Social Security Agreement In India

“The issue of totalization has also arisen. There was a feeling that Indian pros who spend less than eight years and contribute to social security… really need to get that money back,” Shringla said Tuesday. According to industry estimates, Indian companies, mainly in the information technology sector, lose up to $4 billion a year in U.S. Social Security, which is never reimbursed. The volume of bilateral trade between India and Germany has grown dynamically in recent years. This has led to an increase in trade between professionals from both countries, creating the need to simplify social security rules between the two countries. During this period, India signed and commissioned 18 SSAs with other countries. As a general rule, benefits such as replacement, pension exportability, total benefits and withdrawal of social security benefits are available under this SSA. A totalization agreement, commonly known as the Social Security Agreement, exempts foreign workers with non-permanent visas from social security contributions in the country of employment, where they are not entitled to reimbursement. In accordance with the total benefit clause, the time provided by a worker in the host country must be made to verify the “properness” of the social security benefit in the country of origin and vice versa.

However, payment is limited, on a pro-rata basis, to the length of service in that country. Despite years of negotiations, the United States has not signed the Totalization Agreement, also known as the Social Security Agreement (SSA) with India, to protect the rights of IT and other service workers who share their professional careers between India and the United States. According to Richa Mohanty Rao, partner of the law firm Cyril Amarand Mangaldas, SSAs are akin to double taxation agreements in which workers in the signatory states are not subject to the social security laws of the host state when they contribute in their country of origin. The result is a more equitable treatment of employees and employers on the basis of reciprocity, she added. In addition, in accordance with the pension export capacity clause in their home country or in another country where they are currently located (subject to the SSA concerned), workers can benefit from social security benefits without reducing these benefits, namely:

Comments are closed.