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US / Japan Social Security |
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Totalization Agreement |
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On February 20, 2004, the governments of
Japan and the United States entered into a Social Security "totalization" agreement.
This agreement expected to start Spring 2005, serves two primary purposes: |
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1 |
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 currrently are
saving about $800 million annually in foreign taxes they do not have
to pay. |
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2 |
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. |
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(Source: US Social Security Online) |
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