Additional special provisions generally apply to seafarers, cabin crew, diplomats, government employees and persons whose employers are not directly transferred from one total country to another, but from one country of totalization to a third country before moving on to the other totalization country. If necessary, totality partner countries may also agree on specific exceptions for individual workers or entire workers. However, for the United States to accept a specific exception, two fundamental principles must be respected: the person must be registered in a single country and the person must retain coverage in the country to which he or she will most likely be most economically attached. Examples of frequent coverage situations are available in Appendix A. All of these agreements are based on the concept of shared responsibility. Responsibility-sharing agreements are reciprocal. Under each agreement, partner countries make concessions to their social security qualification rules so that those covered by the agreement have access to payments that they may not be eligible for. The responsibility for social security is thus distributed among the countries in which a person has lived during his or her working years and where the person is able to obtain potential rights. In general, it is possible to access a pension from one country in the second country, although the paying country retains some discretion with regard to the exchange and delivery mechanisms used.
Totaling partner countries also calculate a proportional benefit when a worker`s coverage periods in the United States must be added to their national insurance coverage to determine the partner country`s entitlement to benefits, but methods for calculating theoretical benefits vary widely. However, partner countries use a fairly uniform prorating calculation, slightly different from the U.S. formula: a general misunderstanding about U.S. agreements is that they allow duplication workers or their employers to choose the system to which they will contribute. That is not the case. The agreements also do not change the basic rules for covering the social security legislation of the participating countries, such as those that define covered income or work. They simply free workers from coverage under the system of either country if, if not, their work falls into both regimes. The goal of all U.S. totalization agreements is to eliminate dual social security and taxation, while maintaining coverage for as many workers as possible under the country where they are likely to have the most ties, both at work and after retirement. Any agreement aims to achieve this objective through a series of objective rules. 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. The agreements work by assigning social security and therefore the tax obligation to a single country, as stipulated by the rules of each convention. These rules can vary considerably, but all agreements have some commonalities, such as the allocation of coverage, so that workers pay social security taxes to one or the other country, not both.