Social Security Pact with US on Progress!

The social security systems of India and the United States would soon be linked together which would permit the workers from both the nations to avail benefits. This agreement which has been for quite sometime is about to reach a conclusion. The agreement is expected to be signed by President Obama during his visit to India by the later part of this year. Without this agreement in place, the expatriates from both the nations have to give up contributions if they are not found to be eligible.

Initially, the US government was not very open to this agreement. However, now the nations have reached a consensus to share data which would provide information of workers – Indian and US and their contributions. Meetings have been taking place in this regard. Those pursuing the matter include the Ministry of Commerce, Ministry of Overseas Affairs, the Department of Information Technology (IT) with the US-India Information and Communication Technology. To discuss the issue further, a US delegation is coming to India to settle on the agreement.

Nasscom, the IT lobby group has been at the Prime Minister’s Office lobbying for the totalization agreement to be included in the agenda for discussions during the President’s visit. With the absence of such a deal, it is the Indian software professionals who generally work on short-term visas who tend to lose out.

As per the estimates brought out by the Nasscom, the Indian IT firms and professionals would have to pay beyind $1 billion in the absence of the totalization agreement. This sum has to be paid annually to the US. The amount would be catered to in the form of social security. At the same time, there is no guarantee of a benefit or refund. In order to be eligible for such a refund, the expatriates would have to serve in the US for ten years or 40 quarters. The above clearly means that the lack of such an agreement leads to a good amount of the salaries earned being lost. At the same time, even if the agreement is put into effect, it would not aid in claiming the refunds.

As per a new set of recommendations, the Government of India has asked for exceptions for those working under the L-1 visa since it caters to inter-company transfers. When it comes to the H1-B visas, India has asked for a collection when it comes to the contributions in both the nations. So, an Indian national who has contributed to the social security benefits in the US would qualify to the proportioned benefits as per the total years the contribution has been made. Also, a portability of benefits has been recommended. This means that the benefits would be catered to regardless of the country of residence.

As of now, the totalization agreement is in place with nine other nations such as Germany, Hungary, Denmark, Belgium, Switzerland, France, Luxembourg, Netherlands and Czech Republic.

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