Us Brazil Social Security Agreement
Article 7.1 provides that the competent institution of Brazil, in the case of persons who have periods of social security in Brazil and the United States, but who do not have sufficient Brazilian protection to benefit from Brazilian benefits, will add coverage quarters in the United States at the time of Brazilian coverage, in order to determine whether a person meets the minimum coverage requirements of the OASDI benefits provided by Brazilian law. However, if Brazil has an international social security contract with the taxpayer`s country of origin, the rules set out in the treaty may be respected, which may lead to the payment of the social security contribution in a single country or the transformation of the benefits covered by the contract. For Brazilian and U.S. nationals who have worked at both sites, this agreement will help meet the qualification requirements for certain pension, disability and survival benefits (total benefits). In addition, the agreement deals with a possible double taxation of social security for cross-border employment scenarios. This agreement may be amended in the future by endorsements which, after notification of the completion of the necessary internal judicial procedures of each contracting state, will be considered an integral part of this agreement as soon as they enter into force. These agreements can be concluded retroactively if they specify. With the new agreement coming into force in October of this year, workers and their employers will only be covered by a country`s social security rules. Persons temporarily sent between Brazil and the United States may remain in their social security system, provided the terms of the agreement are met, which can also reduce costs. Reducing the possible double taxation of social security Recently, it was announced that the Comprehensive Social Security Agreement (SSTA) between the United States and Brazil will finally come into force on October 1, 2018. It is estimated that approximately 1.3 million Brazilians and 35,000 Americans will benefit from this agreement. For example, the U.S. social security system requires 40-quarters of contributions to qualify for social benefits.
A worker with 20 coverage quarters in the United States and 20-quarters of coverage in Brazil would not have had the coverage period necessary to obtain social security benefits in the United States. Under the agreement, the 20 work credits granted by the worker in Brazil would help to reach the U.S. threshold needed to obtain partial maintenance benefits under the U.S. system. The 20 U.S. work credits would also be taken into account in determining the worker`s right to partial benefits from Brazil. Companies with new or existing expatriates who may be affected by the SSTA will need to file coverage certificates as soon as the U.S. and Brazilian social security authorities begin to accept applications.