United States of America Agreement and foreign pension information 106-04035000

In the US, national social security legislation is the responsibility of the federal government.

The Social Security Act generally provides coverage for employed and self-employed persons through the collection of compulsory contributions, which insures the contributor, and their family, against disability and death and provide for income in the form of a pension once the person reaches retirement age.

The collection of contributions and payment of pensions is generally the responsibility of the centralised Social Security Administration.

A supplemental income scheme applies to qualified individuals with low income.

Widow B Pension and Wife Pension were sunsetted in 1995 and, along with Bereavement Allowance, ceased being paid from 2020. See:

• Widow B Pension
• Wife Pension
• Bereavement Allowance

For historical assessments under this Agreement, former Widow B Pension.

The Agreement with the US started on 1 October 2002.

There are no previous versions.

For Australia:

Department of Social Services (DSS)

For US:

Commissioner of Social Security

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For US:

Social Security Administration

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For US:

Department of Veterans' Affairs Regional Office (VARO) in Manila, Philippines

Under the Agreement with the US, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement only (Article 13.2).

To allow the US to provide information in all cases, a statement authorising the US authorities to release information to the department is included in the Interim Claim for claim US pension. See Claim forms and processes.

For information on bulk data exchange and auto-indexation, see International Data Exchange Program and auto-indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to the US:

• AUS187US - Australia/USA Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

Consent Form (USA) - (AUS161)

This form is required for the US to provide information to Australia about a customer who has not used the Agreement:

• AUS161 - Consent Form (USA)

The following information is required from the customer:

• Reference Numbers (CRN and US Social Security Number)
• Signature

The following liaison form is completed by the US and is sent to Centrelink International Services (CIS).

Transmittal/Request/Certification Form - USA/AUS3

This form is used in all communication from the US.

• Section I - Information About the Claim: this section provides details of the claim to which the information in the liaison applies
• Section II - Certification of Data: this section certifies the personal details of the person making the claim
• SUR claims only: details of the deceased contributor are provided
• Section III - Certification of Benefit Data: this section certifies the details of the relevant US payment
• Section IV - Information Provided: this section specifies the US information and other forms or documents that may be sent with the liaison
• Section V - Information Needed: this section specifies the Australian information required by the US
• Section VI - Remarks: free text section
• Signature

Under the Administrative Arrangements, each country will arrange for copies of existing medical information to be sent with claims for invalidity/disability pensions.

Medical examinations may also be undertaken upon request for foreign pension claim purpose, unless acceptable evidence is available that is less than 12 months old. The liaison agency will contact Services Australia and request this be done. There is no provision for reimbursement of costs to either country.

The customer must contact Services Australia if they receive a direct request from the liaison agency to undertake a medical examination. Advise them to undertake Services Australia’s foreign pension medical assessment process. Where the customer has already undertaken a medical examination based on a direct request from the Agreement partner without consulting Services Australia, the customer should contact the liaison agency to discuss any possible reimbursement options.

If a customer is claiming reimbursement of costs based on undertaking a medical examination requested by Services Australia for foreign pension purpose, consider all evidence provided. For example, if incorrect advice was provided to the customer by Services Australia that caused them to seek an independent medical examination which caused the customer to be out of pocket.

See Customer compensation and Act of Grace.

Samples of forms, foreign documents and translations are available through the Residence and International program homepage.

The Agreement with the US includes double coverage provisions. Certificates of coverage are used to confirm exemptions.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in that country
• In Australia - the Australian Taxation Office (ATO) website

See general information on taxation information on taxation, including issuing Australian payment summaries.

Tax treaty

Australia has a double tax agreement with the US, which avoids the need to pay tax in both countries.

Tax deductions from pensions from one country are allowed as a credit against tax payable for residents of the other country.

Tax deduction

US pensions may be taxed at the source.

The gross rate of US pension, before any deduction, is maintained.

US tax year

The US uses the calendar year (1 January - 31 December) as the tax year.

Australia does not have a Reciprocal Health Care Agreement (RHCA) with the US.

See general information on health insurance and Medicare coverage.

Any queries about:

• Health insurance coverage in the other country – tell the customer to contact the health insurance authority in the other country
• Medicare coverage – direct them to Medicare

Although the US does not have an official language, the most common language used is English (specifically, American English), which is the de facto national language.

Date of birth is written Month/Day/Year.

There is a mandatory requirement for the coding of the HOMe address in a certain format to ensure successful delivery of payment to the US.

The HOMe address is recorded in the payment file and if formatted incorrectly may result in the rejection of the customer’s payment.

See United States of America in the Overseas Bank Account Details (OBAD) index.

Address to be used for mail/letter delivery must be coded as a POStal address.

See Updating address details.

Telephone country code is +1.

Street address

Title FirstName Surname [Addressee]

12850 Mulholland Drive NW # 3 [Street number + street name + any directional information (NW, SE, NE, SW) + # apartment/suite/room number]

BEVERLY HILLS CA 90210 [Town/city + state + zip code]

UNITED STATES

Post Office Box address

Title FirstName Surname [Addressee]

PO BOX 101010 [Post Office Box + number]

BEVERLY HILLS CA 90210 [Town/city + state + zip code]

UNITED STATES

Same-sex marriage is legal in all states (but not the territory of American Samoa and some Native American tribal jurisdictions) since June 2015.

For Australia, the Agreement with the US (Article 2.1) covers:

• Age Pension
• Disability Support Pension (DSP)
• Carer Payment (CP)
• Parenting Payment Single (PPS)

Note:

• Only severely disabled DSP customers may be granted under the Agreement outside Australia (Article 2.1(b))
• CP is limited to carer partners of Age/DSP customers only (Article 1.1)
• Only a ‘widowed person’ may be granted PPS under the Agreement. 'Widowed person' means a person (either gender) who stops being a member of a couple because of the death of their partner and who is not currently a member of a couple (Article 1.1)
• While Bereavement Allowance (BVA) cannot be claimed after 20 March 2020, claims lodged prior to this date may still be received. See Bereavement Allowance (BVA)

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in the US can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the US authorities

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140US - Australian Pension Claim – Social Security Agreement between Australia and USA

DSP only:

• AUS142US - Work Capacity - Customer Information
• AUS109 - Treating Doctor's Report, outside Australia
• AUS175 - Medical Assessment Report – Disability Support Pension (Outside Australia)

Note: the US arranges for the AUS175 to be completed on a case-by-case basis

CP only:

• AUS156 - Assessment for Carer Payment
• AUS156a - Health Professional Assessment for Carer Payment

Forms can be lodged at any US social security office.

Under Article 4 of the Administrative Arrangements, the US liaison agency will:

• accept all forms/documents and date stamp the AUS140 form
• verify the customer’s identity and personal details and
• send the form(s) and nay supporting documentation to Services Australia with a liaison from specifying periods of coverage in US and information regarding US pensions

See Exchange of information and liaison forms.

Note: identity documents certified by a US Notary are not acceptable.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident, a resident of the US or another Agreement country that accepts claims for Australian pension under another agreement (Article 8.1(a)), and
• physically present in Australia, the US or that third country (Article 8.1(b))

Claims under the US Agreement

Claims for Australian payment under the US Agreement may be lodged in certain other Australian Agreement countries.

See the Claim lodgement matrix.

Accepting other Agreement claims

The US will not accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

The customer must also satisfy any other rules under the other agreement and other social security law provisions, including portability. For example, DSP can be claimed in a third country but has an ongoing residence requirement. Therefore, if the claimant is:

• living in the other country, DSP cannot be paid
• temporarily in the other country, DSP may generally be paid for the period it is portable under domestic legislation

The normal rules for working out the date a claim is 'made' and the start day apply to claims under the Agreement with the US. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in the US to be used as the date of lodgement in Australia
• the date of lodgement of a claim for US pension to be used as the date of lodgement of the corresponding Australian benefit (FP claim = AU claim) if:
• the customer specifically requests (Article 16.1), or
• the person declares periods of residence in Australia at the time of claiming the US payment (Article 16.2)

Note: the US agreement does not specifically state that the date on which a claim is lodged with the agency of one party shall be considered as the date of lodgement of that document with the agency of the other party. Advice from Department of Social Services (DSS) policy is that the intent is to include the provision, aligning with other agreements, and that the date an Australian claim is lodged in the US is deemed to be the date of lodgement in Australia.

For coding help, see:

• Claims for Australian payments under International Agreements, and
• Start Day (CLK)

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of coverage in the US to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 9.1)
• the total of any non-continuous US periods of coverage to be considered to be continuous to meet any continuous residence requirement to claim an Australian pension (Article 9.2)

Note:

• Overlapping Australian residence and US periods of coverage are only counted once.
• However, as the US may credit a customer with a full quarter of coverage for shorter periods, where a US period of coverage of up to one calendar year coincides with a period of Australian residence, the periods are taken not to coincide (Article 9.3)
• One quarter of US coverage is equivalent to 3 months of Australian residence (Article 7.2)
• Adjoining periods of Australian qualifying residence and US periods of coverage in the US, with a break of up to 3 months in between, can also be considered to be continuous (Policy)

See Resources in International Social Security Agreements for examples of totalisation.

US periods of coverage:

• means a quarter of coverage, that is, a 3 month period during which contributions were paid, or any equivalent period, as defined in the US legislation
• where equivalent periods may include deemed periods, such as for child rearing or military service
• where both actual and deemed periods may be used when totalising for Australian qualification purposes, as long as they are certified and don’t overlap
• must be certified by the US Competent Institution

One quarter of US coverage is equivalent to 3 months of Australian working life residence (WLR) (Article 7.2).

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) in Australia of which 6 months must be continuous (Article 9.4).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is required if the person is an Australian resident at the date of lodgement (Article 9.4).

CP has no qualifying residence periods but does have a Newly Arrived Resident's Waiting Period (NARWP). Beside normal exemptions, a NARWP only applies to a person who has 'entered Australia'. See Newly Arrived Resident's Waiting Period (NARWP) and Qualifying Residence Period.

A person who is resident and present outside Australia has not entered Australia and therefore does not have a NARWP.

To avoid granting CP to a person who has never been to Australia, the Agreement requires a person to have been an Australian resident at some time (Article 8.1).

The Agreement allows the ongoing residence requirement for DSP, PPS and CP to be met by customers who reside in the US (Article 5.1).

For customers outside Australia, the Agreement with the US (Article 10.1) refers to the overall rate calculation contained in section 12(1) of the Social Security (International Agreements) Act 1999.

This means customers paid under the Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied
• additional child amounts (S14a SS(IA) 1999) are included, if eligible
• their US pension proportionalised (Randisi concession) for use in the income test using a denominator of 300 (Article 10.1)

Note:

• In some circumstances, their partner’s WLR may be used. See Working Life Residence (WLR)
• Autonomous customers who are paid a proportional rate and receiving a US pension will have the Randisi concession applied to their US pension (Article 10.2)

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia

Returns to Australia

The proportional rate continues to apply for the first 26 weeks of a temporary return to Australia (Article 10.4).

• For returns to Australia before 9 June 2018, manually code the Temporary Return to Aust Ind on the Residence Savings (RSS) screen.

Customers in Australia under an Agreement are paid a direct deduction rate (Article 10.5).

This Agreement includes a comparison rate in Australia, that is, the higher of direct deduction or proportional rate is paid (Article 10.7).

Departures from Australia

The inside Australia rate continues to be paid for the first 26 weeks of a temporary departure from Australia (Article 10.6).

Payments under the Agreement

Under the Agreement, provided the customer stays qualified, Australian payments are payable indefinitely in both countries, that is, for temporary or permanent absences (Article 5.1).

Third country portability under the Agreement

Portability to third countries for a customer paid under the Agreement is the same as for an autonomous customer leaving Australia (Article 5.2). See Portability of payments.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement
• the customer meets any payment limitations, such as severely disabled, and
• the customer can meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfers to international social security agreements.

A person who has sufficient Australian qualifying residence (or an exemption) can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia.

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks

See Delivery of payments to Centrelink customers outside Australia.

Note: there are mandatory coding requirements for US bank accounts. If the HOMe address format is not correct, the payment will reject. See United States of America in the Overseas Bank Account Details (OBAD) index for mandatory coding instructions.

For the US, the Agreement covers the old age, survivor's and disability insurance under the Social Security Act.

Main payments

• Retirement pension (AGE)
• Disability pension (INV)
• Survivor pension (SUR)

The following known payments are paid by the US authorities but are not covered under the Agreement:

• Non-totalisation benefits:
• Spouse/Divorced Spouse benefits paid to the partner or former partner
• Childs benefits
• Supplemental Security Income (SSI)
• Coronavirus (COVID-19) payments

For help with:

• Assessment of US pensions, see Assessment
• Coding of US pensions, see Eligibility and Coding

The requirement to claim applies to US AGE and INV.

Customers may voluntarily claim SUR.

See Foreign pensions claims.

Eligibility and coding of foreign pensions tab contains detailed information on US payments that are subject to CFP legislation.

Unlike most other Agreement countries, there are no classic claim packs for US payments.

The claim process with the US uses a Request to Claim (RQI) - like the process for non-agreement countries.

This is sent to the US authorities in Manila who then decide which forms are needed and send them direct to the customer.

The RQI are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Specific requirements for US claims

All claims:

• RQI

INV only:

• The US authorities send copies of medical forms that need to be completed
• This is sent after the US Invalidity pension claim has been received by the US authorities
• A range of forms may be required

See Foreign pension medical assessments.

US quarter request

Requests for quarters must be received from Manila.

If a request comes from the Central Fund in Baltimore, forward it to Manila.

Requests for additional information

If information provided with the claim for a US pension is incomplete, the US will send requests for information direct to customers.

Employment periods

Under the Agreement with the USA (Article 1.1(g)), the US may request periods of employment or self-employment in Australia during AWLR.

The Verification of Working life residence and employment in Australia (AUS027US) form is to be sent to the customer requesting verification. See Working Life Residence (WLR).

Under the Administrative Arrangements, US forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• As the US Request to claim (RQI) is an interim claim, it can be scanned

Centrelink International Services (CIS) only:

CIS will complete the following or arrange for the following to be completed as necessary and attach the documents to the foreign pension request to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

All claims:

• AUS187US - Australia/United States of America Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

INV only:

• Relevant form requested by the US
• The US has a suite of disability forms depending on the condition of the claimant.

Enquiries about claims for US payments in the US or a third country should be directed to the US social security authorities.

US payments may be made by direct deposit in Australia.

Any queries about the non-payment of US pension should be directed to the US pension authorities.

Agreement pensions are paid as 12 regular monthly payments. There are no bonus payments.

Other benefits or private pensions are normally paid, monthly or annually.

US pensions must be recorded in the source currency - US dollar (USD). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollars amount.

Note: payments into Australia are made in Australian dollars.

US payments are generally increased for Consumer Price Index (CPI or cost of living) annually in December.

The payment for December is received in January of the following year.

For information on bulk data exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 10.5) and ignored in the income test (Article 8(8)(zc) Social Security Act 1991) for customers paid under the US Agreement who are in Australia
• proportionalised and assessed as ordinary income for customers paid:
• under the US agreement who are outside Australia
• autonomously who are on a long-term outside Australia rate
• ordinary income (not proportionalised) for customers paid:
• autonomously who are inside Australia
• under an agreement other than the US or New Zealand who is inside or outside Australia

See Rate Calculation for when a direct when a direct deduction or proportional rate is applied.

Note: each member of a couple is deemed to receive half of the total amount received by the couple (Article 10.8)

Spouse/Divorced Spouse benefits

Spouse benefits are an entitlement for the partner, or former partner (divorced) of a person who receives Retirement or Disability Pension a payment. The person may receive these payments even if they receive a Retirement or Disability Pension themselves.

Although this payment is not covered under the Agreement, due to the nature of this payment, it is assessed the same as an agreement pension.

No known payments.

The following payments are exempt:

These payments are assessed as exempt income for customers under the Agreement and autonomous:

Coronavirus (COVID-19) payments

The US have paid, and continue to pay, economic stimulus payments in response to the COVID-19 pandemic. These payments are made through the US Treasury or Internal Revenue Service (IRS) and should be clearly identified as ‘Economic Impact Payment’ or similar on any payment advice.

Supplemental Social Income (SSI) payment

A monthly payment for people with disabilities including blindness, and older adults who have little or no income or resources.

This payment is means tested and customers eligible for this payment are obliged to report changes in their income, resources and living arrangement each month to SSA.

SSI payments are assessed as exempt income if customer is outside Australia (Article 10.3) and for the first 26 weeks of a temporary return to Australia.

This payment is generally not paid outside the US. Coding should be reviewed if customer is in Australia.

Child’s benefits

Child’s benefits are an entitlement for the child and are paid to the pension recipient parent. If the child:

• meets the definition of a dependent child Section 8(8)(j) Social Security Act 1991. See Payment for dependent children
• does not meet the dependent child definition or paid directly to the:
• parent - the amount is assessable income against the parent and assessed the same way as the main agreement pension
• child - the amount is assessable income against the child and assessed the same way as the main agreement pension

The Agreement does not include embargo provisions.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable Foreign Payment (CFP) lump sum arrears.

Where an arrears period is not provided, the arrears period end date can be assumed to be the end of the month prior to the date on the notice.

A contravention debt may also occur if the customer does not advise of the grant of their US payment within their notification period. See Foreign pension coding.

The US does not issue Life certificates.

They may issue the Details of Citizenship and Confirmation of details form for continuation of payment on an ad hoc basis.

Customers in Australia are sent notices at grant and will receive an annual statement for tax purposes in US dollars in December each year.