International Agreements of the Social Security Administration

This report provides basic information on International Agreements of the Social Security Administration, bilateral agreements that coordinate the United States’ system for retirement, disability, and survivors’ benefits with that of other countries by: (1) eliminating dual Social Security coverage—hence, dual taxation—for multinational corporations and expatriate workers; and (2) filling gaps in benefits protection for individuals who divide their career between the United States and another country.

The report examines the eligibility criteria for receiving benefits and the concept of “totalization,” particularly with regard to the Social Security Totalization Agreement with Mexico proposed under President Bush’s plans for immigration reform.

Workers qualify Social Security benefits by earning a minimum of 40 credits, one credit for each quarter worked within a 35 year span. “Totalization” allows transnational workers to combine coverage credits earned in the United States with credits earned abroad in order to meet eligibility requirements in either country and earn partial benefits based on the number of years worked in the paying country. According to the report, an estimated 50,000 Mexicans would be immediately eligible for benefits under the proposed Social Security Totalization Agreement with Mexico, with costs expected to grow from approximately $80 million in the first year to $650 million by 2050. Although undocumented Mexican workers earn Social Security credits for services performed in the United States, proving contributions to the system poses difficulties for those who have used false identities or false social security numbers. Furthermore, deported beneficiaries may not receive payments until they are lawfully readmitted into the United States.