Social Security Totalization Agreements

Suppose a worker born on January 2, 1951 applied for old-age benefits in January 2017. The worker worked for 8 years in the United States – from 1980 to 1987 – and earned each year the maximum amount subject to Social Security taxes. The worker has therefore accumulated 32 QCs, which is not enough to qualify alone for old-age benefits covered by the United States. However, this worker also acquired coverage in Switzerland. Since the United States and Switzerland have a tabening agreement and the worker has at least 6 QC, the worker`s Swiss coverage can be credited to entitle him to a totalized benefit. The worker`s U.S. benefit is calculated according to the steps described below. The most notable exception to the territoriality rule is called the posting rule. Under this rule, a worker whose employer requires temporary relocation from one country to another to work for the same company continues to pay social security taxes and retains coverage only in the country from which he or she transferred.1 After almost all aggregation agreements, such a transfer cannot be expected – at the time of transfer, beyond 5 years. This rule ensures that workers who only work temporarily in the other country retain coverage in their home country, which remains the country of their greatest economic link2. By mutual agreement, the two countries can agree to extend the 5-year period for temporary missions abroad on a case-by-case basis, but extensions beyond two additional years are rare.

You can also write to this address if you wish to propose the negotiation of new agreements with certain countries. In drawing up its bargaining plans, the SSA attaches great importance to the interests of workers and employers who will be affected by possible agreements. Since the 1970s, U.S. negotiators have entered into bilateral agreements with 28 major trading partners to coordinate social security and benefit plans for people who live and work in more than one country during their working lives. They are known as “totalization agreements” and resemble operating and structural contracts and are legally classified as agreements between Congress and the executive in accordance with the law. . . .

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