(Previously Published as PPS-56)
SSR 81-8: TITLE II: INTERNATIONAL SOCIAL SECURITY (TOTALIZATION) AGREEMENTS -- MISCELLANEOUS PROVISIONS
PURPOSE: To state principles for the negotiation and administration of international Social Security agreements. These principles cover general provisions.
CITATIONS (AUTHORITY): Section 233 of the Social Security Act; Title 20 of the Code of Federal Regulations, sections 404.1901-404.1930.
PERTINENT HISTORY: Section 317 of the Social Security Amendments of 1977 (Public Law 95-216) added section 233 to the Social Security Act. It authorizes the President to enter into bilateral agreements with other countries to provide for coordination between the social security systems of the U.S. and those countries. The pertinent history of this provision was previously published in Program Policy Statement (PPS) No. 51.
ISSUES AND OPTIONS: The basic policies relating to totalization agreements were published in PPS-51 and later as a ruling (SSR 80-15). This PPS addresses a number of issues that are not specifically addressed by PPS-51. These issues are noted below:
- 1. Transitionally Insured Benefits
- Section 227 of the Social Security Act provides for special insured status requirements, known as transitional insured status, for people who attain age 72 before 1969. Under this provision, a worker can be considered insured with less than 6 quarters of coverage. However, section 233(c)(1)(A) provides that a worker must have at least 6 quarters of coverage under the U.S. system before such coverage can be combined with coverage in a foreign country in order to establish entitlement to benefits. As a result totalization agreements cannot be used to establish entitlement to benefits under the transitional insured status provisions.
- 2. Special Age 72 Benefits
- Under section 228 of the Social Security Act, a person who is not insured for benefits may receive special benefits at age 72 if the person reached age 72 before 1968 or has at least 3 quarters of coverage for each calendar year elapsing after 1966 and before the year he or she became age 72. These special benefits (called "Prouty" benefits) are provided for elderly U.S. residents who had little or no chance to become insured under the Social Security Act. International agreements negotiated with Italy, the Federal Republic of Germany, and Switzerland are not applicable to these benefits. Future international agreements will also contain a provision exempting these benefits from the scope of the agreement.
- 3. Determining Quarters of Coverage
- Section 213(c) provides for a method of determining quarters of coverage known as the simplified method. However, this method is applicable only when determining if a person is fully insured. Consequently, the simplified method cannot be used for determining if an individual has the 6 quarters required before U.S. coverage could be combined with foreign coverage, nor can it be used for determining the number of U.S. and foreign quarters for purposes of prorating the benefit, nor can it be used for determining quarters to be certified to a foreign country. Actual quarters earned must be used in these instances.
- 4. Awarding Benefits Under More Than One Agreement
- As PPS-51 states, an individual may be awarded benefits under only one agreement at a time. Where eligibility under more than one agreement is possible, benefits will generally be awarded under the agreement affording the most favorable treatment. As the U.S. enters into agreements with more countries, the possibility of this occurring will increase. If an individual has potential eligibility under more than one agreement at the time the initial application is filed, it will be a simple matter to choose the agreement which is most favorable. There may be situations, though, where an individual becomes eligible for benefits under a particular agreement subsequent to establishing entitlement under another agreement.
- If benefits under the subsequent agreement are higher, the individual may be granted up to 12 months retroactivity on the basis of the subsequent application, subject to the rules governing the retroactivity of title II applications, the other entitlement conditions being met, and the effective date of the agreement. If benefits under the subsequent agreement are smaller, those benefits would generally not be awarded as they would be less favorable. The individual may, however, have a compelling reason for wishing to receive the smaller benefit. In such cases, benefits can be determined to be more favorable only beginning with the month the application for benefits under the subsequent agreement is filed. In effect, no retroactivity will be granted where higher benefits under a different agreement have already been paid.
- 5. Subsequent Fully Insured Status
- There may be situations where an individual who is entitled to a totalized benefit continues to work and acquire coverage under title II. It would be possible for such an individual to subsequently become insured for a benefit without the foreign earnings. However, depending upon the amount of foreign coverage and earnings, the non-totalized benefit could be less than the totalized benefit. Since paying the non-totalized benefit in these circumstances would generally be unfavorable to the individual, we will generally pay the higher benefit, unless otherwise provided for by an agreement.
POLICY STATEMENT: Coverage under the U.S. Social Security system and coverage under a foreign social security system may not be combined for purposes of determining eligibility for benefits under sections 227 and 228 of the Social Security Act.
The simplified method of determining quarters of coverage as described in section 213(c) of the Social Security Act may not be used to determine if a person has the 6 U.S. quarters of coverage required before the U.S. coverage can be combined with foreign coverage, nor can it be used to determine quarters of coverage for purposes of determining the prorata benefit, nor can it be used for purposes of determining quarters of coverage to be certified to a foreign country. It can be used only for determining fully insured status.
If a person applies for higher benefits under one agreement subsequent to receiving benefits under a different agreement, the later application may be afforded up to 12 months retroactivity, subject to the rules governing the retroactivity of title II applications and all conditions of eligibility and the effective date of the agreement being met. If, under the agreement, the benefit for which the individual applies later is smaller, receipt of the smaller benefit for any month prior to the month of the subsequent application will generally be determined to be unfavorable to the person, and no benefit may be paid for such months.
If a person who is entitled to a benefit based on combined U.S. and foreign coverage subsequently acquires sufficient U.S. coverage to be entitled to a benefit based on U.S. coverage alone, the higher benefit will generally be paid, unless otherwise provided for by an agreement.
EFFECTIVE DATE: These policies are effective July 23, 1979, to coincide with the effective date of PPS-51.
CROSS-REFERENCES: Claims Manual chapter 3700, PPS- 51, Title II: International Social Security ("Totalization") Agreement, (SSR 80-15).