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International Programs Home | ![]() Totalization Agreement with Australia |
(Based on SSA Publication #05-10176, ICN 469044)
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0960-0554 Expires 12/31/10 |
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Table of contents |
Part I -- Introduction
Part II -- Eliminating dual coverage for employmentPart III -- Certificate of coverage for employment
Part IV -- Eliminating dual coverage for self-employmentPart V -- Effective date of coverage exemptionPart VI -- Monthly benefits
Part VII -- An Australian pension may affect your U.S. benefitPart VIII -- What you need to know about MedicarePart IX -- Claims for benefits
Part X -- For more information |
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Part I -- Introduction |
An agreement effective October 1, 2002, between the United States and Australia 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 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 contributions to both countries on the same earnings. For the United States, the agreement covers Social Security contributions (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. For Australia, the agreement covers "Superannuation Guarantee" (SG) contributions that employers must make to retirement plans for their employees. (Australia's Social Security program, which is separate from the SG program, is supported by general tax revenues not covered by the agreement.) Australian Social Security benefits covered by the agreement include the Social Security age pension, disability support pension for the severely disabled, pensions payable to widowed persons and carer payment. This document covers highlights of the agreement and explains how it
may help you while you work and when you apply
for benefits.
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The agreement may help you , your family and your employer |
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Part II -- Eliminating dual coverage for employment |
Before the agreement, employers could, under certain circumstances, be required to pay both United States Social Security contributions and Australian SG contributions 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 contributions to the United States and no SG contributions will be required. If you work as an employee in Australia, you normally will be covered by Australia and your employer will pay only Australian SG contributions and neither you nor your employer will have to pay U.S. Social Security. 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, a U.S. citizen sent by a U.S. company to work for that company or an affiliate in Australia for no more than five years will continue to pay U.S. Social Security while working there. The U.S. employer will also pay to U.S. Social Security (the employer's share), but will be exempt from Australian SG contributions.
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Summary of agreement rules |
The table below shows whether your work as an employee is covered under U.S. Social Security or the Australian SG program. If you are covered under U.S. Social Security, you and your employer must pay U.S. Social Security contributions. If you are covered under the Australian SG program, your employer must comply with the SG contribution requirements. If you are covered under one country's program, Part III below explains how to get a form from that country that will prove you are exempt in the other country.
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NOTE: As the table indicates, a U.S. worker assigned temporarily to Australia 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.
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Part III -- Certificate of coverage for employment |
A certificate of coverage issued by one country serves as proof of exemption from Social Security or SG contributions on the same earnings in the other country.
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III.A. U.S. certificates |
To establish an exemption from Australian Superannuation Guarantee (SG) contributions, your employer must request a certificate of coverage (form USA/AUS 1) from the U.S. at this address: Social Security AdministrationOffice 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;-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 Australia; 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 Australia or if you become an employee of the U.S. company’s affiliate in Australia. 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. 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. The employer should retain a copy of the certificate and present it to the Australian authorities only when requested to do so. |
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III.B. Australian certificates |
To establish your exemption from U.S. Social Security contributions during temporary assignments in the United States, your employer in Australia must request a certificate of coverage (form AUS/USA 1) from the Australian Taxation Office. This can only be done over the Internet using a special online request form available at www.ato.gov.au/super. Certificates of coverage issued by Australia should be retained by the employer in the United States in case of an audit by the IRS. No copy should be sent to the IRS unless specifically requested by the IRS.
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Part IV--Eliminating dual coverage 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 doesn’t have any effect on the coverage of self-employed U.S. residents--they remain covered by U.S. Social Security. Since self-employment is not covered under Australia's SG program, self-employed U.S. residents (including Australian citizens) don’t need any documentation to show they are exempt from SG contributions. The agreement exempts self-employed U.S. citizens who reside in Australia from U.S. Social Security coverage. As a result, if you are a self-employed U.S. citizen and reside in Australia, you don’t have to pay U.S. Social Security contributions on your self-employment income. To document the exemption from the payment of U.S. Social Security self-employment contributions (SECA), you must get a letter of exemption from the U.S. Social Security Administration by writing to the address in Part III.A. Be sure to provide the following information in your letter: -Full name;-Date and place of birth; -Citizenship; -Country of permanent residence; -U.S. Social Security number; -Nature of self-employment activity; -Date the activity began; and -Name and address of your trade or business. You should attach a photocopy of the exemption letter to the Schedule SE you file with your U.S. income tax return each year as proof of the U.S. exemption. |
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Part V -- Effective date of coverage exemption |
The certificate of coverage or letter of exemption you receive will show the effective date of your exemption from paying U.S. Social Security contributions or your employer's exemption from paying Australian Superannuation Guarantee (SG) contributions. 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, but no earlier than the effective date of the agreement. To avoid any difficulties, your employer (or you if you are self-employed) should request a certificate or exemption letter as early as possible, preferably before your work in the other country begins. If you or your employer request a certificate of coverage or exemption letter, you should read the Privacy Act and Paperwork Reduction Act Statements below. |
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Part VI -- Monthly benefits |
The following table shows the various types of benefits payable under the U.S. and Australian 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 Part VI.A below).
To simplify the information in the table, U.S. work credit requirements and Australian residence requirements are shown in years. 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 can get more detailed information about the Australian system by writing to the Australian address in Part X of this document or by visiting the web site of "Centrelink," Australia's social security agency, or by calling Centrelink toll-free at 1-866-343-3086. NOTE: Since the benefit provisions of the agreement don't apply to Australia's Superannuation Guarantee (SG) legislation, benefits arising from SG contributions are not included in the table. |
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Monthly benefitsand eligibility requirements |
*Normally, a person must be resident and physically present in Australia to file a valid claim for Australian Social Security benefits. Benefit amounts are generally reduced if income or resources exceed specified levels. |
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VI.A. How benefits can be paid |
If you have Social Security work credits in the U.S. and periods of residence in Australia, 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. |
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VI.A.1. Benefitsfrom 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 Australian credits. Australian credits for this purpose include your periods of residence in Australia between age 16 and retirement age during which you were covered under the SG program or you were employed or self-employed. To be eligible to have your Australian credits counted, however, 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 Australian credits. |
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VI.A.2. Benefitsfrom Australia |
As noted in the table, you must normally be resident and physically present in Australia to file a valid claim for Australian benefits. But the agreement lets you file a claim from the U.S. and certain other countries that have agreements with Australia. Social Security credits from both countries can also be counted, when necessary, to meet the eligibility requirements for Australian benefits. Unless you are in Australia, you must have at least 12 months of residence in Australia--at least six months of which must have been continuous--to be eligible to have your U.S. and Australian credits added together. |
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VI.B. How creditsget counted |
If we need to count your credits under the Australian system to help you qualify for a U.S. benefit, we will get the necessary information directly from Australia when you apply for benefits. However, you will need to provide evidence of the periods when you worked in Australia or were covered by Australia's SG legislation. The Australian authorities will provide us with a certification of the periods they can verify. If Australian authorities need to count your U.S. credits to help you qualify for an Australian benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Australian benefit. |
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VI.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 Australian 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 Australian 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. |
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VI.D. Computation of Australian benefit under the agreement |
If you are outside Australia and your Australian benefit becomes payable as a result of the agreement, your benefit may be reduced (i.e., paid at a proportional rate) if you have less than 25 years of Australian working life residence. Remember that an Australian benefit may also be reduced if you have income or assets that exceed the amounts specified in Australian law. | |||||||||||||||||||||||||||||||||||||||
Part VII -- An Australian pension may affect your U.S. benefit |
If you have earned enough work credits in the U.S. to qualify for a regular Social Security benefit and you also qualify for an employer-provided pension from Australia, including a pension that your employer is required to provide under Australia's SG program, 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. Receipt of an Australian Social Security pension, which is based on residence in Australia rather than work, will not affect the way your benefit is figured. For more information, call our toll-free number, 1-800-772-1213, and ask for the factsheet, Windfall Elimination Provision (Publication No. 05-10045). If you are outside the United States, you may write to us at the address in Part X. |
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Part VIII -- 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 Australia allows the Social Security Administration to count your Australian credits to help you qualify for U.S. retirement, disability or survivor benefits, the agreement does not cover Medicare benefits. As a result, we cannot count your credits in Australia 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 booklet, Medicare (Publication No. 05-10043) or visit Medicare’s website at www.medicare.gov.
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Part IX --Claims for benefits |
If you live in the United States and wish to apply for U.S. or Australian benefits:
You can apply for Australian benefits at any U.S. Social Security office by completing application form AUS/USA 4 and form Mod (i). If you live in Australia and wish to apply for U.S. or Australian benefits, contact
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 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, proof of age for all claimants, evidence of the worker’s U.S. earnings in the past 24 months, and information about periods of residence and work in Australia. You may wish to call the Social Security office before you go there to see if any other information is needed. |
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IX.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 Australian system are made by Centrelink. If you live in Australia, payments are made every two weeks for the previous two weeks. If you live outside Australia, payments are made every four weeks for the previous four weeks. |
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IX.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 Australia regardless of your nationality. If you are not a U.S. citizen and live in a country other than the U.S. or Australia, 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). |
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IX.C Appeals |
If you disagree with the decision made on your claim for benefits under the agreement, contact any U.S. Social Security office or Australian Centrelink office. The people there can tell you what you need to do to appeal the decision. The Australian Social Security authorities will review your appeal if it affects your rights under the Australian 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. |
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Part X -- For more information |
To file a claim for U.S. or Australian benefits under the agreement, follow the instructions in Part IX. 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:
For more information about Australia's Social Security programs: - If you live in Australia, contact your nearest Centrelink office or call Centrelink toll free at 131673; - If you live outside Australia and want information about benefits, write to:
- If you live in the United States, you may call Centrelink toll free at 1-866-343-3086 or e-mail Centrelink at international.services@centrelink.gov.au. - If you need information about paying Superannuation Guarantee (SG) contributions, contact the Australian Taxation Office. If you do not wish to file a claim for benefits, but would like more information about the agreement, write to:
For more information about Australia's Social Security agreements and other useful information about Social Security in Australia, go to www.facs.gov.au. |
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Last reviewed or modified Tuesday Sep 09, 2008 |