What complicates matters is that the task of a foreign administrator is to multiply the combinations of countries that do not have agreements. The absence of an agreement can place a significant financial burden on multinational employers, for example when a company sends a foreign trip to the United States in Brazil. Other drawbacks, if there is no agreement, are dual contributions and ineligible benefits – all factors to be taken into account in the development of an international allocation policy. The two objectives of the totalization agreements are achieved in different ways in different agreements and make it essential to understand the concept and specifications of each home host alliance. Many totalization agreements follow the same general pattern of contribution and time. Below is a description of the types of agreements reached by some countries. Each totalization agreement has an exception for international staff. Under this exception, a person temporarily transferred to the service for the same employer in another county is covered only by the national form he or she received. Workers and employers continue to pay contributions to the national social security system. A list of countries with which the United States currently has totalization agreements and copies of these agreements can be accessed under U.S. international social security agreements. For example, U.S. agreements allow the U.S.
Social Security Administration to add U.S. and foreign coverage credits only if the employee earns at least six-quarters of U.S. coverage. (“quarter” refers to work credits, with a credit for 2014 for each gain of $1,200 up to a maximum of four credits per year).) Similarly, a person may need a minimum amount of coverage under the foreign country plan in order to account for U.S. coverage to meet the conditions for foreign benefits. There are many nations around the world – Singapore and South Africa, for example – that do not participate in totalization agreements with other countries. The explanation for this point varies from country to country. The lack of agreement is usually due to one reason among others: although the social security agreements are different depending on the conditions agreed between the two signatory states, their intention is similar. The main objective of such an agreement is to abolish the double social security contributions that apply when a worker from one country works in another country and has to pay social security contributions for the two countries with the same incomes.
If you have any questions about international social security agreements, please contact the Office of International Social Security Programs at 410-965-3322 or 410-965-7306. However, do not call these numbers if you want to inquire about a right to an individual benefit. While these considerations represent a challenge for the employer, it is important to recognize that there are currently a number of multilateral agreements (EU Regulation 883/2004, Iberoamerican Organization Social Security Agreement, etc.) or bilateral totalisation agreements (social security contracts between two countries) to allay concerns about contributions and benefit rights – thus making the employer`s job easier. This article discusses the scope and impact of these agreements in a selection of countries, as well as the potential social security costs associated with seconding a staff member on a temporary international mission.