Social security agreements

Produced by Tolley in association with Jim Yuill at The Yuill Consultancy
Social security agreements

The following Employment Tax guidance note Produced by Tolley in association with Jim Yuill at The Yuill Consultancy provides comprehensive and up to date tax information covering:

  • Social security agreements
  • The purpose of social security agreements
  • The UK / US social security agreement
  • UK to US ― contributions
  • Extensions to a certificate of continuing liability
  • Article 6 ― special circumstances
  • UK to US via third country
  • US to UK ― contributions
  • US to UK via third country
  • IRS section 3121(l) agreement
  • More...

The purpose of social security agreements

Social security agreements exist for three main purposes:

  1. to ensure contributions are not paid twice on the same earnings

  2. to offer some protection to social security benefit entitlements by allowing contributions to be aggregated or treated as having been paid in another country

  3. to ensure contributions are payable somewhere

Agreements can be between two individual countries, such as the bilateral agreement between the UK and the US, or the UK and Turkey, but they can also be agreed by groups of countries. The largest in the latter category is the EU which covers all the Member States plus some EEA countries (see the EU provisions guidance note). The UK also has a collective agreement with Jersey, Guernsey and most of the other smaller Channel Islands. Most countries with developed social security schemes will have a series of agreements.

Some countries, such as the US, have a fairly standard format for their agreements with only minor variations from country to country (see below for more on the UK / US agreement). In more recent years the UK has tried to use a standard format which generally allows a continuing period of five years in the home country social security scheme, but there can still be variations in the agreements.

Following Brexit, an employee who is seconded between the UK and the EEA countries or Switzerland, beginning on or after 1 January 2021, is still likely to be able to elect to stay in their home country’s social security scheme. However, such an election will be subject to a shorter maximum period, typically two years (see ‘Brexit’ below).

The provisions within agreements can differ significantly and it is crucial to consider the separate agreements as the need arises. Using the UK as an example, the following variations may exist:

  1. persons covered ― it could be anyone insured in the signatory countries but it may be restricted to nationals, workers or residents

  2. there is not always

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