Disagreements over the interpretation or application of this agreement will have to end by consultation. Under certain conditions, a worker may be exempt from coverage in a contracting country, even if he or she has not been transferred directly from the United States. For example, if a U.S. company sends an employee to its New York office to work for 4 years in its Hong Kong office, and then re-opens the employee for an additional 4 years in its London office, the employee may be a member of Social Security under the U.S.U.K. agreement. The rule for the self-employed applies in cases such as this, provided the worker has been seconded from the United States and is under U.S. Social Security for the entire period prior to the transfer to the contracting country. In addition to improving the social security of working workers, international social security agreements help ensure continuity of benefit protection for people who have received social security credits under the U.S. system and another country. The agreement with Italy is a departure from other US agreements because it does not regulate the people cashed in.
As in other agreements, the basic criterion of coverage is the territorial rule. However, the coverage of foreign workers is mainly based on the nationality of the worker. If an employed or self-employed U.S. citizen in Italy would be covered by U.S. Social Security without the agreement, he will remain covered by the U.S. program and exempt from Italian coverage and contributions. The agreements also have a positive effect on the profitability and competitive position of companies operating abroad by reducing their business costs abroad. Companies with staff stationed abroad are encouraged to use these agreements to reduce their tax burden. As a precautionary measure, it should be noted that the derogation is relatively rare and is invoked only in mandatory cases.
There are no plans to give workers or employers the freedom to regularly choose coverage that contradicts normal contractual rules. Permission to renew a coverage certificate is set on a case-by-case basis. We can only grant an extension with the mutual agreement of the competent authority in the United States and in certain circumstances. Since the late 1970s, the United States has established a network of bilateral social security agreements that coordinate the U.S. social security program with similar programs in other countries. This article provides a brief overview of the agreements and should be of particular interest to multinationals and people who work abroad during their careers. If you have any questions about international social security agreements, please contact the Office of International Social Security Programs at 410-965-3322 or 410-965-7306. However, do not call these numbers if you want to inquire about a right to an individual benefit.