Worked In Other Countries? Be Sure To Translate Your Documents To Get All The Benefits Owed To You.
We’re blogged about legal translation of foreign language contracts and the importance of immigration document translation services from foreign languages to English for immigration to the U.S. For those who are employed by a United States company but work in that company’s foreign office, a curious problem arises. That problem is one of dual coverage. That means that you and your employer likely pay taxes into the U.S. Social Security system and also into the foreign country’s equivalent of Social Security for the same work. The same issue comes up if a person spends part of their career working in the U.S., and a part of their career in a foreign country. Again, that person has likely paid into two different social security systems.
The question of who would pay your social security benefits when you reach retirement age, and whether you get credit for paying into both systems, is addressed by what are called International Social Security agreements, or “totalization agreements.”
This article is geared towards expatriates working abroad, or immigrants working in the U.S., who may benefit from a totalization agreement. It is also a reminder that high-quality legal translation services will make the totalization agreement process much smoother.
What is a Totalization Agreement?
Beginning in the late 1970s, the U.S. fostered a network of bilateral Social Security agreements, which coordinate how the U.S. Social Security system and similar systems in other countries may work together for expatriates and immigrants. These “totalization agreements” are separate agreements the U.S. has with each foreign country. Currently, the U.S. has agreements with 26 countries: Italy, Germany, Switzerland, Belgium, Norway, Canada, United Kingdom, Sweden, Spain, France, Portugal, Netherlands, Austria, Finland, Ireland, Luxembourg, Greece, South Korea, Chile, Australia, Japan, Denmark, Czech Republic, Poland, Slovak Republic, Hungary.
Totalization agreements are meant to address two basic situations. First, they avoid dual taxation when a worker from one country works in another country and must pay social security taxes in both countries for the same work. Second, they assist in filling any gaps when a worker has divided his or her careers between the U.S. and another country.
With regard to the first situation, dual social security tax liability is a major issue for U.S. multinational companies and their employees. That is because the U.S. Social Security system covers expatriates working for U.S. employers in foreign countries. Thus, both the companies and the employees pay social security taxes to both the U.S. and the foreign country. A totalization agreement, however, eliminates the dual coverage, and maintains coverage only in the country where the employee likely has the greatest attachment.
With regard to the second situation, a totalization agreement will provide that only one of the two countries in which a person has worked will provide social security benefits when the time comes to receive benefits.
To clarify by way of example, assume that you worked for nine years in the U.S. and for four years in Germany, and now you reside in the U.S. at retirement age. In the U.S., you receive Social Security benefits at retirement if you have worked in the U.S. for ten years. In Germany, the requirement is five years.
Without a totalization agreement, you may not be eligible for any benefits even though you paid into two different social security systems for 13 years. With a totalization agreement, however, you can apply the four years of work in Germany to your U.S. requirement. Thus, you can receive Social Security benefits in the U.S. because the agreement gives you credit for the social security payments you made in Germany.
How Do You Take Advantage of a Totalization Agreement?
When you are eligible to receive benefits in the U.S., you need to go to your local Social Security office and ask to fill out a totalization application. You need to show the office that you have worked in other countries with which the U.S. has a totalization agreement. It is important to have as much information about your work abroad as possible because the application asks a number of specifics about your work.
After you have submitted your application under a totalization agreement in the U.S., the information will be passed on to the other country (or countries). In turn, the foreign country, or countries, will reach out to you to determine your eligibility. Significantly, the U.S. government does not take on the full responsibility of benefits if you have worked in other countries. Rather, each country pays its own liabilities. Accordingly, you may find that you receive payments from each country in which you worked.
Key Tip for Totalization Applications – Translate, Translate, Translate
While your local Social Security office may give you some guidance on the totalization application, there are a number of supporting documents you need to provide in connection with your application. Depending on your work history the supporting documentation could be quite involved.
In order to make your application move as quickly as possible in the foreign countries in which you worked, you would be wise to have your documents translated. Particularly if you have a large amount of supporting documentation, but even in cases where there are not that many extra documents, translating them into the native language of the foreign country will have immeasurable benefits to getting your application processed smoothly.
The easiest, most cost effective, way to have documents translated (saving yourself a lot of hassle even if you do speak the foreign country’s language) is to use the services of a trusted, professional translation service. At All Language Alliance, Inc. we not only translate legal papers, but also can handle any type of document in myriad languages and even provide an Apostille service and notary certified Apostille translations.
To make sure you collect Social Security benefits that are rightfully yours, be sure to keep totalization agreements in mind.