contains a provision that allows the authorities of both countries to grant exceptions to the normal rules if both parties agree. An exemption could be granted, for example, if the foreign representation of a U.S. citizen was unexpectedly extended by a few months beyond the 5-year limit under the draw rule. In this case, the employee could be granted continuous U.S. coverage for the additional period. In addition to better social security coverage for active workers, international social security agreements help ensure continuity of benefit protection for individuals who have obtained social security credits under the United States system and another country`s system. Prior to the agreement, employees, employers, and the self-employed could, in certain circumstances, be required to pay Social Security taxes for the same work in the United States and Canada. Under the agreement, Canada will consider your U.S. Social Security credits accrued after 1951 and after age 18, as well as periods of residence in Canada after 1951 and after age 18, to meet OAS residency requirements. However, to be eligible for your U.S.
credit count, you must have lived in Canada for at least one year after 1951 and after the age of 18. To be eligible for U.S. benefits. As a social security program, an employee must have acquired sufficient work credits, called coverage quarters, to meet the stated requirements for “insured status.” For example, an employee who, in 1991 or later, needs 62. Years of age, usually 40 calendar quarters of coverage to be provided for pension benefits. If an employee has some U.S. coverage under a tabulation agreement, but is not sufficient to qualify for benefits, SSA counts the coverage periods the employee purchased under a contracted country`s Social Security program. Similarly, a country that is a party to an agreement with the United States will consider an employee`s coverage under the U.S. program if necessary to qualify for that country`s social security benefits. If the combined credits in both countries allow the employee to meet the eligibility criteria, a partial benefit may be paid based on the proportion of the employee`s total career completed in the paying country. Each agreement (with the exception of the agreement with Italy) contains an exception to the territoriality rule, which aims to minimise disruption to the careers of workers whose employers temporarily post them abroad. Under this exemption for “freelancers”, a person who is temporarily transferred to work for the same employer in another country remains insured only in the country from which he or she was posted.
For example, a U.S. citizen or resident who is temporarily transferred by a U.S. employer to work in a contracted country will continue to be covered by the U.S. program and will be exempt from coverage of the host country`s system. Both the employee and the employer only make contributions to the U.S. program. You can also write to this address if you wish to propose the negotiation of new agreements with certain countries. In developing its bargaining plans, the SSA attaches considerable importance to the interests of employees and employers who will be affected by potential agreements. The double tax liability may also affect U.S. citizens and residents who work for foreign subsidiaries of U.S. companies. This will likely be the case if a U.S.
company has followed the common practice of entering into an agreement with the Treasury Department under Section 3121(l) of the Internal Revenue Code to provide social security coverage to U.S. citizens and residents employed by the subsidiary. In addition, U.S. citizens and residents who are self-employed outside the U.S. are often subject to a dual Social Security tax liability because they continue to be covered by the U.S. program even if they are not doing business in the U.S. Since the Canada Social Security Plan includes a special pension plan in the province of Quebec, an additional agreement was reached with Quebec to extend the agreement to that province, also effective August 1, 1984. The terms of the United States-Canada Agreement and the United States-Quebec Agreement are very similar and, unless otherwise stated, references in this document to the Canada-U.S. Agreement also apply to the United States-Quebec Agreement.
The agreement with Italy deviates from other U.S. agreements because it does not contain a rule on foreign workers. As with other agreements, the basic criterion for coverage is the rule of territoriality […].