Totalization Agreement

Both the Social Security Agreement and the Administrative Agreement between the United States and Hungary (Tabulating Agreement) were signed on 3 February 2015 and entered into force on 1 September 2016. The full text of the main agreement and the administrative agreement is available here. The aggregation agreement covers several aspects of social security and benefits in both countries. If you live abroad, you may have heard of agreements between the United States and your other countries known as the totalization agreement. Perhaps you have also heard that they are called social security agreements. For U.S. expats who live and work abroad, it is very important to know if the U.S. has a tabling agreement with your host country and the details of such an agreement. To qualify for benefits under the U.S. Social Security program, an employee must have acquired sufficient work credits, known as quarters of coverage, to meet certain “insured status requirements.” For example, a worker who reaches age 62 in 1991 or later typically needs 40 calendar quarters to be insured for old-age benefits. Under a tabling agreement, when a worker has U.S.

coverage but not enough to qualify for benefits, SSA counts the periods of insurance the worker earned under a contracting country`s social security program. Similarly, a country that is a party to an agreement with the United States will consider a worker`s coverage under the U.S. program when necessary to qualify for that country`s social security benefits. If the combined credits in both countries allow the worker to meet the eligibility conditions, then a partial benefit may be paid depending on the share of the worker`s total career completed in the paying country. Agreements to coordinate social security across national borders have been commonplace in Western Europe for decades. Below is a list of agreements entered into by the United States and the date of entry into force of each agreement. Some of these agreements were subsequently revised; the date indicated is the date of entry into force of the original agreement. 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. .