Article 3.2 provides that where the laws of either country require that a person be resident or present in that country in order to qualify for or receive social security benefits, the person may also qualify for or receive those benefits during periods of residence in the other country. See Article 21.1 with respect to the payment of benefits to U.S. and Portuguese nationals located in third countries.
Since U.S. law already permits payment of benefits to U.S. and Portuguese nationals who reside in either country, the primary elect of Article 3.2 on U.S. law is to permit the United States to pay certain third country nationals who would otherwise be subject to the alien nonpayment provisions of section 202(t) of the Social Security Act during periods of residence in Portugal.
In addition to the portability guarantee provided for Portuguese residents in Article 3.2, the entry into force of the agreement will also liberalize a restriction on exportation of U.S. dependents and survivors benefits that now applies to Portuguese citizens and residents. Under U.S. law, social security dependents and survivors benefits may not be paid to aliens who first become eligible for benefits after 1984 and who are outside the United States for more than 6 months unless they satisfy certain U.S. residency requirements or they are citizens or residents of a country with which the United States has an international social security agreement in force. Once this Agreement enters into force, citizens and residents of Portugal will no longer be subject to this nonpayment provision.