Article 5 provides that where the laws of either country require residence in that country in order to qualify for or receive social security benefits, a person may also qualify for and receive those benefits while residing in the other country. By virtue of an exchange of diplomatic notes in 1980 and 1981 (see Article 21.6) and SSA's published finding about Iceland's social security system (see 46 Fed. Reg. 26377), the United States currently pays benefits to Icelandic citizens who do not satisfy U.S. residency requirements for benefit payment contained in section 202(t)(1) of the U.S. Act. However, the nonpayment exception is subject to other U.S. payment restrictions based on residency requirements for dependents and survivors; e.g., section 202(t)(11) of the U.S. Act.
Further, both countries intend that, under this Agreement, nationals of either country may qualify for or receive benefits while residing in the other country. Accordingly, under section 233(c)(2) of the U.S. Act, this Agreement will permit the United States to pay dependents and survivors currently subject to such residency requirements as well as certain persons who are third country nationals residing in either country.