Totalization Agreement with Luxembourg

SSA Publication No. 05-10183, January 2005, ICN 480201 [OMB Approval Number: 0960-0554 Expires 12/31/2016]

Contents

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

 

Introduction

An agreement effective November 1, 1993, between the United States and Luxembourg improves Social Security protection for people who work or have worked in both countries. It helps many people who, without the agreement, would not be eligible for monthly retirement, disability or survivors benefits under the Social Security system 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.

The agreement covers Social Security taxes (including the U.S. Medicare portion) and Social Security retirement, disability and survivors insurance benefits. It doesn’t cover benefits under the U.S. Medicare program or the Supplemental Security Income (SSI) program.

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 Luxembourg 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").
  • When you apply for benefits––You may have some Social Security credits in both the U.S. and Luxembourg 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 people could, under certain circumstances, be required to pay Social Security taxes to both the United States and Luxembourg 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 Luxembourg, you normally will be covered by Luxembourg, and you and your employer pay Social Security taxes only to Luxembourg.

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 Luxembourg 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 Luxembourg.

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

Note
In addition to old-age, retirement, survivors and disability benefits, Luxembourg Social Security taxes cover several other programs including sickness and workers’ compensation insurance as well as family allowances. As a result, workers exempted from Luxembourg Social Security coverage by the agreement pay no Social Security taxes for these programs and generally cannot receive benefits from them. If the agreement exempts you from Luxembourg coverage, you and your employer may wish to arrange for alternative benefit protection.


Summary of agreement rules

The following table shows whether your work is covered under the U.S. or Luxembourg 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 Luxembourg system, you and your employer (if you are an employee) must pay Luxembourg Social Security taxes. "Certificate of coverage" section 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 Luxembourg:

For a U.S. employer who:
  • Sent you to work in Luxembourg for five years or less

U.S.

  • Sent you to work in Luxembourg for more than five years

Luxembourg

  • Hired you in Luxembourg

Luxembourg

For a non-U.S. employer

Luxembourg

For the U.S. government and you are a:

  • U.S. national

U.S. (either Social Security or federal retirement program

  • Luxembourg national
Luxembourg

You are working in the U.S.:

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

Luxembourg

  • 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-Luxembourg employer

U.S.

For the Luxembourg government and you are a:

  • Luxembourg national

Luxembourg

  • U.S. national
U.S.
You are self-employed and you:
  • Reside in the U.S.

U.S.

  • Reside in Luxembourg

Luxembourg

If this table doesn't 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 Luxembourg

Write to the Luxembourg address in "For more information" section for further information.

Note
As the table indicates, a U.S. worker employed in Luxembourg 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, an individual 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 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.

 

Certificates for employees

To establish an exemption from compulsory coverage and taxes under the Luxembourg system, your employer must request a certificate of coverage (form USA/LUX 1) 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.

If preferred, the request may be sent by FAX to (410) 966-1861. Please note this FAX number should only be used to request 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 (including maiden name for married woman);
  • 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 Luxembourg; 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 Luxembourg or if you become an employee of the U.S. company’s affiliate in Luxembourg. If you become an employee of an affiliate, your employer must indicate if the U.S. company has an agreement with the Internal Revenue Service 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 Luxembourg must request a certificate of coverage (form LUX/USA 1) from Luxembourg at this address:

Centre Commun de la Sécurité Sociale
Département affiliation
L-2975 Luxembourg
LUXEMBOURG

The same information required for a certificate of coverage from the United States is needed to get a certificate from Luxembourg except that you must show your maiden name, if you are a married woman, and your Luxembourg Social Security 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 Luxembourg systems, you can establish your exemption from one of the taxes by writing to:

  • if you reside in the United States, the U.S. Social Security Administration at the address in "Certificates for employees" section; or
  • if you reside in Luxembourg, the Centre Commun de la Sécurité Sociale at the address in "Certificates for employees" section.

Be sure to provide the following information in your letter:

  • Full name (including maiden name for married woman);
  • Date and place of birth;
  • Citizenship;
  • Country of permanent residence;
  • U.S. and/or Luxembourg 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 Luxembourg should be retained by the employer in the United States in case of an audit by the Internal Revenue Service (IRS). No copies should be sent to IRS unless specifically requested by IRS. However, a self-employed individual 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 the employer. It will be their responsibility to present the certificate to the Luxembourg 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 (SSA), a certificate of coverage cannot be issued unless a request has been received. The information is needed to enable SSA 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 Luxembourg Social Security systems and briefly describes the eligibility requirements that normally apply for each type of benefit. If you don’t meet the normal requirements for these benefits, the agreement may help you to qualify (see "How benefits can be paid" section).

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. You can get more detailed information about the Luxembourg system by writing to the Luxembourg address in "For more information" section or by visiting the Luxembourg Social Security system website at www.mss.public.lu/.

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 Luxembourg system, credits are measured in months. To simplify the information in the table, requirements are shown in years of credits.

 

Monthly benefits and eligibility requirements

Retirement or old-age benefits
United States Luxembourg
Worker-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).
Worker-Age 65, with at least 10 years of coverage; age 60 with 40 years of coverage including compulsory, voluntary and certain types of noncontributory periods (e.g., periods of education, child-rearing, etc.); or age 57 with 40 years of compulsory coverage.
Disability benefits
United States Luxembourg
Worker-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 needed, depending on age at date of onset.  Some recent work credits also needed unless worker is blind. Worker-Under age 65 can get benefit if unable to work for a prolonged period in last occupation or similar occupation. Twelve months of contributions in the three-year period prior to disability onset needed. If currently working in covered employment, the 12-month requirement is waived if disability is due to work accident or disease.
Family benefits to dependents of retired or disabled people
United States Luxembourg
Spouse-Full benefit at full retirement age or at any age if caring for the 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-No provision.
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-No provision.
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-No provision.

Survivors benefits

United States Luxembourg
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-At any age if not remarried. Generally, must have been married to the worker for at least one year prior to the worker’s death or retirement. Other conditions may apply if worker was already receiving a pension at the time of the marriage. Worker must have 12 months of contributions in the last 36 months prior to death, or have died from a work accident or disease, or have been receiving a retirement or disability benefit.
Divorced widow or widower-Same as widow or widower if marriage lasted at least 10 years. Divorced widow or widower- Same as widow or widower. Benefit amount varies depending on the length of marriage.
Children-Same as for children of retired or disabled worker. Children-Under age 18 (age 27 if a full-time student) or any age if disabled. Worker must have 12 months of contributions in the last 36 months prior to death; or have died from a work accident or disease, or have been receiving a retirement or disability benefit.
Lump-Sum Death Benefit-A one-time payment not to exceed $255 payable on the death of an insured worker. Funeral Grant-A lump-sum is paid by the sickness fund for a pensioner, covered worker or family member.

 

How benefits can be paid

If you have Social Security credits in both the United States and Luxembourg, 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 don’t meet the basic requirements, the agreement may help you qualify for a benefit as explained below.

  • Benefits from the U.S.––If you don’t 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 Luxembourg credits. However, to be eligible to have your Luxembourg 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 Luxembourg credits.
  • Benefits from Luxembourg––Social Security credits from both countries can also be counted, when necessary, to meet the eligibility requirements for Luxembourg benefits. To be eligible to have your U.S. and Luxembourg credits counted, you must have at least 12 months of coverage credited under the Luxembourg system.

 

How credits get counted

You don’t 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 Luxembourg system to help you qualify for a U.S. benefit, we will get a copy of your Luxembourg record directly from Luxembourg when you apply for benefits. If Luxembourg officials need to count your U.S. credits to help you qualify for a Luxembourg benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Luxembourg 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 also can 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 Luxembourg 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 Luxembourg 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 Luxembourg pension may affect your U.S. Benefit

If you qualify for Social Security benefits from both the United States and Luxembourg and you didn’t need the agreement to qualify for either benefit, the amount of your U.S. benefit may 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. 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 Luxembourg allows the Social Security Administration to count your Luxembourg credits to help you qualify for U.S. retirement, disability or survivor benefits, the agreement doesn’t cover Medicare benefits. As a result, we cannot count your credits in Luxembourg 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 Luxembourg 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 Luxembourg benefits at any U.S. Social Security office by completing an application form SSA-2490.

If you live in Luxembourg and wish to apply for U.S. or Luxembourg benefits, contact:

  • the Federal Benefits Unit at the U.S. Embassy in Brussels, Belgium, (phone 32-2-508-2388) to file for U.S. benefits; or
  • any Luxembourg Social Security office to file for Luxembourg benefits.

You can apply with one country and ask to have your application considered as a claim for benefits from the other country. Information from your application will then 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 haven’t applied for benefits before, you may need to provide certain information and documents when you apply. These include the worker’s U.S. and Luxembourg 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 Luxembourg 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 benefit. U.S. payments are made by the U.S. Department of Treasury each month and cover benefits for the preceding month. Payments under the Luxembourg system are made near the end of each month for the next 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 Luxembourg regardless of your nationality. If you are not a U.S. or Luxembourg 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. or Luxembourg Social Security office. The people there can tell you what you need to do to appeal the decision.

The Luxembourg Social Security authorities will review your appeal if it affects your rights under the Luxembourg 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 Luxembourg 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 or call our toll-free number at 1-800-772-1213. 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 Luxembourg’s Social Security programs, visit any Social Security office in Luxembourg. If you don’t live in Luxembourg, write to:

General Inspectorate for Social Security
Rue Zithe, 26
L-2763 Luxembourg
LUXEMBOURG

If you don't 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.