Totalization Agreement with Canada

SSA Publication No. 05-10198, January 2004, ICN 480199 [OMB Approval Number: 0960-0554 Expires 12/31/2016]

Contents

Introduction
Coverage and Social Security taxes
Certificate of coverage
Monthly benefits
A CPP/QPP pension may affect your U.S. benefit
What you need to know about Medicare
Claims for benefits
For more information

Introduction

An agreement effective August 1, 1984, between the United States and Canada improves Social Security protection for people who work or have worked in both countries. It also helps protect the benefit rights of people who have earned Canadian Social Security credits based on residence and/or contributions in Canada.

Because the Canadian Social Security system includes a special pension plan operated in the Province of Quebec, an additional understanding has been concluded with Quebec to extend the agreement to that province—also effective August 1, 1984. Terms of the U.S.-Canadian agreement and U.S.-Quebec understanding are very similar, and except where otherwise noted, references in this document to the U.S.-Canadian agreement also apply to the U.S.-Quebec understanding.

The agreement with Canada helps many people who, without the agreement, would not be eligible for monthly retirement, disability or survivors benefits under the Social Security systems of one or both countries. It also helps people who would otherwise have to pay Social Security taxes to both countries on the same earnings.

For the United States, the agreement covers Social Security taxes (including the U.S. Medicare portion) and Social Security retirement, disability and survivors insurance benefits. It does not cover benefits under the U.S. Medicare program or the Supplemental Security Income program. For Canada, the agreement applies to the Old-Age Security program and the Canada Pension Plan. The understanding with Quebec applies to the Quebec Pension Plan.

This document covers highlights of the agreement and explains how it may help you while you work and when you apply for benefits.

 

The agreement may help you, your family and your employer

  • While you work––If your work is covered by both the U.S. and Canadian Social Security systems, you (and your employer, if you are employed) would normally have to pay Social Security taxes to both countries for the same work. However, the agreement eliminates this double coverage so you pay taxes to only one system (see the section on "Coverage and Social Security taxes" section).
  • When you apply for benefits––You may have some Social Security credits in both the United States and Canada but not have enough to be eligible for benefits in one country or the other. The agreement makes it easier to qualify for benefits by letting you add together your Social Security credits in both countries. For more details, see the section on "Monthly benefits."

Coverage and Social Security taxes

Before the agreement, employees, employers and self-employed persons could, under certain circumstances, be required to pay Social Security taxes to both the United States and Canada for the same work.

Under the agreement, if you work as an employee in the United States, you normally will be covered by the United States, and you and your employer will pay Social Security taxes only to the United States. If you work as an employee in Canada, you normally will be covered by Canada, and you and your employer will pay Social Security taxes (contributions) only to Canada.

On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country. For example, if a U.S. company sends an employee to work for that employer or an affiliate in Canada for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in Canada. Even if your occupation (such as truck driver or professional athlete) requires you to make frequent short trips from one country to the other over a period of more than five years, each trip can be considered separately so that you remain covered only by the country from which you are sent.

If you are self-employed and residing in the United States or Canada, you generally will be covered and taxed only by the country where you reside.

 

Summary of agreement rules

The following table shows whether your work is covered under the U.S. or Canadian Social Security system. If you are covered under U.S. Social Security, you and your employer (if you are an employee) must pay U.S. Social Security taxes. If you are covered under the Canadian system, you and your employer (if you are an employee) must pay Canadian Social Security taxes (contributions). "Certificate of coverage" explains how to get a form from the country where you are covered that will prove you are exempt in the other country.

 

Your work status

Coverage and taxes

You are working in Canada/Quebec:

For a U.S. employer who:

  • Sent you to work in Canada/Quebec for five years or less

U.S.

  • Sent you to work in Canada/Quebec for more than five years

Canada/Quebec

  • Hired you in Canada/Quebec

Canada/Quebec

For a non-U.S. employer

Canada/Quebec

For the U.S. governmen

Write to the U.S. address in "Certificates for employees" section for further information.

You are working in the U.S.:

For an employer in Canada/Quebec who:
  • Sent you to work in the U.S. for five years or less

Canada/Quebec

  • Sent you to work in the U.S. for more than five years

U.S.

  • Hired you in the U.S.

U.S.

For a non-Canadian/Quebec employer

U.S.

For the Canadian/Quebec government

Write to the appropriate Canadian address in "Certificates for employees" section for further information.

You are self-employed and you:

  • Reside in the U.S.

U.S.

  • Reside in Canada/Quebec

Canada/Quebec

If this table does not seem to describe your situation and you are:

  • Working in the U.S.

Write to the U.S. address in "Certificates for employees" section for further information.

  • Working in Canada/Quebec

Write to the appropriate Canadian address in "Certificates for employees" section for further information.

NOTE: As the table indicates, a U.S. worker employed in Canada can be covered by U.S. Social Security only if he or she works for a U.S. employer. A U.S. employer includes a corporation organized under the laws of the United States or any state, a partnership if at least two-thirds of the partners are U.S. residents, a person who is a resident of the U.S. or a trust if all the trustees are U.S. residents. The term also includes a foreign affiliate of a U.S. employer if the U.S. employer has entered into an agreement with the Internal Revenue Service (IRS) under section 3121(l) of the Internal Revenue Code to pay Social Security taxes for U.S. citizens and residents employed by the affiliate.

Certificate of coverage

A certificate of coverage issued by one country serves as proof of exemption from Social Security taxes on the same earnings in the other country. Generally, you will need a certificate only if you will be working in the other country for more than 183 days in a calendar year. If you will be in the other country for 183 days or less, a certificate will not be needed unless the other country requests that you obtain one.

 

Certificates for employees

To establish an exemption from compulsory coverage and taxes under the Canadian system, your employer must request a certificate of coverage (form USA/CAN 101 or USA/ QUE 101) from the U.S. at this address:

Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
U.S.A.

The request may be sent by FAX, if preferred, to (410) 966-1861. Please note this FAX number is only for requesting certificates of coverage.

No special form is required to request a certificate but the request must be in writing and provide the following information:

  • Full name of worker;
  • Date and place of birth;
  • Citizenship;
  • Country of worker’s permanent residence;
  • U.S. Social Security number;
  • Date of hire;
  • Country of hire;
  • Name and address of the employer in the U.S. and Canada; and
  • Date of transfer and anticipated date of return.

In addition, your employer must indicate if you remain an employee of the U.S. company while working in Canada or if you become an employee of the U.S. company’s affiliate in Canada. If you become an employee of an affiliate, your employer must indicate if the U.S. company has an agreement with the IRS under section 3121 (l) of the Internal Revenue Code to pay U.S. Social Security taxes for U.S. citizens and residents employed by the affiliate and, if yes, the effective date of the agreement.

Your employer can also request a certificate of U.S. coverage for you over the Internet using a special online request form available at www.socialsecurity.gov/coc. Only an employer can use the online form to request a certificate of coverage. A self-employed person must submit a request by mail or fax.

To establish your exemption from coverage under the U.S. Social Security system, your employer in Canada must request a certificate of coverage from Canada as follows:

  • If your work will remain covered by the Canada Pension Plan, obtain a certificate (form CPT 56A) from:

    Canada Revenue Agency


    CPP/EI Rulings Section
    333 Laurier Avenue West
    11th Floor
    Ottawa, Ontario K1A 0L9
    CANADA

  • If your work will remain covered by the Quebec Pension Plan, obtain a certificate (form QUE/USA 101) from:

Service des presatations 3
Bureau des ententes de
securite sociale
Régie des rentes du Québec
1055, boulevard René- Lévesque Est, 13e étage
Montréal, Québec H2L 4S5

The same information required for a certificate of coverage from the United States is needed to get a certificate of coverage from Canada or Quebec except that you must show your Canadian social insurance number rather than your U.S. Social Security number.

 

Certificates for self-employed people

If you are self-employed and would normally have to pay Social Security taxes to both the U.S. and Canadian systems, you can establish your exemption from one of the taxes.

Be sure to provide the following information in your letter:

  • Full name;
  • Date and place of birth;
  • Citizenship;
  • Country of permanent residence;
  • U.S. and/or Canadian Social Security number;
  • Nature of self-employment activity;
  • Dates the activity was or will be performed; and
  • Name and address of your trade or business in both countries.

 

Effective date of coverage exemption

The certificate of coverage you receive from one country will show the effective date of your exemption from paying Social Security taxes in the other country. Generally, this will be the date you began working in the other country.

Certificates of coverage issued by either the Department of National Revenue in Ottawa or the Bureau des ententes de sécurité sociale in Montreal should be retained by the employer in the United States in case of an audit by the IRS. No copy should be sent to IRS unless specifically requested by IRS. However, a self-employed person must attach a photocopy of the certificate to his or her income tax return each year as proof of the U.S. exemption.

Copies of certificates of coverage issued by the United States will be provided for both the employee and employer. It will be their responsibility to present the certificate to the Canadian or Quebec authorities when requested to do so. To avoid any difficulties, your employer (or you, if you are self-employed) should request a certificate as early as possible, preferably before your work in the other country begins.

If you or your employer request a certificate of coverage, you should read the Privacy Act and Paperwork Reduction Act Statements below.

 

Authority to collect information for a certificate of coverage

Privacy Act

The Privacy Act requires us to notify you that we are authorized to collect this information by section 233 of the Social Security Act. While it is not mandatory for you to furnish the information to the Social Security Administration, a certificate of coverage cannot be issued unless a request has been received. The information is needed to enable Social Security to determine if work should be covered only under the U.S. Social Security system in accordance with an international agreement. Without the certificate, work may be subject to taxation under both the U.S. and the foreign Social Security systems.

Paperwork Reduction Act Notice

This information collection meets the clearance requirements of 44 U.S.C. section 3507, as amended by section 2 of the Paperwork Reduction Act of 1995. You are not required to answer these questions unless we display a valid Office of Management and Budget (OMB) control number. We estimate that it will take you about 30 minutes to read the instructions, gather the necessary facts, and write down the information to request a certificate of coverage.

Monthly benefits

The following table shows the various types of Social Security benefits payable under the U.S. and Canadian Social Security systems and briefly describes the eligibility requirements for each type of benefit. If you do not meet the requirements for these benefits, the agreement may help you to qualify (see "How benefits can be paid" section).

We should point out that Canada provides old-age, survivors and disability benefits through two different programs. The Old-Age Security (OAS) program pays a flat-rate benefit to people age 65 or older based on periods of residence in Canada. The Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) pay retirement, survivors and disability pensions based on a worker’s earnings and total years of coverage beginning January 1, 1966 (when CPP and QPP started).

This table is only a general guide. You can get more specific information about U.S. benefits here on our web site or at any U.S. Social Security office or by calling our toll-free number at 1-800-772-1213. More detailed information about the Canadian system may be obtained by writing to the appropriate Canadian address in "For more information" section or by visiting the Department of Human Resources Canada or the Régie des rentes de Québec.

Under U.S. Social Security, you may earn up to four credits each year depending on the amount of your covered earnings. For example, in 2005, you get one credit for each $920 of your covered annual earnings up to a maximum of four credits for the year. Under the Canadian system, credits are measured in years. To simplify the information in the table, U.S. requirements are shown in years of credits.

 

Monthly benefits and eligibility requirements

Retirement or old-age benefits
United States Canada
Full benefit at full retirement age, or reduced benefit as early as age 62.  Required work credits range from one and one-half to 10 years (10 years if 62 in 1991 or later).

OAS-An Old-Age Security pension is paid to anyone in Canada who is at least 65 and has been a resident of Canada for at least 10 years after age 18. This benefit is payable outside Canada for only 6 months following the month of departure from Canada unless the person has at least 20 years of Canadian residence after age 18. No work credits are required.


A supplementary benefit called Guaranteed Income Supplement (GIS) is paid to OAS beneficiaries living in Canada who have little or no income beyond the OAS benefit. GIS is payable outside Canada for only 6 months following the month of departure from Canada.

CPP-Worker can get full pension at age 65 or reduced pension as early as age 60. Only one contribution (1 year coverage) required.

QPP-Same as CPP.

Disability benefits
United States Canada
Under full retirement age can get benefit if unable to do any substantial gainful work for at least a year. One and one-half to 10 years credit required depending on age at date of onset. Some recent credits also needed unless worker is blind. OAS-No provision.

CPP-
Worker under 65 must have a physical or mental disability which prevents any substantial gainful work and will be of long and indefinite duration or result in death. Worker must have contributions in four of the last six years.

QPP-
Definition of disability same as CPP. Worker must have contributions in:
  • 1/2 the years in the contributory period with a 2-year minimum; or
  • 5 of the last 10 years in the contributory period; or
  • 2 of the last 3 years in the contributory period, or 2 years if the contributory period is 2 years.
Family benefits to dependents of retired or disabled people
United States

Canada
Spouse-Full benefit at full retirement age or at any age if caring for worker's entitled child under age 16 (or disabled before age 22). Reduced benefit as early as age 62 if not caring for a child. Spouse-

OAS-
An allowance is paid to the spouse or common-law partner (whether of the same or different sex who have lived together for at least one year) of an OAS pensioner when the couple has little or no income. The spouse or common-law partner must be age 60-64 and the OAS beneficiary must also be receiving GIS. The allowance is payable outside Canada for only 6 months following the month of departure from Canada.

CPP-
No provision for benefits. However, under certain conditions, retirement pensions can be shared by married spouses if they are not legally separated.

QPP-
Same as CPP.
Divorced spouse-Full benefit at full retirement age. Reduced benefit as early as age 62. Must be unmarried and have been married to worker for at least 10 years. Divorced spouse-

OAS-
No provision.

CPP-
No provision for benefits. However, total earnings credited to the couple during the marriage (while they lived together) may be split equally upon a divorce or legal annulment which occurred after 1977.

QPP-
No provision for benefits. Provision on earnings splitting similar to CPP.
Children-If unmarried, up to age 18 (age 19 if in an elementary or secondary school full time) or any age if disabled before age 22. Children-

OAS-
No provision.

CPP-
No provision for children of retired worker. Children of disabled worker up to age 18 (or age 25 if in school full time).

QPP-
No provision for children of retired worker. Children of disabled worker up to age 18 (or age 25 if in school full time and worker died or became disabled prior to 1/1/94).
Survivors benefits
United States Canada
Widow or widower-Full benefit at full retirement age or at any age if caring for the deceased's entitled child under age 16 (or disabled before age 22). Reduced benefit as early as age 60 (or age 50 if disabled) if not caring for child. Benefits may be continued if remarriage occurs after age 60 (or age 50 if disabled). Widow or widower-

OAS-
An allowance is payable to widowed spouses or common-law partners (whether of the same or different sex) age 60-64 with little or no income. The common-law partner must have lived with the deceased for at least one year. The allowance is payable outside Canada for only 6 months following the month of departure from Canada.

CPP-
Age 35 or older, or under age 35 if disabled or maintaining dependent child of the deceased spouse or common-law partner (whether of the same or different sex). In addition, a same-sex common-law partner can qualify for benefit only if the worker's death occurred on or after January 1, 1998. The deceased worker must have credits for at least one-third of the years in the contributory period for a minimum of three years up to a maximum of 10 years. Remarriage will not affect entitlement.

QPP-
Same as CPP, except no age requirement.
Divorced widow or widower-Same as widow or widower if marriage lasted at least 10 years. Divorced widow or widower-

OAS-
No provision.

CPP-
No provision.
However, see note under divorced spouse.

QPP-
No provision.
However, see note under divorced spouse.
Surviving children- Same as children of retired or disabled worker. Surviving children-

OAS-No provision.

CPP-
Same as children of disabled worker. Same contributory requirements as for widow/widower.

QPP-
Same as children of disabled worker. Same contributory requirements as for widow/widower.

Lump-sum death benefit-A one-time payment not to exceed $255 payable on the death of an insured worker. Lump-sum death benefit-

OAS-No provision.

CPP-
Same minimum contributory requirements as for other survivor benefits. One-time payment equal to six times the monthly retirement pension of the deceased worker to a maximum of CDN $2,500.

QPP-
Same minimum contributory requirements as for other survivor benefits. One-time payment of CDN $2,500.



How benefits can be paid

If you have Social Security credits in both the United States and Canada, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country’s system, you will get a regular benefit from that country. If you do not meet the basic requirements, the agreement may help you qualify for a benefit as explained below.

  • Benefits from the U.S––If you do not have enough work credits under the U.S. system to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and Canadian (CPP/ QPP) credits. However, to be eligible to have your Canadian credits counted, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the United States cannot count your Canadian credits.
  • Benefits from Canada––Canada provides retirement, survivors and disability benefits through two separate programs.

    1. Old-Age Security (OAS) Program
      To get OAS benefits, you must be 65 or older and must have been a resident of Canada for at least 10 years after age 18 (or 20 years after age 18 to have benefits paid outside Canada).

      Under the agreement, Canada will consider your U.S. Social Security credits earned after 1951 and after age 18, along with periods of residence in Canada after 1951 and after age 18, to meet the OAS residence requirements. However, to be eligible to have your U.S. credits counted, you must have resided in Canada for at least one year after 1951 and after age 18.

    2. Canada Pension Plan and Quebec Pension Plan
      The Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) pay retirement, survivors and disability pensions based on your covered work performed on or after January 1, 1966 (when CPP and QPP started), and the amount of your earnings. The CPP operates throughout Canada, except in the Province of Quebec. Both plans require a minimum amount of work credits to qualify for benefits. People who have contributed to both CPP and QPP receive one benefit based on their total contributions to both plans.

    Under the agreement, U.S. Social Security credits completed after 1965 may be considered along with CPP or QPP work credits, if necessary, to meet the minimum requirements for CPP or QPP disability or survivors benefits. However, to be eligible to have your U.S. credits counted, you must have earned at least one year of credit under the CPP or QPP. It is not necessary to consider U.S. Social Security credits in determining eligibility for CPP or QPP retirement benefits since anyone who has made at least one contribution to either plan can qualify for a retirement benefit at 65 or a reduced retirement benefit as early as 60.

How credits get counted

You do not have to do anything to have your credits in one country counted by the other country. If we need to count your credits under the Canadian system to help you qualify for a U.S. benefit, we will get a copy of your Canadian record directly from Canada when you apply for benefits. If Canadian officials need to count your U.S. credits to help you qualify for a Canadian benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Canadian benefit.

Although each country may count your credits in the other country, your credits are not actually transferred from one country to the other. They remain on your record in the country where you earned them and can also be used to qualify for benefits there.

 

Computation of U.S. benefit Under the agreement

When a U.S. benefit becomes payable as a result of counting both U.S. and Canadian Social Security credits, an initial benefit is determined based on your U.S. earnings as if your entire career had been completed under the U.S. system. This initial benefit is then reduced to reflect the fact that Canadian credits helped to make the benefit payable. The amount of the reduction will depend on the number of U.S. credits: the more U.S. credits, the smaller the reduction; and the fewer U.S. credits, the larger the reduction.

A CPP/QPP pension may affect your U.S. benefit

If you qualify for Social Security benefits from the United States based only on U.S. credits and a CPP/QPP benefit from Canada, the amount of your U.S. benefit will be reduced. This is a result of a provision in U.S. law which can affect the way your benefit is figured if you also receive a pension based on work that was not covered by U.S. Social Security. Receipt of a Canadian Old-Age Security pension, which is based on residence in Canada, will not affect the way your benefit is figured. For more information, call our toll-free number, 1-800-772-1213, and get the publication, Windfall Elimination Provision (Publication No. 05-10045). If you are outside the United States, you may write to us at the address in "For more information" section.

What you need to know about Medicare

 

Medicare is the U.S. national health insurance system for people age 65 or older or who are disabled. Medicare has two parts: hospital insurance (also called "Part A" Medicare) and medical insurance (called "Part B" Medicare). You are eligible for free hospital insurance at age 65 if you have worked long enough under U.S. Social Security to qualify for a retirement benefit. People born in 1929 or later need 40 credits (about 10 years of covered work) to qualify for retirement benefits.

Although the agreement between the United States and Canada and the understanding between the United States and Quebec allows the Social Security Administration to count your CPP or QPP credits to help you qualify for U.S. retirement, disability or survivor benefits, the agreement does not cover Medicare benefits. As a result, we cannot count your credits in Canada or Quebec to establish entitlement to free Medicare hospital insurance.

For more information about Medicare, call our toll-free number, 1-800-772-1213, and ask for the publication, Medicare (Publication No. 05-10043) or visit Medicare’s website at www.medicare.gov.

Claims for benefits

 

If you live in the United States and wish to apply for U.S. or Canadian benefits:

  • Visit or write any U.S. Social Security office; or
  • Phone our toll-free number, 1-800-772-1213, 7 a.m. to 7 p.m. any business day. People who are deaf or hard of hearing may call our toll-free TTY number, 1-800-325-0778.

You can apply for Canadian benefits (OAS, CPP or QPP) at any U.S. Social Security office by completing application form CDN-USA 1 (for OAS and CPP benefits) or QUE/USA-1 (for QPP benefits).

If you live in Canada and wish to apply for U.S. benefits:

If you live in Canada and wish to apply for Canadian or Quebec benefits, contact any Canadian or Quebec Social Security office.

You can apply with one country and ask to have your application considered as a claim for benefits from the other country. In that case, your application will be sent to the other country. Each country will process the claim under its own laws––counting credits from the other country when appropriate––and notify you of its decision.

If you have not applied for benefits before, you may need to provide certain information and documents when you apply. These include the worker’s U.S. and Canadian Social Security numbers, proof of age for all claimants, evidence of the worker’s U.S. earnings in the past 24 months and information about the worker’s coverage under the Canadian system. You may wish to call the Social Security office before you go there to see if any other information is needed.

Payment of benefits

Each country pays its own benefits. U.S. payments are made by the U.S. Department of Treasury each month and cover benefits for the preceding month. Benefits under Canada’s OAS and CPP systems and Quebec’s QPP system are paid near the end of each month and represent payment for that month.

 

Absence from U.S. territory

Normally, people who are not U.S. citizens may receive U.S. Social Security benefits while outside the U.S. only if they meet certain requirements. Under the agreement, however, you may receive benefits as long as you reside in Canada, regardless of your nationality. If you are not a U.S. or Canadian citizen and live in another country, you may not be able to receive benefits. The restrictions on U.S. benefits are explained in the publication, Your Payments While You Are Outside The United States (Publication No. 05-10137).

 

Appeals

If you disagree with the decision made on your claim for benefits under the agreement, contact any U.S. Social Security office or Canadian Social Security office. The people there can tell you what you need to do to appeal the decision.

The appropriate Canadian Social Security authorities (i.e., OAS, CPP or QPP) will review your appeal if it affects your rights under the Canadian system, while U.S. Social Security authorities will review your appeal if it affects your rights under the U.S. system. Since each country’s decisions are made independently of the other, a decision by one country on a particular issue may not always conform with the decision made by the other country on the same issue.

For more information

To file a claim for U.S. or Canadian benefits under the agreement, follow the instructions in "Claims for benefits" section.

To find out more about U.S. Social Security benefits or for information about a claim for benefits, contact any U.S. Social Security office. If you live outside the United States, write to:

Social Security Administration
OIO—Totalization
P.O. Box 17769
Baltimore, Maryland 21235-7769
U.S.A.

For more information about the Old-Age Security program or the Canada Pension Plan, contact any office of the Department of Human Resources Development, Income Security Programs, or write to:

International Operations Directorate
Income Security Programs Branch
Department of Human Resources Development
Ottawa, Ontario
CANADA K1A OL4

For more information on the Quebec Pension Plan, contact any office of the Régie des rentes de Québec or write to:

Régie des rentes de Québec
Case Postale 5200
Québec City, Québec
CANADA G1K 7S9

If you do not wish to file a claim for benefits, but would like more information about the agreement, write to:

Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
U.S.A.

For additional information visit our website: www.socialsecurity.gov/international.