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US not keen on social security pact with India
Ashok Tuteja
Tribune News Service

New Delhi, May 15
Even as India and the US continue to work towards building cooperation in diverse fields, Washington has shown reluctance to enter into a social security arrangement with New Delhi under which temporary Indian workers in the US would not have to pay social security taxes.

Sources in the Overseas Indian Affairs Ministry said the US was hesitant to accept the position that New Delhi has taken in terms of the social security system that operates in India.

India has signed social security agreements with several European countries and was negotiating such accords with several others, including Australia and Britain. “We propose to sign social security agreements with other European countries as also with Australia, which will hopefully put pressure on the US to accept a similar agreement with us,” a senior official said.

Also, the ministries of Finance and Commerce have been approached by the Overseas Indian Affairs Ministry to ensure that while negotiating any agreement with the US, the social security accord must also be put on the front-burner. “So every time there is a joint working group meeting between the Commerce Ministry and the Finance Ministry, this agenda is flagged there because we feel unless this is agreed to we are missing out,’’ the official added.

New Delhi says literally, billion of dollars are getting lost over the years on Indian professionals who work in the US and hopes the two countries would be able to move forward on the proposal in the coming days. A high-level team from the Overseas Indian Affairs Ministry is scheduled to visit the US in June to conduct further negotiations on the agreement with the US Social Security Administration.

The two countries have been negotiating the agreement for nearly four years now but a consensus has eluded them. Once signed, the agreement is expected to benefit hundreds of thousands of Indian H1B workers in the US. The mandatory payment of social security tax has been an issue with them since workers who go back to India after six years of temporary employment in the US either voluntarily or due to lack of sponsorship for permanent residency cannot claim the money they had paid from their earnings. For the permanent residents and citizens, the social security agreement acts something like a social insurance programme at old age.

The US Social Security Administration has a law in place known as ‘Totalisation Agreement’ with about 20 countries, mostly from Europe, on the lines of the social security accord but is somehow not convinced about the utility of such an agreement with India. Under the rule, H-1B workers are exempted from paying social security taxes in the US and can have their deductions sent to their home countries.

India has signed social security agreements with Belgium, France, Germany, Switzerland, Luxembourg, the Netherlands, Hungary and Denmark. Negotiations have been completed with Canada, Czech Republic, Norway and Korea. On the current status of the proposed agreement with Australia where many Indians, particularly students, have been the victims of racial attacks in recent months, the official said the first round of negotiations was held in March-April last year. “We hope to conclude the negotiations by the end of this year so that we can ink the agreement as early as possible.” However, students doing part-time jobs in Australia or Western countries are not covered under the social security accords.