U.s. New Zealand Totalization Agreement

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. These guides provide additional fees for how you receive benefits or pensions from New Zealand if you have lived in countries with special social security agreements or agreements with New Zealand. Please note the second protocol of the 1982 agreement. Workers exempt from U.S. or foreign social security contributions under an agreement must document their exemption by obtaining a country coverage certificate that continues to cover it. For example, an American worker temporarily posted to the UK would need a SSA-issued coverage certificate to prove his exemption from UK social security contributions. Conversely, a UK-based employee working temporarily in the Us would need a certificate from the British authorities to prove the exemption from the US Social Security Tax. One of the general beliefs about the U.S.

agreements is that they allow dual-coverage workers or their employers to choose the system to which they will contribute. That is not the case. The agreements also do not change the basic rules for covering the social security legislation of the participating countries, such as those that define covered income or work. They simply free workers from coverage under the system of either country if, if not, their work falls into both regimes. International social security agreements, often referred to as “totalization agreements,” have two main objectives. First, they remove the double taxation of social security, the situation that occurs when a worker from one country works in another country and is required to pay social security taxes to the two countries with the same incomes. Second, the agreements help fill gaps in benefit protection for workers who have shared their careers between the United States and another country. New Zealand has bilateral social security agreements with several countries. Each agreement allows New Zealanders access to certain benefits or pensions in the event of a move to these countries and allows similar rights for people moving from those countries to New Zealand. 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 withholding rate for non-residents is 15% and could be reduced as a result of the agreement between these countries on double taxation. As a general rule, individuals should only take action on totalization benefits under an agreement when they are willing to apply for a pension, survival or disability.