Do you work in another country right now? Maybe you’ve just taken a new overseas assignment and you’re wondering if you’re eligible (or still eligible) for Social Security disability insurance (SSDI). When companies pay FICA taxes, you are eligible for Social Security Administration (SSA) benefits. It doesn’t matter if you work and earn money outside of the U.S., as long as your company pays these U.S. taxes.
The United States and many other countries have entered into agreements to safeguard employee benefits. These are called totalization agreements, and are in place between the U.S. and foreign countries that have systems similar to our SSA system here in America. Examples are Germany, Canada, the United Kingdom and many other countries.
These agreements ensure that you’re not doubly taxed. Instead you are only taxed once, meaning the agreements ensure you only pay into one system. They determine which system you’re covered under for disability benefits (either the U.S. or the other nation), and they ensure you don’t lose your social security benefits in either country.
The decision about which country’s system you will pay into depends on the country you’re working in and the specifics of their totalization agreement with the U.S. If you are covered under the SSA in the U.S., you will have all the same benefits as a worker in the United States, including disability, retirement and survivors benefits. Of course, you still must meet SSA’s definition of “disabled” in order to qualify. If you are covered under the other country, the benefits you receive are solely determined by that country.
It is a common misconception that you can choose which country’s benefits you want. You cannot. Your coverage totally depends on the totalization agreement that has been established between the United States and the other country.
So what happens if you work in a country without one of these agreements? Unfortunately, you will likely be doubly taxed on your earnings. However, if you or your company has paid FICA taxes, you are covered under SSA programs (even without the agreement in place). If you’ve been given an overseas assignment, talk to your employer first to understand your situation.
Workers who spend part of their career overseas and part of it in the U.S. sometimes find themselves in a situation where they haven’t earned enough SSA credits to qualify for any benefit programs in the U.S. (or the other country for that matter). Most totalization agreements are structured so that your time working in both countries counts toward credits.
The SSA has domestic as well as international offices, and you can file your disability claim at any location. The claim is a U.S. claim and is the same for any country.