An agreement effective December 1, 2001, between the United States and Chile improves Social Security protection for people who spend part of their working life in both countries. It helps many people who, without the agreement, would not be eligible for monthly Social Security 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.

For the U.S., 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.

Chile has a program of old-age, survivors and disability insurance benefits that is financed by employee contributions and administered by private companies. This program began in 1981. A government-administered Social Security pension system that existed before 1981 continues to cover workers who had contributed to this program and chose to remain in it. The U.S.-Chilean Social Security agreement covers contributions for old-age, survivors and disability insurance under both the old and new systems, as well as contributions for Chile’s national health insurance and worker’s compensation programs. Chilean Social Security benefits covered by the agreement include old-age, survivors and disability benefits under both the old and new systems.

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 employment is covered by both the U.S. and Chilean Social Security systems, you and your employer would normally have to pay Social Security taxes to both countries for the same work. However, the agreement includes rules that eliminate double coverage so you pay taxes to just one country. These rules are explained in Part II, “Coverage and Social Security taxes for employment.” (See Part IV if you are self-employed.).

When you apply for benefits––You may have some Social Security credits in both the United States and Chile but not 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" in Part V.

Part II -- Coverage and Social Security taxes for employment

Before the agreement, employees and employers could, under certain circumstances, be required to pay Social Security taxes to both the United States and Chile 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 Chile, you normally will be covered by Chile and neither you nor your employer will have to pay U.S. Social Security taxes.

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 Chile for no more than five years, the employer and employee will continue to pay only U.S. Social Security taxes and will not have to pay in Chile.

NOTE: In addition to old-age, survivors and disability insurance benefits, Chilean Social Security taxes cover other programs including national health insurance and workers’ compensation insurance. As a result, workers exempted from Chilean 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 Chilean coverage, you and your employer may wish to arrange for alternative benefit protection.

Summary of agreement rules

The following table shows whether your work as an employee is covered under the U.S. or Chilean Social Security system. If you are covered under U.S. Social Security, you and your employer must pay U.S. Social Security taxes. If you are covered under the Chilean system, you and your employer must comply with the Chilean contribution requirements. If you are covered under one country’s program, Part III explains how to get a form from that country that will prove you are exempt in the other country.

Your work status	Coverage and taxes
*You are working in Chile:*
For a U.S. employer who:
Sent you to work in Chile for five years or less	U.S.
Sent you to work in Chile for more than five years	Chile
Hired you in Chile	Chile
For a non-U.S. employer	Chile
For the U.S. government and you are a:
U.S. national	U.S. (either Social Security or federal retirement program)
Chilean national	Chile
*You are working in the U.S.:*
For an employer in Chile who:
Sent you to work in the U.S. for five years or less	Chile
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-Chilean employer	U.S.
For the Chilean government and you are a:
Chilean national	Chile
U.S. national	U.S.
*You are self-employed and you:*
*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 Part III.A below for further information.
Working in Chile	Write to the appropriate Chilean address in Part IX below for further information.

NOTE: As the table indicates, a U.S. worker assigned temporarily to Chile 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.

Part III -- Certificate of coverage for employment

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.

III.A. U.S. certificates

To establish an exemption from compulsory coverage and taxes under the Chilean system, your employer must request a certificate of coverage (form USA/CHI 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 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 (including paternal and maternal surnames);
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 Chile; 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 Chile or if you become an employee of the U.S. company’s affiliate in Chile. 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.

When the Social Security Administration issues a certificate of U.S. coverage, it mails two copies (one for the employer and one for the employee) to the requesting employer. It is the employer’s responsibility to present the certificate to the Chilean authorities when requested to do so.

III.B. Chilean certificates

To establish your exemption from U.S. Social Security taxes during temporary assignments in the United States, your employer in Chile must request a certificate of coverage (form CHI/USA 4) from the pension system to which you pay Chilean Social Security contributions at one of the following addresses:

Old Pension System:
Superintendencia de Seguridad Social
Huérfanos N° 1273, 5° Piso
Santiago
CHILE

New Pension System:
Superintendencia de Administradoras de Fondos
de Pensiones
Huérfanos N° 1273, 13° Piso
Santiago
CHILE

The request should include the same information listed in Part III.A above to get a U.S. certificate except that you must provide both your Chilean Registration Number for Social Insurance and the National Identification Number (RUT).

Certificates of coverage issued by Chile should be retained by the employer in the United States in case of an audit by the Internal Revenue Service (IRS). No copy should be sent to the IRS unless specifically requested by IRS.

Part IV - Coverage and Social Security taxes for self-employment

Under U.S. law, self-employed workers are covered by U.S. Social Security if they are U.S. citizens or U.S. resident aliens. The agreement does not have any effect on the coverage of self-employed U.S. residents—they remain covered by U.S. Social Security. Since self-employment is covered under the Chilean system on a voluntary basis, self-employed U.S. residents (including Chilean citizens) do not need any documentation to show they are exempt from contributions under the Chilean system.

The agreement exempts self-employed U.S. citizens who reside in Chile from U.S. Social Security coverage. As a result, if you are a self-employed U.S. citizen and reside in Chile, you do not have to pay U.S. Social Security taxes on your self-employment income. To document your exemption from the payment of U.S. Social Security self-employment taxes (SECA), you need to get a certificate of coverage from Chile’s Superintendency of Pension Fund Administrators (the new pension system) at the address in Part III.B above.

Be sure to provide the following information in your request:

Full name (including paternal and maternal surnames);
Date and place of birth;
Citizenship;
Country of permanent residence;
U.S. Social Security number, Chilean Registration Number for Social Insurance and the National Identification Number (RUT)--NOTE: If you have not been issued one of these numbers, you may omit it.
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.

You should attach a photocopy of the certificate to your U.S. income tax return each year as proof of the exemption.

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 beginning date of your temporary assignment in the other country, or the beginning date of your self-employment activity there. To avoid any difficulties, your employer (or you if you are self-employed) should request a certificate of coverage 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.

Part V -- Monthly benefits

The following table shows the various types of Social Security benefits payable under the U.S. and Chilean Social Security systems and briefly describes the eligibility requirements for each. If you don’t meet the requirements for these benefits, the agreement may help you to qualify (see Part V.A below).

Chile provides benefits under both the old and new pension systems. Under the old pension system, old-age, survivors and disability insurance benefits are based on a worker’s average earnings and length of coverage. Under the new “privatized” system, employees contribute to individual investment accounts and benefits depend on the investment yield of the accounts. The table shows the requirements for Chilean benefits under both the old and new systems.

This table is only a general guide. You can get more specific information about U.S. benefits here on our web site, at any U.S. Social Security office or by calling our toll-free number at 1-800-772-1213. You may get more detailed information about the Chilean system by writing to the pension system to which you pay Chilean Social Security taxes or by visiting its web site. Postal and web site addresses are shown in Part IX.

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 Chilean 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	Chile
Full benefit at full retirement age. 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).	Under all programs, men must be age 65 and women age 60. New system No minimum contribution periods required. Guaranteed minimum benefit with 20 years of contributions. Early retirement possible if individual account balance is sufficient to fund a specified minimum level of benefit. Old system Salaried employees--Both male and female salaried employees must have 10 years of contributions and must have contributed within two years before reaching retirement age. Wage earners--Male wage earners must have either 20 years of contributions or 800 weeks of contributions including contributions in one-half of all weeks since initial coverage. Female wage earners must have contributed at least 10 years. Public employees and journalists--Both male and female workers must have 10 years of contributions and must be contributing on date of attainment of retirement age.
Disability Benefits
United States	Chile
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 credits also needed unless worker is blind.	New system Must be under normal retirement age and have an impairment which permanently reduces working capacity by at least 50 percent. Must have been contributing at time of disability onset or have had contributions in 6 out of the 12 months immediately preceding disability onset. Old system Salaried employees--Must be under normal retirement age and have an impairment that reduces earnings capacity by 67 percent. Must have a minimum of three years of contributions and must have contributed within two years before disability onset. Wage earners--Must be under normal retirement age and totally or partially disabled. A minimum of 50 weeks of contributions, contributions in 40 percent of the weeks during the 5 years preceding disability onset, and contributions in 50 percent of the weeks since initial coverage. Women are exempt from the third requirement, and all wage earners with more than 400 weeks of contributions are exempt from both the second and third requirements. Public employees and journalists--Must have a disability that prevents performance of usual job, have 10 years of contributions, and be contributing at the date of disability onset.
Family benefits to dependents of retired or disabled people
United States	Chile
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-No provision under either the new or the old system.
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 under either the new or the old system.
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 under either the new or the old system.
Survivors benefits
United States	Chile
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- New system Widow or disabled widower can receive benefits if the worker was paying contributions or receiving an old-age or disability pension at the time of death. Old system Salaried employees--Widow or disabled widower can receive a benefit if the deceased was receiving an old-age or disability pension at the time of death or had a minimum of three years of contributions and contributed within two years before death. Wage earners--Widow or disabled widower can receive a benefit if the deceased was receiving an old-age or disability pension at time of death or met the contribution requirements for a disability pension. Public employees and journalists--Widow or disabled widower can receive a benefit if the deceased had a minimum of three years of contributions, and the death occurred while the deceased was contributing or within two years following the date at which contributions were last made.
Divorced Widow or Widower-Same as widow or widower if marriage lasted at least 10 years.	Divorced Widow or Widower-No provision under either the new or the old system.
Children-Same as children of retired or disabled worker.	Children- New system Unmarried children up to age 18 (age 24 if full-time student) or any age if disabled. Old system Salaried employees--Up to age 18 (age 25 if full-time student) or any age if disabled. Wage earners--Up to age 18 (age 24 if full-time student) or any age if disabled. Public employees and journalists--Up to age 18 (age 25 if full-time student) or any age if disabled.
Lump-Sum Death Benefit-A one-time payment not to exceed $255 payable on the death of an insured worker.	Lump-Sum Death Benefit- New system A one-time payment subject to a monthly-adjusted ceiling payable to surviving spouse, children or parents, or the person or entity covering the funeral costs. If the payment is made to the deceased's estate or a non-related person, maximum benefit is equal to the legal ceiling or actual funeral expenses, whichever is less. Old system All programs--Deceased must have been contributing or receiving a pension at death. One-time payment equal to a maximum of three months' minimum wage. If payment is made to the deceased's estate or a non-related person, maximum benefit is equal to three months' minimum wage or the actual funeral expenses, whichever is less.

V.A. How benefits can be paid

If you have Social Security credits in both the U.S. and Chile, 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.

V.A.1. 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 U.S. based on both U.S. and Chilean credits. However, to be eligible to have your Chilean 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 U.S. cannot count your Chilean credits.

V.A.2. Benefits from Chile

Under Chile’s old Social Security system, credits from both countries can be counted, when necessary, to establish a right to old-age, survivors and disability benefits. Under the new Social Security system, credits from both countries can be counted, when necessary, to meet the coverage requirements for the guaranteed minimum benefit. In addition, the amount of a worker’s U.S. benefit may be counted in determining eligibility for an early old-age pension under the new system.

V.B. 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 Chilean system to help you qualify for a U.S. benefit, we will get a copy of your Chilean record directly from Chile when you apply for benefits. If Chile needs to count your U.S. credits to help you qualify for a Chilean benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Chilean 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.

V.C. Computation of U.S. benefit under the agreement

When a U.S. benefit becomes payable as a result of counting both U.S. and Chilean 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 Chilean 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.

Part VI -- A Chilean pension may affect your U.S. benefit

If you qualify for Social Security benefits from both the U.S. and Chile and you did not 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 Part IX.

Part VII -- 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 Chile allows the Social Security Administration to count your Chilean 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 Chile to establish entitlement to free Medicare hospital insurance.

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

Part VIII --Claims for benefits

If you live in the United States and wish to apply for U.S. or Chilean 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 Chilean benefits at any U.S. Social Security office by completing application form SSA-2490.

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

The U.S. Embassy in Santiago, to file for U.S. benefits; or

Any Chilean Social Security office to file for Chilean benefits.

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. Social Security number, the Chilean Registration Number for Social Insurance and the Chilean National Identification Number (RUT), 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 Chilean system. You may wish to call the Social Security office before you go there to see if any other information is needed.

VIII.A. 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 old Chilean system are made by the Instituto de Normalización Previsional in the middle of each month and cover benefits for the current month. Payments under the new Chilean system are made by one of the Pension Fund Administrators near the end of month and cover benefits for the preceding month.

VIII.B Absence from U.S. territory

Normally, persons 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 Chile regardless of your nationality. If you are not a U.S. or Chilean citizen and live in a country other than the U.S. or Chile, 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 #05-10137).

VIII.C Appeals

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

The Chilean Social Security authorities will review your appeal if it affects your rights under the Chilean 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.

Part IX -- For More Information

To file a claim for U.S. or Chilean benefits under the agreement, follow the instructions in Part VIII.

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 Chile’s Social Security programs, write to: