Indians in US may get to bring back social security contribution

[OhioChick]

Source: Economic Times of India

20 Jul, 2011

NEW DELHI: India will look to use the US urgency to conclude a bilateral investment treaty to push negotiations on the long-pending totalisation agreement that would exempt Indians working there on short-duration visas from contributing to social security.

"Since US is keen on a B it (bilateral investment treaty) and we have been pushing for a social security agreement for long, it would make sense to link the two and we are exploring such a possibility," an official in the ministry of overseas Indian affairs told ET. Indian workers will save nearly $1 billion every year in the form of social security contributions made by them while working on short-term visas, a study by IT industry body Nasscom estimates.

In contrast, US expatriates contribute just $150 million to the Indian social security system every year, explaining the country's lack of enthusiasm in speeding up negotiations, the official said. Overseas workers need to stay for at least 10 years to qualify for a refund, which means contributions made by workers on short-term visa are a waste.

Once a totalisation agreement is in place, Indians working for less than 10 years in the US will be allowed either exemption or a refund. India conveyed its seriousness on early negotiations during commerce and industry minister Anand Sharma's US visit last month. A team from the US Social Security Administration is likely to visit India soon to take the issue forward.

Read more: http://economictimes.indiatimes.com/news/nri/returning-to-india/indians-in-us-may-get-to-bring-back-social-security-contribution/articleshow/9291675.cms

[Angry Dragon]

1. There is no need for them to be here in the first place

and if they want to take away American jobs then they can pay the SS

[shanti]

3. it's all part of the global plan

n/t

[freshwest]

8. No kidding!

[L0oniX]

2. WTF !!!!!!!!!!!!!!

[blank space]

4. Oh my god -

Already engineering jobs have been totally outsourced to china, construction as well.

Goldman Sachs and JP Morgan are outsourcing their jobs to Singapore.

I have no idea what jobs will be even left in the US, it is being shut down. Just insane.

[No Elephants]

16. No wonder so many in the U.S. pray for the rapture.

j/k

[Lasher]

5. An incredibly bad idea, being pushed by India and their US toadies.

A US/India totalization agreement would lack parity.

[plumbob]

6. Sure would. It also means employers would not have to put in their 7-3/4%

Making those cheap hires even cheaper!! Yeah, way to protect American interests!

Woo-hoo!

NO, wait...

[pampango]

7. U.S. International Social Security (Totalization) Agreements

http://www.ssa.gov/international/agreements_overview.html

International Social Security agreements, often called "Totalization agreements," have two main purposes. First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country.

Agreements to coordinate Social Security protection across national boundaries have been common in Western Europe for decades. Following is a list of the agreements the United States has concluded and the date of the entry into force of each. Some of these agreements were subsequently revised; the date shown is the date the original agreement entered into force.

Country..........Entry into Force
Italy................November 1, 1978
Germany.........December 1, 1979
Switzerland.....November 1, 1980
Belgium..........July 1, 1984
Norway...........July 1, 1984
Canada...........August 1, 1984
UK..................January 1, 1985
Sweden...........January 1, 1987
Spain..............April 1, 1988
France.............July 1, 1988
Portugal..........August 1, 1989
Netherlands....November 1, 1990
Austria............November 1, 1991
Finland............November 1, 1992
Ireland.............September 1, 1993
Luxembourg....November 1, 1993
Greece.............September 1, 1994
South Korea.....April 1, 2001
Chile................December 1, 2001
Australia..........October 1, 2002
Japan...............October 1, 2005
Denmark.........October 1, 2008
Czech Republic.January 1, 2009
Poland.............March 1, 2009

[Lasher]

9. An agreement with India would be more one-sided than any of these existing ones.

Economies in all these nations are more prosperous than that of India. I will use per capita GDP as a rule of thumb for comparison. Of these 24, all are ranked at 56 and above out of 181 nations listed by the International Monetary Fund. The US is 6. India is 130.

And unlike these 24 nations, India does not have a social security system that is comparable to that in the US. There is therefore little potential for parity in a totalization agreement between the US and India.

A US/India totalization agreement would facilitate the transfer of billions of dollars to prop up social programs in India.

[pampango]

11. If you're saying that we should have one set of agreements for poor countries and

another set for rich countries (because the poor tend to take more than they receive?), well we all have an opinion.

BTW, Chile's per capita GDP ($15,002) is similar to that of Mexico ($14,430) and Poland ($18,930) is not far ahead of them. Should be cancel our agreements with Chile and Poland (for being too poor) or consider adding such an agreement with Mexico? If they don't qualify, how about Portugal ($23,223) and the Czech Republic ($24,869)? Do they make the cut?

How poor is too poor to qualify?

[Lasher]

12. I am saying we should have one set of agreements.

And that set should not include any agreements that would drain our own Social Security system like one with India would. The primary purpose of our Social Security system is to benefit Americans, not to prop up India at our expense.

[happyslug]

13. But if you live in India you can receive US Social Security Payments today.

The Social Security Act, forbids payments of Social Security outside the US, BUT if the US has entered into a treaty with a country you are living in, that treaty over rides the Prohibition in the Social Security Act.

The US has entered into Four Different types of Treaties in regard to Payments of Social Security Overseas, India is called a "Class Four" Country.

Details on the four Class of Countries that a SS Recipient can live in and get Social Security:
http://www.ssa.gov/pubs/10137.html#countries

As a "Type Four" Country India has the following Restrictions:

You are a citizen of one of the countries in Country List 4 (which includes India), and the worker on whose record your benefits are based lived in the United States for at least 10 years or earned at least 40 credits under the U.S. Social Security system. If you are receiving benefits as a dependent or survivor, see additional requirements.
http://www.ssa.gov/pubs/10137.html#additional

The Additional requirements, mean the following:
If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the United States. If you are not a U.S. citizen, you must have lived in the United States for at least five years. During those five years, the family relationship on which benefits are based must have existed.

Children may meet this residency requirement on their own or may be considered as meeting the residency requirement if the worker and other parent (if any) meet it. However, children adopted outside the United States will not be paid outside the United States, even if the residency requirement is met.

i.e. A person who worked in the US for 10 years and paid into Social Security can get it as long as he or she is alive and otherwise eligible. The spouse of the worker can collect Social Security if the Spouse lived in the US for at least five years AS A SPOUSE. The children of the worker can get benefits if the child had lived in the US for five years OR both parents had lived in the US for Five years. This applies to Natural Children only, if a child is adopted OUTSIDE the US, this rule does NOT apply.

Given the above, what is this about? It is NOT addressing the problem of a Spouse or child who NEVER lived in the US, even if one parent lived and worked in the US for Ten years. It does NOT address someone who worked in the US for Ten years (the minimum time one has to work to get Social Security UNLESS one is disabled BEFORE one turns 31) and became disabled and had to return to India.

Sounds like an effort to cut Social Security taxes collected on such "temporary workers" and thus cut the cost of using such workers.

[Lasher]

15. I did not know that.

Thanks.

[The Big Vetolski]

10. Now, now, we don't want to do anything to harm those Indian job

creators, do we? :sarcasm:

[Skittles]

14. why are they here???

there's PLENTY of unemployed QUALIFIED Americans

[rohu]

17. unemployed QUALIFIED! huh!

We had many openings in our company in past year which involved doing some work but none of your so called "unemployed QUALIFIED" friends seems to be interested.