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February 2004 (Printer Friendly Version)
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  • Since the late 1970’s, the U.S. has established international Social Security agreements that coordinate the U.S. Social Security program with the comparable programs of other countries.

  • These international Social Security agreements are called “totalization agreements” and have two main purposes:

    • Eliminate dual Social Security taxation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. As a result of existing totalization agreements, U.S. workers and employers currently are saving about $800 million annually in foreign taxes they do not have to pay.

    • Help fill gaps in benefit protection for workers who have divided their careers between the U.S. and another country, but who have not worked long enough in one or both countries to qualify for Social Security benefits. With totalization, workers are allowed to combine work credits from both countries to become eligible for benefits. The benefit amount paid is proportional to the amount of credits earned in the paying country.

An agreement with Japan

  • An agreement with Japan would save U.S. workers and their employers about $632 million in Japanese social security and health insurance taxes over the first 5 years of the agreement.

  • An agreement would also fill the gaps in benefit protection for U.S. workers who have worked in both countries, but not long enough in one or both countries to qualify for benefits.

  • Japan is the fourth largest trading partner with the U.S. Agreements are already in effect with Canada, the largest trading partner with the U.S., and 19 other countries.

Costs of an agreement with Japan

  • Social Security actuaries estimate that a totalization agreement with Japan would have a negligible long-range effect on the Trust Funds.

  • Costs to the U.S. Social Security system are estimated to average about $136 million per year over the first five years. These costs are for additional benefits to eligible U.S. and Japanese workers and reduced Social Security tax contributions under the dual taxation exemption.

  • To put this in perspective, in 2002, costs to the U.S. system for the existing agreement with Canada were about $197 million.

Effective date of an agreement with Japan

  • In the United States, once the agreement is signed, the President will submit the agreement to Congress where it must sit in review for 60 session days. If Congress takes no action during this time, the agreement can move forward.

  • In Japan, once the agreement is signed, both chambers of the Japanese Diet must vote to approve the agreement.

Countries already having totalization agreements with the U.S.

  • The United States currently has Social Security agreements with Canada, Chile, South Korea, Australia and most of Western Europe.


    Effective Date 



    Effective Date 


    November 1, 1978



    August 1, 1989


    December 1, 1979



    November 1, 1990


    November 1, 1980



    November 1, 1991


    July 1, 1984



    November 1, 1992


    July 1, 1984



    September 1, 1993


    August 1, 1984



    November 1, 1993

    United Kingdom 

    January 1, 1985



    September 1, 1994


    January 1, 1987


    South Korea 

    April 1, 2001


    April 1, 1988



    December 1, 2001


    July 1, 1988



    October 1, 2002

  • More detailed information about these totalization agreements can be found at
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