Social Security Agreements (SSA)

Social Security Agreements (SSA) are bilateral agreements between countries that are designed to protect the interests of cross-border workers. In an increasingly globalised world, SSAs are very important to safeguard the interests of workers. This is an important topic for UPSC international relations and social issues segments.

What is a Social Security Agreement?

A social security agreement or SSA is an agreement between two countries that provides for the protection of the interests of cross-border workers. Basically, the SSA avoids ‘double coverage’ and treats the workers of both the host country and the home country equally especially in terms of social security.

Generally, three types of benefits are accorded under an SSA. They are:

1. Detachment: This implies the elimination of dual contribution, that is, employees moving for employment to any country with which there is an SSA are exempt from making social security contributions in the host country for a specified period (specific to each SSA), provided they continue to make social security contributions in their home countries. This benefit can be achieved if the employee submits a ‘Certificate of Coverage’ (CoC) from the home social security authorities with the host country social security authorities.
2. Exportability: This is the exportability of pension clause under which an employee can choose to receive social security benefits in their host country or their home country without any reduction in the benefits. This allows employees who have been receiving social security benefits in their host country to export the benefits to their home country or to their beneficiaries on retirement or the completion of their work in the host country.
3. Totalisation: Under totalisation of benefits clause, the period of service rendered by an employee in a foreign country is counted for deciding the eligibility for benefits, but the quantum of payment is limited to the length of service, on a pro-rata basis.

Benefits of Social Security Agreements

In addition to providing better social security coverage for active workers, international social security agreements help assure continuity of benefit protection for persons who have acquired social security credits under one country’s system. With globalisation, people are increasingly moving on to other countries for employment. Such agreements assure that retirement benefits are not lost for people who divide their service time between countries.

Until 2008, foreign workers in India were not covered under the Provident Fund (PF) scheme since PF contributions were not mandatory where the employees’ pay exceeded the wage ceiling. But, Indian expatriates outside the had to contribute to the social security scheme of the respective country. And, these contributions were largely lost due to the short length of service overseas or out of failure to fulfill the minimum qualifying period of contribution or residence.

In order to cancel the undue advantage foreign nationals had while exercising employment in India, and to create a level playing field for Indians working outside India, the government of India in 2008 introduced special provisions in the Provident Fund and Pension Scheme, to define a new category of workers termed ‘International Worker’ (IW).

IW covers foreign nationals working in an establishment in India which is mandatorily required to contribute to the PF. As a result, every eligible IW was obliged to be enrolled in the schemes with effect from 1 November 2008. This enabled India to bring to the table other countries which had a significant inbound population into India, to negotiate SSAs with such countries.

Has India signed social security agreements with other countries?

India has signed social security agreements with 19 countries.

The first SSA India signed was with Belgium in 2006. It became operational in 2009.

The following image gives the countries with which India has signed SSAs and the dates on which they became operational.

Image source: labour.gov.in

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