Upon entering into a totalization agreement, the United States and a partner country agree to coordinate social security and performance bonus rules for people who have worked in both countries during their working lives. Totalization agreements have three main objectives. First, double taxation of social security is abolished when a worker and his employer are required to pay social security contributions to two countries with the same income. Second, they help fill the gaps in coverage records for people who have divided their careers between two countries by combining or spending the coverage periods earned in each country. Finally, the totalization agreements allow benefits to be paid in full to residents of both countries. Although these three objectives do not constitute all totalization agreements, they are by far the most visible and have the most impact on businesses and workers. All totalization agreements have certain characteristics, but the complexity and variation of the social security laws of our partner countries make each agreement unique. If you have paid your recent German contribution to a regional pension fund (formerly landesversicherungsanstalt – LVA), the regional pension fund, which is responsible for the Member State or the contracting country, is responsible for you: 12 In the meantime, the United States had also reached an agreement with West Germany, which was also on legal hold until the adoption of the 1977 amendments. If you apply for a pension in one country and you have insurance periods in several Member States or contracting countries, this application is also considered a corresponding pension application in the other country. In other words, all you have to do is make an app. The insurance agency with which you apply informs other foreign insurance agencies and initiates the pension procedure.
If you are entitled to social security benefits from the United States and Germany and do not need the agreement to receive one of the two benefits, the amount of your benefit in the United States may be reduced. This is the result of a provision of U.S. law that can influence how your benefit is determined if you also receive a work-based pension that was not covered by U.S. Social Security. For more information, visit the Windfall Elimination Commission (publication 05-10045). If you are outside the United States, you can write to us in the “More Information” section. Workers, employers and the self-employed may, in certain circumstances, be required, in certain circumstances, to pay social security contributions for the same work, both in the United States and in Germany. You can also write to this address if you want to propose negotiating new agreements with certain countries. In developing its negotiating plans, the SSA attaches considerable importance to the interests of workers and employers who will be affected by potential agreements.
The labour shortage in Europe, just after the Second World War, led to an unprecedented period of labour immigration. As a result, many workers have found themselves in an unusual position to divide their careers between two countries, often with ambiguous rules on tax debt. In many cases, workers and their employers have been forced to pay double taxes on social security in order to avoid gaps in coverage that would otherwise prevent these displaced workers from receiving benefits when they retire. As a result, Western European countries have begun to conclude bilateral agreements that would clarify the tax obligation of social security and protect workers` welfare rights.