standard India Us Social Security Agreement

“I told President (US) Trump that the contribution of our Social Security experts should be discussed further as part of a totalization agreement. It will be of mutual interest to both of us,” Narendra Modi told reporters in New Delhi with Trump. According to Richa Mohanty Rao, partner of the law firm Cyril Amarand Mangaldas, SSAs are akin to double taxation agreements in which workers in the signatory states are not subject to the social security laws of the host state when they contribute in their country of origin. The result is a more equitable treatment of employees and employers on the basis of reciprocity, she added. “India is in favour of discussions due to the introduction of new social security systems in the country in recent years and the expansion of coverage, which has led to greater compatibility of the two countries` systems,” a development official told BusinessLine. The provisions to eliminate dual coverage for workers are similar in all U.S. agreements. Each of them establishes a basic rule regarding the location of the employment of a workforce. Under this basic “territorial rule,” a worker who would otherwise be covered by both the United States and a foreign regime is subject exclusively to the coverage laws of the country in which he or she works. To qualify for benefits under the U.S. Social Security program, a worker must have earned enough work credits, known as insurance quarters, to meet the “insurance status requirements” specified. For example, a worker who turns 62 in 1991 or later generally needs 40 calendar terms to be insured for old age pensions.

As part of a totalization agreement, SSA accounts for periods of coverage acquired by the worker under the social security program of a contracting country when a worker has some U.S. insurance coverage but is not sufficient to qualify for benefits. Similarly, a country that is a party to an agreement with the United States takes into account a worker`s coverage under the U.S. program when it is required for that country`s social security benefits. If the combined credits in the two countries allow the worker to meet the eligibility requirements, a partial benefit may be paid depending on the proportion of the worker`s total career in the paying country. International social security agreements are beneficial for both those who work today and those whose careers are over. For current workers, the agreements eliminate the double contributions they might otherwise make to social security plans in the United States and another country.