Totalization agreements protect the benefit rights of workers who divide their professional careers between the two countries by allowing each country to count, as needed, the social security rights acquired in the other country to constitute benefit rights. Coverage periods are cumulative only for individuals with a specified minimum amount of coverage, but who are not sufficient to meet the normal requirements of the entitlement to the benefit. In the United States, for example, workers, 5 When a person has earned at least 6 QCs but less than 40, the SSAs provide, in determining the entitlement to the benefit, that the SSAs would account for their hours of work in a country that is a partner in the overall agreement. Any foreigner wishing to apply for an exemption from U.S. Social Security and Medicare taxes on the basis of a totalization agreement must obtain an insurance certificate from the social security authority of his country of origin and present such proof of insurance to his employer in the United States, in accordance with procedures 80-56, 84-54 and Ruling 92-9. An alternative procedure is provided in these revenue procedures for a foreigner who is unable to obtain a certificate of coverage from his country of origin. Despite the fact that the agreements aim 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. Like other agreements, the agreement between the United States and Uruguay removes dual social security.
This occurs when a worker from one country in the other country works and applies to the same work under the social security systems of both countries. In the absence of such agreements, the worker, the worker`s employer or both may be required to pay social security contributions simultaneously in both countries in the event of dual coverage. Under the agreement between the United States and Uruguay, a worker seconded by an employer to one country to work in the other for a period of five years or less is covered only by the sending country. The agreement provides for additional rules that remove dual coverage in the United States and Uruguay in other work situations. 2 An exception to this rule is the agreement with Italy, which allows some transferred workers to choose the social security system to which they are subject. No other U.S. totalization agreement contains a similar rule. Since the late 1970s, the United States has established a network of bilateral social security agreements that coordinate the U.S.
social security program with similar programs in other countries. This article provides a brief overview of the agreements and should be of particular interest to multinationals and people who work abroad during their careers.