Order Code RL32004
Social Security Benefits for Noncitizens:
Current Policy and Legislation
Updated June 25, 2007
Dawn Nuschler and Alison Siskin
Specialists in Social Legislation
Domestic Social Policy Division

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Social Security Benefits for Noncitizens:
Current Policy and Legislation
Summary
Concerns about the number of unauthorized (illegal) aliens residing in the
United States and the totalization agreement with Mexico have fostered considerable
interest in the eligibility of noncitizens for U.S. Social Security benefits. The Social
Security program provides monthly cash benefits to qualified retired and disabled
workers, their dependents, and survivors. Generally, a worker must have 10 years of
Social Security-covered employment to be eligible for retirement benefits (less time
is required for disability and survivor benefits). Most U.S. jobs are covered under
Social Security. Noncitizens who work in Social Security-covered employment must
pay Social Security payroll taxes, including those who are in the United States
working temporarily or without authorization. There are some exceptions. Generally,
the work of aliens who are citizens of a country with which the United States has a
“totalization agreement,” coordinating the payment of Social Security taxes and
benefits for workers who divide their careers between two countries, is not covered
if they work in the U.S. for less than five years. Also, by statute, the work of aliens
under certain visa categories is not covered by Social Security.
The Social Security Protection Act of 2004 (P.L. 108-203) requires an alien
whose application for benefits is based on a Social Security number (SSN) assigned
January 1, 2004, or later to have work authorization at the time an SSN is assigned,
or at some later time, to gain insured status under the Social Security program.
Aliens whose applications are based on SSNs assigned before January 1, 2004, may
count all covered earnings toward insured status, regardless of work authorization.
The Social Security Act also prohibits the payment of benefits to aliens in the United
States who are not “lawfully present”; however, under certain circumstances, alien
workers and dependents/survivors may receive benefits while residing outside the
United States (including benefits based on unauthorized work). S. 1639 would
restrict earnings credits based on work performed without authorization in 2004 or
later, with respect to individuals who are assigned an SSN in 2004 or later.
In June 2004, the United States and Mexico signed a totalization agreement. In
early 2007, a copy of the agreement was made publicly available, but it has not been
transmitted to Congress for review. The agreement has not been finalized. Currently,
since Mexico meets the “social insurance country” definition, a Mexican worker may
receive U.S. Social Security benefits outside the United States. Family members of
the Mexican worker must have lived in the United States for at least five years to
receive benefits in Mexico. The agreement does not waive the requirements that
aliens in the United States must be lawfully present to receive benefits in the United
States, and that aliens must have work authorization at some time to gain insured
status, but would allow payment of benefits to alien dependents and survivors who
have never lived in the United States. The Social Security Administration reports that
the projected cost of the agreement would average $105 million annually over the
first five years, but the Government Accountability Office reported that “the cost of
[the] totalization agreement ... is highly uncertain” due to the large number of
unauthorized aliens from Mexico estimated to be living in the United States. This
report will be updated as legislative activity occurs or other events warrant.

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Contents
Current Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Social Security-Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Social Security Payment Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Social Security Protection Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . 3
Special Payment Rules for Noncitizens . . . . . . . . . . . . . . . . . . . . . . . . . 6
Legislative History of Payment Rules for Noncitizens . . . . . . . . . . . . . 9
Tax Treatment of Social Security Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 10
Totalization Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Perceived Disparate Treatment Under Social Security and
Immigration Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Totalization Agreement with Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
General Accounting Office Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SSA Comment on the GAO Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
No-Match Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Proposed No-Match Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Legislation in the 110th Congress Related to No-Match Letters . . . . . 23
Legislation in the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
H.R. 190: Social Security for Americans Only Act of 2007 . . . . . . . . . . . . 24
H.R. 332 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
S.Amdt. 152 to H.R. 2 (Fair Minimum Wage Act of 2007) . . . . . . . . . . . . 25
H.R. 709: Total Overhaul of Totalization Agreements Law of 2007 . . . . . 26
Social Security Provisions in the Comprehensive Immigration Reform
Bills in the Senate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
S. 1639 and S.Amdt. 1415 to the Comprehensive Immigration
Reform Act of 2007 (S.Amdt. 1150 to S. 1348) . . . . . . . . . . . . . 26
S.Amdt. 1195 to the Comprehensive Immigration Reform
Act of 2007 (S.Amdt. 1150 to S. 1348) . . . . . . . . . . . . . . . . . . . . 27
S.Amdt. 1847 to S. 1639 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Appendix A: Exception Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Social Insurance or Pension System Countries . . . . . . . . . . . . . . . . . . . . . . 29
Treaty Obligation Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Totalization Agreement Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Appendix B: Definition of “Lawfully Present” . . . . . . . . . . . . . . . . . . . . . . . . . 31

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List of Tables
Table 1. Exceptions to the Alien Nonpayment Provision for Workers
and Dependents/Survivors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 2. Additional Residency Requirement for Alien Dependents/Survivors
Outside the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 3. Exceptions to the Additional Residency Requirement for
Alien Dependents/Survivors Outside the United States . . . . . . . . . . . . . . . . 8

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Social Security Benefits for Noncitizens:
Current Policy and Legislation
Current Policy
Background
The Social Security program provides monthly cash benefits to retired and
disabled workers and their dependents, and to the survivors of deceased workers.1
To qualify for benefits, workers (whether citizens or noncitizens)2 must work in
Social Security-covered jobs for a specified period of time, among other
requirements. Generally, workers need 40 credits (sometimes referred to as
“quarters of coverage”) to become “insured” for benefits (fewer credits are needed
for disability and survivor benefits, depending on the worker’s age). In 2007, a
worker earns one credit for each $1,000 in earnings, up to a maximum of 4 credits
for the year (i.e., with annual earnings of $4,000 or more).
Social Security-Covered Employment
The Social Security program is financed primarily by mandatory payroll taxes
levied on wages and self-employment income. Most jobs in the United States are
covered under Social Security (about 96% of the work force is required to pay Social
Security payroll taxes). In 2007, Social Security-covered workers and their
employers each pay 6.2% of earnings up to $97,500 (this amount is adjusted annually
according to wage growth). The self-employed pay 12.4% on net self-employment
income up to $97,500 and may deduct one-half of payroll taxes from federal income
taxes. The following workers are exempt from Social Security payroll taxes:
! State and local government workers who participate in alternative
retirement systems,
! Election workers who earn less than $1,300 per year,
! Ministers who elect not to be covered, and members of certain
religious sects,
1 The Social Security program is administered by the Social Security Administration (SSA).
SSA also administers the Supplemental Security Income (SSI) program, a means-tested
entitlement program. Eligibility requirements for noncitizens differ under Social Security
and SSI. For more information on noncitizen eligibility for SSI, see CRS Report RL33809,
Noncitizen Eligibility for Federal Public Assistance: Policy Overview and Trends, by Ruth
Ellen Wasem.
2 An alien is “any person not a citizen or national of the United States” and is synonymous
with noncitizen. Aliens/Noncitizens includes those who are legally present and those who
are in violation of the Immigration and Nationality Act (INA).

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CRS-2
! Federal workers hired before 1984,
! College students who work at their academic institutions,
! Household workers who earn less than $1,500 per year, or for those
under age 18, for whom household work is not their principal
occupation, and
! Self-employed workers who have annual net earnings below $400.
In 2006, an estimated 13.9 million noncitizens were in the U.S. labor force
comprising approximately 9.2% of the labor force.3 Aliens who work in Social
Security-covered employment must pay Social Security payroll taxes, including those
who are in the United States working temporarily and those who may be working in
the United States without authorization.4 There are some exceptions. Generally, the
work of aliens who are citizens of a country with which the United States has a
“totalization agreement” (see below) is not covered by Social Security if they work
in the United States for less than five years. In addition, by statute, the work of aliens
under certain visa categories (such as H-2A agricultural workers, F and M students)5
is not covered by Social Security.
Currently, there are no official published data on the amount of money paid into
the Social Security system by aliens, either legal or unauthorized. It is important to
note that an alien may be authorized to be in the United States, but not authorized to
work. Therefore, an alien who does not have work authorization is not necessarily
an illegal alien.6 The Social Security Administration (SSA) maintains an “earnings
suspense file” that represents an estimated $520 billion in wages that cannot be
posted to individual work records because the names and Social Security numbers
(SSNs) on wage reports submitted by employers to SSA (W-2 forms) do not match
SSA’s records.7 The mismatched information may be due to typographical or other
3 Calculations performed by the Congressional Research Service (CRS) using the average
of the monthly Current Population Surveys (CPS’s) for 2006. The CPS does not include a
variable on immigration status.
4 For Social Security payroll taxes to be withheld from wages, a worker must provide a
Social Security number (SSN) to his/her employer. An alien who is working in the United
States without authorization (1) may have an SSN because he/she worked in the United
States legally and then fell out of status; or (2) may have obtained an SSN fraudulently.
5 Most of these nonimmigrant visa categories are defined in §101(a)(15) of the INA. These
visa categories are commonly referred to by the letter and numeral that denotes their
Subsection in §101(a)(15), e.g., B-2 tourists, E-2 treaty investors, F-1 foreign students, H-1B
temporary professional workers, J-1 cultural exchange participants, or S-4 terrorist
informants.
6 For example, an alien present in the United States on a B-2 tourist visa may remain in the
United States for six months, but is not legally permitted to work. In addition, the spouses
of most temporary noncitizen workers do not have employment authorization. For more
information on which categories of noncitizen are entitled to work in the United States, see
CRS Report RL31381, U.S. Immigration Policy on Temporary Admissions, by Ruth Ellen
Wasem.
7 Annually, SSA reviews W-2 forms and credits Social Security-covered earnings to
workers. If a name or SSN on a W-2 form does not match SSA’s records, the earnings
(continued...)

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CRS-3
clerical errors (such as a misspelled name or an individual’s failure to report a new
married name to SSA), as well as to the use of invalid or stolen Social Security
numbers by aliens who are working in the United States without authorization. There
is no official published data on the amount of wages posted to the earnings suspense
file that is directly attributable to aliens who are working in the United States without
authorization based on fraudulent documents. However, SSA Inspector General
Patrick P. O’Carroll stated in testimony before Congress that “we believe the chief
cause of wage items being posted to the [earnings suspense file] instead of an
individual’s earnings record is unauthorized work by noncitizens.”8 SSA’s Office of
the Chief Actuary estimates that about 5.6 million unauthorized immigrants are
working and paying Social Security taxes in 2007.9
Social Security Payment Rules
Workers become eligible for Social Security benefits when they meet the
insured status and age requirements specified in the Social Security Act.10 They
become entitled to benefits when they have met all of the eligibility requirements and
filed an application for benefits. Because Social Security is an earned entitlement
program, there are few restrictions on benefit payments once a worker becomes
entitled to benefits. The Social Security Act does prohibit the payment of benefits
to: individuals residing in certain countries;11 individuals confined to a jail, prison,
or certain other public institutions for commission of a crime; most individuals
removed from the United States (i.e., deported);12 aliens residing in the United States
unlawfully; and, in some cases, aliens residing outside the United States for more
than six months at a time.
Social Security Protection Act of 2004. On March 2, 2004, the President
signed into law the Social Security Protection Act of 2004 (P.L. 108-203, H.R. 743).
7 (...continued)
credits go into an earnings suspense file while SSA attempts to reconcile the discrepancy.
The figure shown here represents the amount of wages (from 255 million wage items)
posted to the earnings suspense file through tax year 2003, as of October 2005.
8 Statement of the Honorable Patrick P. O’Carroll, Inspector General, Social Security
Administration, Before the Subcommittee on Oversight of the House Committee on Ways
and Means, February 16, 2006. The testimony is available from the committee website at
[http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=4710], visited
June 22, 2007.
9 Unpublished estimate by SSA’s Office of the Chief Actuary.
10 In the case of disability benefits, a worker is eligible for benefits when he/she has met
insured status requirements and established a period of disability.
11 U.S. Treasury Department regulations or Social Security restrictions prohibit payments
to individuals living in Cuba, Democratic Kampuchea (formerly Cambodia), North Korea,
Vietnam and areas in the former Soviet Union (excluding Armenia, Estonia, Latvia,
Lithuania, and Russia).
12 One exception would be aliens who are removed on status violations (i.e., removed from
the United States because they are illegally present, not because they have committed a
crime).

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CRS-4
Among other changes, P.L. 108-203 restricts the payment of Social Security benefits
(retirement, survivors, and disability benefits) to certain noncitizens who file an
application for benefits based on an SSN assigned on or after January 1, 2004.
Specifically, a noncitizen who files an application for benefits based on an SSN
assigned on or after January 1, 2004, is required to have work authorization at the
time an SSN is assigned, or at some later time, to gain insured status under the Social
Security program (see Section 214(c) of the Social Security Act).13 If the individual
had work authorization at some point, all of his/her Social Security-covered earnings
would count toward insured status. If the individual never had authorization to work
in the United States, none of his/her earnings would count toward insured status and
Social Security benefits would not be payable on his/her work record (i.e., benefits
would not be payable to the worker or to the worker’s family).14
A noncitizen who files an application for benefits based on an SSN assigned
before January 1, 2004, is not subject to the work authorization requirement under
P.L. 108-203. All of the individual’s Social Security-covered earnings would count
toward insured status, regardless of his/her work authorization status.
The treatment of unauthorized earnings for Social Security purposes is an issue
of current legislative interest. In June 2007, the Senate approved an amendment to
the Comprehensive Immigration Reform Act of 2007 that would preclude earnings
credits based on work performed without authorization in 2004 or later (with respect
to individuals who are assigned an SSN in 2004 or later). For more information, see
the section of the report titled “Legislation in the 110th Congress.”
The following table summarizes the treatment of unauthorized earnings for
Social Security purposes under current law.
13 The 2004 law provides exceptions to the work authorization requirement for certain
noncitizens (i.e., noncitizens who are admitted to the United States under a B visa (for
business purposes) or D visa (for service as a crew member) at the time quarters of coverage
are earned).
14 Before enactment of P.L. 108-203, all Social Security-covered earnings would count
toward insured status regardless of an alien’s work authorization status.

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CRS-5
Treatment of Unauthorized Earnings for Social Security Purposes
Current Law
! The treatment of unauthorized earnings for Social Security purposes
differs, depending on when an individual is assigned a Social Security
number (SSN). Individuals who were assigned an SSN before 2004 are
not required to have authorization to work in the United States at any
point to qualify for Social Security benefits. Individuals who are
assigned an SSN in 2004 or later are required to have work
authorization at some point to qualify for benefits.
Individuals Assigned an SSN Before 2004
! All Social Security-covered earnings are credited for purposes of
qualifying for benefits, regardless of an individual’s work
authorization status (an individual is not required to have work
authorization at any point to count all earnings for Social Security
purposes).
Individuals Assigned an SSN in 2004 or Later
! With respect to benefit applications based on an SSN assigned on or
after January 1, 2004, an individual must have work authorization
when an SSN is assigned, or at any later time, to gain insured status
under the Social Security program.
If an individual has work authorization at some point, all of his/her Social
Security-covered earnings count toward qualifying for benefits (all
authorized and unauthorized earnings).
If an individual never obtains work authorization, none of his/her Social
Security-covered earnings count toward qualifying for benefits.
Assignment of Social Security Numbers to Noncitizens. The
treatment of unauthorized earnings for Social Security purposes differs, depending
on whether an individual was assigned an SSN before 2004, or in 2004 or later. The
policy with respect to SSN assignment for noncitizens was changed in late 2003.
Noncitizens who are authorized to work in the United States by DHS can be assigned
an SSN. Noncitizens who are not authorized to work can be assigned an SSN for a
valid nonwork reason. Following a regulatory change that went into effect in late
2003, the only valid nonwork reason for assignment of an SSN would be if an
individual needs an SSN to receive federal, state, or local government benefits to
which he/she has otherwise established entitlement [see 20 C.F.R. 422.104]. Before
the regulatory change, the policy for assignment of nonwork SSNs was less
restrictive, and noncitizens could be assigned an SSN for a variety of nonwork
purposes, such as to obtain a driver’s license.15
15 The regulation is available on the SSA website at [http://www.ssa.gov/OP_Home/cfr20/
(continued...)

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CRS-6
Special Payment Rules for Noncitizens. Section 202(y) of the Social
Security Act requires noncitizens in the United States to be “lawfully present” to
receive benefits.16 If a noncitizen is entitled to benefits, but does not meet the lawful
presence requirement, his/her benefits are suspended. In such cases, a noncitizen
may receive benefits while residing outside the United States (including benefits
based on work performed in the United States without authorization) if he/she meets
one of the exceptions to the “alien nonpayment provision” under Section 202(t) of
the Social Security Act. Under the alien nonpayment provision, a noncitizen’s
benefits are suspended if he/she remains outside the United States17 for more than six
consecutive months,18 unless one of several broad exceptions is met. For example,
an alien may receive benefits outside the United States if he/she is a citizen of a
country that has a social insurance or pension system that pays benefits to eligible
U.S. citizens residing outside that country (a “social insurance country”), or if he/she
is a citizen or resident of a country with which the United States has a totalization
agreement (see Table 1). If an alien does not meet one of the exceptions to the alien
nonpayment provision, his/her benefits are suspended beginning with the seventh
month of absence and are not resumed until he/she returns to the United States
lawfully for a full calendar month.
In addition, to receive payments outside the United States, alien dependents and
survivors must have lived in the United States for at least five years previously
(lawfully or unlawfully), and the family relationship to the worker must have existed
during that time (see Table 2). The law provides several broad exceptions to the
five-year U.S. residency requirement for alien dependents and survivors. For
example, an alien is exempt from the five-year U.S. residency requirement if he/she
is a citizen of a “treaty obligation” country (i.e., if nonpayment would be contrary to
a treaty between the United States and the individual’s country of citizenship), or if
he/she is a citizen or resident of a country with which the United States has a
totalization agreement (see Table 3).
15 (...continued)
422/422-0104.htm], visited June 22, 2007.
16 The definition of “lawfully present” is provided in Appendix B. The lawful presence
requirement was added by the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (P.L. 104-193) and the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (P.L. 104-208). For more information, see the section of the
report titled “Legislative History of Payment Rules for Noncitizens.”
17 “Outside the United States” means outside the territorial boundaries of the 50 States, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana
Islands, and American Samoa.
18 The six-month period of absence begins with the first full calendar month following the
period in which the individual has been outside the United States for more than 30
consecutive days. If the individual returns to the United States for any part of a day during
the 30-day period, the 30-day period starts over.

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CRS-7
Table 1. Exceptions to the Alien Nonpayment Provision
for Workers and Dependents/Survivors
An alien’s benefits are suspended if he/she is outside the United States for more than six
consecutive months, unless one of the following exceptions is met:
! the individual is a citizen of a country that has a social insurance or
pension system under which benefits are paid to eligible U.S. citizens
who reside outside that country (for example, Brazil, Finland, Mexico,
Philippines and Turkey; see Appendix A for a complete list of
countries)
! the individual is entitled to benefits on the earnings record of a worker
who lived in the United States for at least 10 years or earned at least 40
quarters of coverage under the U.S. Social Security system (exception
does not apply if the individual is a citizen of a country that does not
provide social insurance or pension system payments to eligible U.S.
citizens who reside outside that country)
! the individual is entitled to benefits on the earnings record of a worker
who had railroad employment covered by Social Security
! the individual is outside the United States while in the active military
or naval service of the United States
! the individual is entitled to benefits on the earnings record of a worker
who died while in the U.S. military service or as a result of a service-
connected disease or injury
! the nonpayment of benefits would be contrary to a treaty obligation of
the United States in effect as of August 1, 1956 (i.e., the individual is
a citizen of a treaty obligation country; see Appendix A for a list of
countries)
! the individual is a citizen or resident of a country with which the United
States has a totalization agreement (see Appendix A for a list of
countries)
! the individual was eligible for Social Security benefits as of December
1956
Source: Section 202(t) of the Social Security Act.

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CRS-8
Table 2. Additional Residency Requirement for Alien
Dependents/Survivors Outside the United States
In addition to the requirements in Table 1, to receive payments outside the United
States, an alien dependent/survivor must have lived in the United States for at least
five years (lawfully or unlawfully) under one of the following circumstances:
A spouse, divorced spouse, widow(er), surviving divorced spouse, or surviving
divorced mother or father:
must have resided in the United States for at least five years and the spousal
relationship to the worker must have existed during that time
A child:
must have resided in the United States for at least five years as the child of the
worker; or
the worker and the child’s other parent (if any) each must have either resided
in the United States for at least five years or died while residing in the United
States
An adopted child:
must have been adopted in the United States; and
lived in the United States with the worker; and
received at least half of his or her support from the worker in the year before
the worker’s entitlement or death
Source: Section 202(t) of the Social Security Act.
Table 3. Exceptions to the Additional Residency Requirement
for Alien Dependents/Survivors Outside the United States
An alien dependent/survivor living outside the United States is not subject to the
five-year U.S. residency requirement if one of the following exceptions is met:
the individual was eligible for Social Security benefits before January 1, 1985
the individual is entitled to benefits on the earnings record of a worker who
died while in the U.S. military service or as a result of a service-connected
disease or injury
the nonpayment of benefits would be contrary to a treaty obligation of the
United States in effect as of August 1, 1956 (i.e., the individual is a citizen of
a treaty obligation country; see list of countries in Appendix A)
the individual is a citizen or resident of a country with which the United States
has a totalization agreement, unless otherwise specified in the agreement (see
list of countries in Appendix A)
Source: Section 202(t) of the Social Security Act.
Note: Aliens who live abroad may not receive payments in countries to which the U.S. Treasury
Department is prohibited from mailing benefit checks. See Your Payments While You Are Outside the
United States (updated January 2006) on the SSA website at [http://www.ssa.gov/pubs/10137.html],
visited June 22, 2007.

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CRS-9
Legislative History of Payment Rules for Noncitizens. When the
Social Security program began paying benefits in 1940, there were no restrictions on
benefit payments to noncitizens. In 1956, amid concerns that noncitizens were
working in the United States for relatively short periods and returning to their native
countries where they and their family members would collect benefits for many years,
Congress enacted restrictions on benefits for alien workers living abroad (restrictions
did not apply to alien dependents and survivors). The Social Security Amendments
of 1956 (P.L. 84-880) required noncitizens to reside in the United States to receive
benefits and suspended benefits if the recipient remained outside the United States
for more than six consecutive months, with broad exceptions (see Table 1).
In 1983, Congress placed restrictions on benefit payments to alien dependents
and survivors living abroad. The Social Security Amendments of 1983 (P.L. 98-21)
made dependents and survivors subject to the same residency requirement as workers
(described above) and further required that they (or their parents, in the case of a
child’s benefit) must have lived in the United States for at least five years, with broad
exceptions (see Tables 2 and 3).
Several factors led to the enactment of tighter restrictions on benefit payments
to alien dependents and survivors living abroad in 1983, including the large number
of dependents that were being added to the benefit rolls (in some cases under
fraudulent circumstances) after workers had returned to their native country and
become entitled to benefits, and difficulties associated with monitoring the continued
eligibility of recipients living abroad.
At the time, the General Accounting Office (GAO, now named the Government
Accountability Office) estimated that, of the 164,000 dependents living abroad in
1981, 56,000 were added to the benefit rolls after the worker became entitled to
benefits. Of that number, an estimated 51,000 (or 91%) were noncitizens.19 Two
years earlier, the Social Security Commissioner stated that SSA investigators had
found evidence that some recipients living abroad were faking marriages and
adoptions and failing to report deaths in order to “cheat the system.” At the time, the
Commissioner stated that such problems were particularly acute in Greece, Italy,
Mexico and the Philippines where large numbers of beneficiaries were residing. He
stated further that, in some countries, “there is a kind of industry built up of so-called
claims-fixers who, for a percentage of the benefit, will work to ensure that somebody
gets the maximum benefit they can possibly get out of the system.”20
In 1996, Congress enacted tighter restrictions on the payment of Social Security
benefits to aliens residing in the United States. The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (PRWORA)21 prohibited the payment
19 General Accounting Office, Issues Concerning Social Security Benefits Paid to Aliens,
GAO/HRD-83-32, March 24, 1983, available at [http://archive.gao.gov/d40t12/120895.pdf],
visited June 22, 2007.
20 CRS Issue Brief IB82001, Social Security: Alien Beneficiaries, by David Koitz (out of
print; available from Dawn Nuschler or Alison Siskin on request).
21 P.L. 104-193, § 401(b)(2).

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CRS-10
of Social Security benefits to aliens in the United States who are not lawfully present,
unless nonpayment would be contrary to a totalization agreement or Section 202(t)
of the Social Security Act (the alien nonpayment provision).22 This provision became
effective for applications filed on or after September 1, 1996. Subsequently, the
Illegal Immigration Reform and Immigrant Responsibility Act of 199623 added
Section 202(y) to the Social Security Act. Section 202(y) of the act, which became
effective for applications filed on or after December 1, 1996, states:
Notwithstanding any other provision of law, no monthly benefit under [Title II
of the Social Security Act] shall be payable to any alien in the United States for
any month during which such alien is not lawfully present in the United States
as determined by the Attorney General.
Tax Treatment of Social Security Benefits
Noncitizens who reside outside the United States are subject to different rules
regarding federal income tax treatment of Social Security benefits. U.S. citizens and
resident aliens24 pay federal income tax on a portion of their benefit if their income
exceeds specified thresholds. Specifically, they pay federal income tax on up to 50%
of their benefit if their modified adjusted gross income (adjusted gross income (AGI)
plus tax-exempt interest income plus 50% of Social Security benefits) is more than
$25,000 but no more than $34,000 for a single person, or more than $32,000 but no
more than $44,000 for a married couple filing jointly. They pay federal income tax
on up to 85% of their benefit if their modified AGI is more than $34,000 for a single
person or more than $44,000 for a married couple filing jointly. These thresholds do
not apply to married couples who live together and file separate returns. Currently,
about one-third of Social Security recipients pay federal income tax on their benefits.
22 Also, under PRWORA, federal agencies that administer “federal public benefits” are
required to report to the Department of Homeland Security (DHS) information on any alien
that is known to be unlawfully present in the United States. (P.L. 104-193, §404).
Nonetheless, this requirement does not apply to SSA with respect to Title II of the Social
Security Act (Old-Age, Survivors and Disability Insurance Program). Federal Register, vol.
65, no. 189, September 28, 2000, pp. 58301-58302.
23 P.L. 104-208, § 503(a).
24 Resident alien is a term used in tax law. An alien is considered to be a U.S. resident for
income tax purposes if he/she (1) is a lawful permanent resident of the United States. at any
time during the calendar year; (2) meets the requirements of the “substantial presence” test;
or (3) makes the first-year election under 26 U.S.C. § 7701(b)(4) and 26 C.F.R.
§ 301.7701(b)-4(c)(3). An alien individual meets the substantial presence test if: (1) the
alien is present in the United States for at least 31 days during the calendar year and (2) the
sum of the number of days on which such individual was present in the U.S. during the
current year and the two preceding calendar years (when multiplied by the applicable
multiplier — one for the current year, one-third for the first preceding year, and one-sixth
for the second preceding year) equals or exceeds 183 days. Even though an alien individual
otherwise meets the requirements of the substantial presence test, there are circumstances
when an alien will not be considered a resident of the United States. An alien who does not
qualify under either of these tests will be treated as a nonresident alien for purposes of the
income tax. [26 U.S.C. § 7701(b)].

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CRS-11
Noncitizens who live outside the United States pay federal income tax on their
benefits without regard to these thresholds. Section 871 of the Internal Revenue
Code imposes a 30% rate of tax withholding on the U.S. income of noncitizens who
live outside the country (unless a lower rate is established by treaty) because there is
no practical way for the U.S. government to determine the income of such persons.
Under the withholding, noncitizens who reside outside the United States pay 30% of
the maximum taxable amount of Social Security benefits (85%) in federal income
taxes. For example, the tax withholding on an annual Social Security benefit of
$12,000 would be $3,060 [($12,000 x 0.85) x 0.30].25
Totalization Agreements
As shown in Tables 1 and 3, alien workers and alien dependents/survivors may
receive payments while living outside the United States if they are a citizen or
resident of a country with which the United States has a totalization agreement.26
Section 233 of the Social Security Act authorizes the President to enter into a
totalization agreement with a foreign country to coordinate the collection of payroll
taxes and the payment of benefits under each country’s Social Security system for
workers who split their careers between the two countries. For example, without a
totalization agreement, an individual who is sent by a U.S. company to work in a
foreign country (and his or her employer) must contribute to the Social Security
systems in both countries, resulting in dual Social Security coverage and taxation
based on the same earnings. With one exception (Italy), totalization agreements
allow workers (and their employers) to contribute only to the foreign system if the
worker is employed in that country for five or more years, or only to the U.S. system
if the worker is employed in that country for less than five years.
Totalization agreements also allow workers who divide their careers between
the two countries to combine earnings credits under both systems to qualify for
benefits if they lack sufficient coverage under either system.27 While a worker may
combine earnings credits to qualify for benefits under one or both systems, his/her
benefit is prorated to reflect only the number of years the worker paid into each
system. The same treatment applies to foreign workers in the United States.
Totalization agreements are subject to congressional review. Section 233(e) of
the Social Security Act requires the President to submit to Congress the text of the
agreement and a report on (1) the estimated number of individuals who would be
25 For more information on the taxation of noncitizens, see CRS Report RS21732, Federal
Taxation of Aliens Working in the United States, by Erika Lunder.
26 Social Security regulations (20 C.F.R. § 404.1928) specify that a totalization agreement
“may provide that a person entitled to benefits under title II of the Social Security Act may
receive those benefits while residing in the foreign country party to the agreement,
regardless of the alien non-payment provision.”
27 This applies to Social Security retirement and disability benefits. Generally, a minimum
of 40 credits is required to qualify for Social Security retirement benefits. Fewer credits are
required to qualify for disability benefits, depending on the worker’s age at the onset of the
disability. In some cases, a worker may qualify for disability benefits with a minimum of
six credits.

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CRS-12
affected by the agreement and (2) the estimated financial impact of the agreement on
programs established by the Social Security Act. Section 233(e)(2) of the Social
Security Act specifies that a totalization agreement automatically goes into effect
unless the House of Representatives or the Senate adopts a resolution of disapproval
within 60 session days of the agreement’s transmittal to Congress.
It should be noted that the provision of Section 233(e)(2) that allows for the
rejection of a totalization agreement upon adoption of a resolution of disapproval by
either House of Congress is an unconstitutional legislative veto. This conclusion is
compelled by the holding in INS v. Chadha, where the Supreme Court struck down
a provision in the Immigration and Nationality Act that gave either House of
Congress the authority to overrule deportation decisions made by the Attorney
General.28 The Court declared that a legislative veto constitutes an exercise of
legislative power, as its use has “the purpose and effect of altering the legal rights,
duties, and relations of persons ... outside the legislative branch.”29 Accordingly, the
Court invalidated the disapproval mechanism, holding that Congress may exercise
its legislative authority only “in accord with a single, finely wrought and exhaustively
considered procedure,” namely bicameral passage and presentation to the President.30
Given that the disapproval mechanism in Section 233(e)(2) authorizes the exercise
of legislative authority outside the strictures of bicameralism and presentment, it is
likewise unconstitutional.31
Congress has never rejected a totalization agreement. As a result, the fact that
the mechanism under Section 233(e)(2) is unconstitutional has not been an issue.
Congressional utilization of the mechanism in Section 233(e)(2) to reject a
totalization agreement could give rise to a judicial challenge, potentially resulting in
an invalidation of the disapproval mechanism and a determination that the agreement
is effective. Specifically, in considering the effect of the unconstitutional disapproval
mechanism, a reviewing court would consider whether the remainder of Section 233
is valid, or whether the entire statute must be nullified. The Supreme Court has held
that “[u]nless it is evident that the Legislature would not have enacted those
provisions which are within its power, independently of that which is not, the invalid
28 462 U.S. 919 (1983). Shortly after its decision in Chadha, the Court without opinion and
with one dissent summarily affirmed lower court opinions that had struck down a two-House
legislative veto provision of the Federal Trade Commission Improvements Act, 15 U.S.C.
§ 57a-1. See United States Senate v. Federal Trade Commission, 463 U.S. 1216 (1983);
United States House of Representatives v. Federal Trade Commission, 463 U.S. 1216
(1983).
29 Chadha, 462 U.S. at 952.
30 462 U.S. at 951.
31 The unconstitutionality of legislative veto provisions is noted at 42 U.S.C. §433
(codifying §233), where it is further stated that the provisions of §233(e) are similar to those
struck down in INS v. Chadha. For a consideration of bicameralism and presentment
requirements generally, see CRS Report RL30249, The Separation of Powers Doctrine: An
Overview of Its Application and Rationale, by T.J. Halstead.

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CRS-13
part may be dropped if what is left is a fully operative law.”32 In Westcott v.
Califano, the court noted that “the existence of a broad severability clause in the
Social Security Act reflects the Congressional wish that judicial interpretation of the
act leave as much of the statute intact as possible.”33 The existence of this
severability clause, coupled with the fact that the operative provisions of Section 233
would remain fully functional absent the disapproval mechanism in Subsection
(e)(2), gives rise to the likelihood that a reviewing court would invalidate any attempt
to utilize the disapproval mechanism, while giving effect to an otherwise properly
executed totalization agreement.34
Legislation has been introduced in the 110th Congress that would amend the
congressional review process for totalization agreements specified in Section 233(e)
of the Social Security Act. In January 2007, Senator Ensign introduced S. 43, the
Social Security Totalization Agreement Reform Act of 2007, and Representative
Cubin introduced a companion bill (H.R. 279). Among other provisions, the bills
would require the President to notify each house of Congress of the intent to enter
into an agreement at least 90 calendar days in advance and publish a notice of intent
in the Federal Register. The measures would require the President to transmit the
text of an agreement, and a report containing specified information, to each house of
Congress. An agreement could go into effect only after a joint resolution approving
the agreement is passed by both houses of Congress and signed into law. The
measures would establish periodic evaluation and reporting requirements to assess
the impact of a totalization agreement over time. The measures would apply to
totalization agreements transmitted to Congress on or after January 1, 2007.
Senator Ensign offered an amendment (S.Amdt. 153) to H.R. 2, the Fair
Minimum Wage Act of 2007, that is identical to S. 43. The amendment was
withdrawn prior to Senate passage of H.R. 2 by a vote of 94-3 on February 1, 2007.
On June 5, 2007, Senator Chambliss offered an amendment (S.Amdt. 1318) to the
Comprehensive Immigration Reform Act of 2007 (S.Amdt. 1150 to S. 1348) that is
identical to S. 43. No action was taken on the Chambliss amendment before the
measure was withdrawn from Senate floor debate on June 7, 2007.
32 Buckley v. Valeo, 424 U.S. 1, 108 (1976) (quoting Champlin Refining Co. v. Corporation
Commission, 286 U.S. 210, 234 [1932]).
33 460 F.Supp 737 (D. Mass 1978). In Califano, the court was referring to 42 U.S.C. § 1303,
which states: “[i]f any provision of this chapter, or the application thereof to any person or
circumstance, is held invalid, the remainder of the chapter, and the application of such
provision to other persons or circumstances shall not be affected thereby.”
34 In light of the Court’s holding in Chadha, it is apparent that any congressional action
taken to restrict or control executive authority to enter into totalization agreements, or to
invalidate any such agreements, must be accomplished through bicameral passage and
presentment to the President. Accordingly, congressional options in this regard would
appear to be limited to imposing additional requirements on the adoption of totalization
agreements, restricting authority to enter into such agreements unless approved by both
Congress and the President on a case by case basis, or to pass a law disapproving a
particular agreement before or after it is finalized. See Chadha, 462 U.S. at 951.
Information on legal issues regarding Section 233(e)(2) of the Social Security Act provided
by T.J. Halstead, CRS Legislative Attorney.

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CRS-14
Since 1978, the United States has entered into totalization agreements with 21
countries (the effective date for each agreement is shown in Appendix A):
Australia, Austria, Belgium, Canada, Chile, Finland, France, Germany, Greece,
Ireland, Italy, Japan, South Korea, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
In addition to the 21 totalization agreements currently in effect, the United
States signed a totalization agreement with Mexico on June 29, 2004. After an
agreement has been signed, SSA and its counterpart in the foreign country continue
to address implementation issues and may amend the language. The agreement is
then forwarded to the Secretary of State who reviews it in the context of other
international agreements with the foreign country. Next, the agreement is sent to the
President for review, and the President may then transmit the agreement to Congress
for review. To date, the totalization agreement with Mexico has not been transmitted
to Congress. Reportedly, as of May 2007, the agreement is under review at SSA (i.e.,
SSA has not yet forwarded the agreement to the Department of State). With respect
to other countries, SSA reports that negotiations on agreements with the Czech
Republic and Denmark have been completed, and that preparations are underway for
the signing ceremonies. In addition, discussions are underway on a possible
agreement with Poland.35
While the specific terms of each totalization agreement may differ, the
provisions of a totalization agreement must be consistent with the Social Security
Act. Section 233(c)(4) of the Social Security Act states: “any such agreement may
contain other provisions which are not inconsistent with the other provisions of [Title
II of the Social Security Act] and which the President deems appropriate to carry out
the purposes of this section.” Currently, about $20 million is paid each month to
almost 113,000 recipients under U.S. totalization agreements.36
Issues
Perceived Disparate Treatment Under
Social Security and Immigration Law
Some believe there is somewhat of a disconnect between how the Social
Security and immigration rules affect unauthorized aliens. Basically, immigration
policies are designed to discourage and punish those unauthorized to work in the
United States. On the other hand, under Social Security rules there are certain
circumstances when an unauthorized alien can collect Social Security benefits. As
a result of this perceived inconsistency, some oppose paying Social Security benefits
35 Information on the status of agreements that are pending or under negotiation is available
on the SSA website at [http://www.ssa.gov/international/status.html], visited June 22, 2007.
36 In December 2005, the average monthly benefit paid under U.S. totalization agreements
was $209 for retired workers and $392 for disabled workers. SSA, Social Security Bulletin,
Annual Statistical Supplement 2006, table 5.M1.

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to such aliens arguing that aliens who violate immigration law should not be
rewarded by receiving Social Security benefits. Others contend that aliens who work
in Social Security-covered employment (i.e., had payroll taxes withheld from their
earnings) should be eligible for benefits whether or not they had employment
authorization.
Totalization Agreement with Mexico
On June 29, 2004, the Social Security Administration announced that a
totalization agreement with Mexico had been signed by U.S. and Mexican
government officials. In a press release and summary document, SSA reports that
the agreement would save 3,000 U.S. workers and their employers approximately
$140 million in Mexican payroll taxes over the first five years of the agreement. In
addition, SSA reports that the projected cost to the U.S. Social Security system would
average $105 million annually over the first five years.37 To date, the totalization
agreement with Mexico has not been transmitted to Congress for review.
On January 4, 2007, both Representative Goode and Representative King
introduced resolutions of disapproval (H.Res. 18 and H.Res 22, respectively) against
the Social Security totalization agreement between the United States and Mexico
signed on June 29, 2004, pursuant to Section 233(e)(2) of the Social Security Act.
(See related discussion under the “Totalization Agreements” section of the report.)38
With respect to legislative activity in the 109th Congress related to the
totalization agreement with Mexico, Representative Hayworth offered an amendment
to H.R. 3010 (Departments of Labor, Health and Human Services, and Education,
and Related Agencies Appropriations Act of 2006) that would have prohibited the
Commissioner of Social Security and the Social Security Administration from using
funds appropriated by the measure to pay the compensation of SSA employees to
administer Social Security benefit payments under a totalization agreement with
Mexico that are inconsistent with federal law. The Hayworth amendment (H.Amdt.
365) was agreed to by the House by a voice vote on June 24, 2005. The provision
was struck from the version of H.R. 3010 reported by the Senate Appropriations
Committee and was not part of the final measure signed into law.
The announcement in 2004 that an agreement with Mexico had been signed
revived a debate that began in December 2002 following media reports that
negotiations were underway on a potential totalization agreement between the United
States and Mexico.39 Among the approximately 7.2 million Mexican-born workers
37 The SSA press release and summary document are available on the SSA website at
[http://www.ssa.gov/pressoffice/pr/USandMexico-pr-alt.htm], visited June 22, 2007.
38 In the 109th Congress, Rep. Goode introduced a concurrent resolution (H.Con.Res 50)
expressing disapproval by the Congress of the totalization agreement with Mexico.
39 See, for example, Jonathan Weisman, “U.S. Social Security May Reach Mexico,”
Washington Post, December 19, 2002, p. A1.

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in the U.S. labor force in 2006, approximately 5.6 million (80%) were noncitizens40
and 1.5 million (20%) were naturalized citizens.41 The effects of the totalization
agreement with Mexico depend on the specific terms and language of the agreement,
which have not been finalized. The following discussion pertains to the version of
the agreement that SSA released on January 4, 2007, in response to the Freedom of
Information Act (FOIA) request from the TREA Senior Citizens League.42
As in most totalization agreements, the totalization agreement with Mexico
would waive the five-year U.S. residency requirement for alien dependents and
survivors to receive benefits outside the United States (see Tables 2 and 3). Under
current law, an alien worker entitled to Social Security benefits (based on work
performed with or without authorization in the United States) may receive benefits
outside the United States if he/she is a citizen of Mexico, because Mexico meets the
definition of a “social insurance country.” An alien dependent or survivor entitled
to Social Security benefits may receive benefits outside the United States only if
he/she had lived in the United States previously for at least five years (and the family
relationship on which benefits are based existed during that time), unless he/she
meets one of several exceptions. The totalization agreement with Mexico would
allow alien dependents and survivors in Mexico who have never lived in the United
States to receive Social Security benefits outside the United States.
As discussed above, Section 202(y) of the Social Security Act prohibits the
payment of benefits to aliens in the United States who are not lawfully present.
Although some observers have expressed concern that a totalization agreement with
Mexico could allow unauthorized aliens to receive payments in the United States, the
version of the agreement signed in June 2004 does not waive this requirement.43
Similarly, another concern has been that the totalization agreement would waive the
provision of law that requires an alien whose application for benefits is based on an
SSN assigned in 2004 or later to have work authorization at the time an SSN is
assigned, or at any later time, to gain insured status under the Social Security
program (i.e., the alien must have work authorization at some point to count work
credits for insured status purposes). Reportedly, in 2006, SSA sent a diplomatic note
to the Mexican government clarifying that the agreement would not waive the “work
authorization” requirement. SSA has not received a response from the Mexican
government. Still others express concern that a totalization agreement with Mexico
could provide an incentive for unauthorized workers from Mexico to come to the
United States. In addition, given the Social Security system’s projected long-range
40 As discussed above, “noncitizens” include aliens who are legally present, as well as those
who are unauthorized. The Current Population Survey (CPS) does not include a variable
on immigration status.
41 Calculations performed by CRS using the average of the monthly CPSs for 2006.
42 The text of the U.S.-Mexico totalization agreement is available on the TREA Senior
Citizens League website (in pdf format) at [http://www.tscl.org/NewContent/102697.asp],
visited June 22, 2007. The agreement is also available on the SSA website (in html format)
at [http://www.ssa.gov/international/Agreement_Texts/mexico.html], visited June 22, 2007.
43 None of the 21 totalization agreements currently in effect make such provision.

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CRS-17
funding shortfall, some question the feasibility of adding a potentially large number
of recipients to the rolls in the absence of structural Social Security reform.
Others argue that an agreement (that precludes payments to unauthorized aliens
in the United States) could be beneficial to the United States and that the cost could
be reasonable.44 They argue that there could be substantial savings for certain U.S.
workers and employers by removing the burden of double taxation. For example,
without a totalization agreement, U.S. citizens and legal permanent residents
(LPRs)45 sent by U.S. companies to work in Mexico must contribute to both the U.S.
and Mexican Social Security systems. Moreover, some workers may not qualify for
U.S. or Mexican Social Security benefits because they do not have enough earnings
credits under either system. In addition, proponents of totalization agreements argue
that such agreements remove financial barriers to multinational companies and their
employees working in foreign countries.
General Accounting Office Study. In February 2003, the House
Committee on Ways and Means and the House Committee on the Judiciary asked the
General Accounting Office (GAO)46 to provide information to Congress on the
possible effects of a totalization agreement with Mexico. In a press release dated
February 24, 2003, House Ways and Means Social Security Subcommittee Chairman
E. Clay Shaw, Jr., and House Judiciary Committee Chairman F. James
Sensenbrenner, Jr., expressed particular interest in the potential impact of an
agreement with Mexico on the Social Security trust funds, given the large number of
noncitizens who may be working in the United States without authorization.
According to the press release, the committee asked specifically for information on
the potential effects of an agreement on workers, beneficiaries, service delivery by
the SSA, program finances, immigration and illegal work by noncitizens.
In September 2003, GAO presented its findings before the House Committee
on the Judiciary, Subcommittee on Immigration, Border Security, and Claims at a
hearing titled Should There Be a Totalization Agreement with Mexico?47 and shortly
afterward released its report to Congress — Social Security: Proposed Totalization
Agreement with Mexico Presents Unique Challenges.48 Among the advantages
associated with totalization agreements, GAO notes that they foster international
44 Joel Mowbray, “Illegal but Paid? The Question of Social Security for Mexicans,”
National Review, January 27, 2003, pp. 22-23.
45 Foreign nationals may be admitted to the United States temporarily or may come to live
permanently. Those admitted on a permanent basis are known as immigrants or legal
permanent residents.
46 Since this study was published, the General Accounting Office has been renamed the
Government Accountability Office.
47 The September 11, 2003 hearing document (Serial No. 47) may be accessed online at
[http://judiciary.house.gov/media/pdfs/printers/108th/89298.PDF], visited June 22, 2007.
48 The September 11, 2003 testimony (GAO-03-1035T) may be accessed online at
[http://www.gao.gov/new.items/d031035t.pdf], visited June 22, 2007. The September 30,
2003 GAO report (GAO-03-993) may be accessed online at [http://www.gao.gov/new.
items/d03993.pdf], visited June 22, 2007.

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commerce, protect benefits for workers who divide their careers between the United
States and a foreign country, allow multinational companies and their employees to
avoid paying dual Social Security taxes on the same earnings, and enhance
diplomatic relations. GAO also notes that, because such agreements represent a cost
to the U.S. Social Security system, associated risks should be assessed and mitigated
during the negotiation process. Overall, GAO found that the procedures followed by
SSA in the development of the totalization agreement with Mexico (and all other
agreements) are not well documented. GAO goes on to state: “... SSA provided no
information showing that it assessed the reliability of Mexican earnings data and the
internal controls in place to ensure the integrity of information that SSA will rely on
to pay Social Security benefits.”49 Records on which SSA would rely to determine
a worker’s (and family members’) initial and continued eligibility for benefits include
birth, death and marriage records.
In addition, GAO found that a totalization agreement with Mexico would
increase the number of Mexican workers and their family members eligible for Social
Security benefits for two reasons. First, Mexican workers who otherwise would not
have enough earnings credits to qualify for benefits in the United States could
combine U.S. and Mexican credits to qualify for a partial U.S. Social Security
benefit. Second, more family members in Mexico would qualify for U.S. Social
Security benefits because a totalization agreement generally exempts dependents and
survivors residing outside the United States from the five-year U.S. residency
requirement.
In terms of the potential cost of a totalization agreement with Mexico, GAO
evaluated a March 2003 cost estimate prepared by SSA’s Office of the Chief
Actuary. SSA projects that an agreement with Mexico would cost $78 million in the
first year and $650 million (constant 2002 dollars) by 2050. The cost estimate
assumes an initial increase of 50,000 new beneficiaries in Mexico based on the
number of persons (U.S. citizens and others) in Mexico currently receiving U.S.
Social Security benefits and projects that the number of additional beneficiaries under
the agreement would increase to 300,000 over time. SSA projects that the
totalization agreement with Mexico would have a negligible effect on the long-range
actuarial balance of the Social Security trust funds.50
GAO found that “the cost of a totalization agreement with Mexico is highly
uncertain,” even more so than for previous agreements, because of the large number
of unauthorized immigrants from Mexico estimated to be living in the United States.
According to GAO’s assessment, the base used for the number of initial new
beneficiaries in Mexico under a totalization agreement (50,000) does not take into
account the “estimated millions of current and former unauthorized workers and
49 GAO-03-1035T, p. 2.
50 SSA’s March 2003 cost estimate of a totalization agreement with Mexico (and GAO’s
evaluation) do not incorporate the effects of P.L. 108-203 (discussed above). However, SSA
has stated that the cost estimate is still appropriate following enactment of the work
authorization requirement in P.L. 108-203. To clarify, SSA projects that an additional
50,000 workers and an additional 17,000 dependents and survivors would receive totalized
benefits under the agreement by the end of the first five years.

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family members from Mexico and appears small in comparison with those
estimates.”51 Furthermore, GAO points out that the cost estimate does not take into
account the potential change in behavior by Mexican citizens under a totalization
agreement. GAO notes that an agreement could provide an additional incentive for
unauthorized workers from Mexico to come to the United States.
In regard to the number of unauthorized immigrants from Mexico currently
living in the United States, GAO cites a range of estimates. For example, the Pew
Hispanic Center estimates the number to be between 3.4 and 5.7 million, while the
Urban Institute estimates the number to be more than 4 million. The federal
government estimates that there are about 5 million unauthorized immigrants from
Mexico living in the United States (as of January 2000) and that the number is
expected to increase by 240,000 each year. According to federal government
statistics, unauthorized immigrants from Mexico make up an estimated 69% of
unauthorized immigrants in the United States. By comparison, the number of
unauthorized U.S. immigrants from all of the other totalization countries combined
is estimated at less than 3%.
In regard to the potential number of former unauthorized workers who have
returned to Mexico, GAO points out that fewer than one-third of immigrants from
Mexico stay in the United States for more than 10 years, the minimum number of
years of Social Security-covered earnings generally needed to qualify for Social
Security retirement benefits. Given the limited information regarding the age, work
history, Social Security coverage and number of dependents of these former
unauthorized workers, the potential cost of a totalization agreement with Mexico is
considered even more difficult to predict.
As mentioned previously, the SSA cost estimate shows that a totalization
agreement with Mexico would have a negligible effect on the long-range actuarial
balance of the Social Security trust funds. However, a sensitivity analysis performed
by SSA at GAO’s request shows that a 25% or more increase in the number of initial
new beneficiaries (i.e., 13,000 or more above the base estimate of 50,000) would
result in a measurable impact on the long-range actuarial balance of the trust funds.
GAO found that error rates in estimating the number of initial new beneficiaries
under previous totalization agreements often exceeded 25%. Based on the large
number of unauthorized workers from Mexico in the United States, GAO considers
the estimated cost of a totalization agreement with Mexico more uncertain than cost
estimates for previous agreements. In its report, GAO states that “a totalization
agreement with Mexico is both qualitatively and quantitatively different than any
other agreement signed to date.”52
51 GAO-03-1035T, p. 2.
52 GAO-03-993, p. 17.

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SSA Comment on the GAO Report. The Social Security Commissioner
and SSA’s Office of the Chief Actuary provided written comments on a draft of the
GAO report. SSA disagreed with the GAO evaluation on a number of issues.53
Specifically, in regard to SSA’s estimate of the number of persons who initially
would receive totalized benefits under the agreement (50,000), SSA maintains that
the estimate is “based on the best available data and includes potential benefits for
both documented and undocumented workers in the U.S. in the past.”54 Furthermore,
SSA notes that the unprecedented six-fold increase in this number (300,000 by 2050)
takes into account recent increases in immigration and visas. SSA’s response
includes (but is not limited to) the following:
! Not all unauthorized Mexican workers work in Social Security-
covered jobs. Those who are employed on an unofficial basis (i.e.,
paid cash in the “underground economy”) do not qualify for benefits
(with or without a totalization agreement) because their earnings are
not reported for Social Security purposes. SSA notes that the
percentage of unauthorized workers who could become eligible for
benefits is more limited than GAO suggests, because GAO does not
include this group of workers in their discussion.
! GAO found that SSA’s proxy for the number of individuals who
initially would receive totalized benefits under the agreement (i.e.,
the number of Social Security recipients currently living in Mexico)
seems low and bears no direct relationship to the estimated number
of current and former unauthorized Mexican workers in the United
States and their family members. SSA maintains that this is a
reasonable proxy and points out that the 50,000 Social Security
recipients currently living in Mexico include Mexican citizens who
qualified for benefits based on unauthorized work in the United
States.
! GAO points out that the agreement could provide an additional
incentive for unauthorized Mexican workers to come to the United
States. In SSA’s view, this type of behavioral effect would be very
small. SSA contends that most Mexican citizens who come to the
United States. to work without authorization are young and more
likely to be motivated by current earnings than the prospect of future
Social Security retirement benefits.
! In evaluating whether the number of Social Security recipients
currently living in Mexico is a reasonable proxy for the number of
individuals who initially would receive totalized benefits under an
agreement with Mexico, SSA used comparison data for Canada, a
country with which the United States has had a totalization
agreement for 20 years, because it too is a NAFTA trading partner
and shares a border with the United States. By applying the same
53 The full text of SSA’s comments are provided in Appendix II of the GAO report.
54 GAO-03-993, p. 27.

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CRS-21
ratio of totalized to non-totalized (fully insured) Canadian
beneficiaries to the number of current non-totalized Mexican
beneficiaries, SSA came up with an estimate of 37,000 initial new
beneficiaries under the agreement and determined that the 50,000
proxy was reasonable. According to GAO, such comparisons
between Canada and Mexico are problematic because of the much
higher estimates of illegal immigration from Mexico. While SSA
acknowledges the large number of unauthorized Mexican citizens
estimated to be in the United States, it contends that these
individuals tend to be young and would become eligible for totalized
benefits well into the future. SSA points out that the purpose of the
Canada/Mexico comparison is to provide a current estimate of
totalized beneficiaries under an agreement with Mexico.
! GAO states that error rates associated with SSA’s projections of new
beneficiaries under previous agreements frequently have exceeded
25%. SSA acknowledges that for six of the 11 agreements that
became effective between 1985 and 1994, the number of individuals
receiving totalized benefits in the fifth year after implementation
exceeded their estimates. SSA further points out, however, that
estimates for recent agreements have been high. For example, SSA
overestimated the number of individuals receiving totalized benefits
for the four agreements that became effective between 1992 and
1994. Overall, for the 11 agreements, SSA estimates that their
projections have been within 3% of the actual number.
No-Match Letters
Over the past few years, a policy change at SSA which substantially increased
the number of “no-match” letters sent to employers has received much attention
because of the impact on unauthorized aliens. In 1993, SSA began sending no-match
letters to employers to inform them of a discrepancy between a W-2 form and SSA’s
records. Importantly, as discussed above, receipt of a no-match letter does not imply
that the employee is using a fraudulent SSN; the discrepancy could be the result of
a clerical error. For tax years 1993 through 2000, an employer received no-match
letters only if 10 or more employees had discrepancies and the number of employees
with mismatches equaled at least 10% of the employer’s workforce.55
For the 2001 tax year, SSA implemented a new policy of sending no-match
letters to every employer with at least one employee with discrepancies on their W-2.
For tax year 2000,56 SSA sent out approximately 110,000 no-match letters57
55 “Social Security No-Match Letter,” Interpreter Releases, vol. 80, April 7, 2003, pp. 508-
509.
56 No-match letters for tax year 2000 are sent in calendar year 2001.
57 “Social Security No-Match Letter,” Interpreter Releases, vol. 80, April 7, 2003, p. 508.

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compared to approximately 950,000 for tax year 2001.58 Employers are not required
to respond to or act on the letters; however, under the INA employers are subject to
penalties for hiring or retaining unauthorized alien workers.59 Additionally, the
Internal Revenue Service can penalize employers for providing incorrect information
on wage forms (W-2’s).60
SSA maintained that the letters were sent to employers to ensure that workers
are properly credited with their earnings, and to combat identity fraud. Because of
the controversy surrounding the increase in the number of no-match letters, SSA
currently sends a no-match letter to an employer only if 10 or more employees have
discrepancies and the number of employees affected equals at least 0.5% of the
employer’s workforce. In 2005, SSA sent 127,652 no-match letters for tax year
2004.61
Some argue that SSA should not reduce the number of no-match letters that are
sent to employers. They contend that SSA should coordinate with other agencies to
locate unauthorized alien workers, and that no-match letters can be a tool to help
reduce the unauthorized population in the United States. Additionally, the no-match
letters may help employers who do not know that the employees’ documents are
fraudulent but would be liable if they were caught employing unauthorized aliens.
Others contend that SSA has no immigration-related enforcement powers, and
it is not SSA’s job to enforce laws. In addition, immigration advocates contend that
tens of thousands of immigration aliens left their jobs or were fired as a result of the
letters.62 They argue that no-match letters do little to combat unlawful employment
as those who use false documents simply find employment in another company,
increasing the risk of workplace exploitation. Additionally, they contend that some
firms may have experienced a loss of revenue caused by worker shortages or by
terminated employees who do not have employment authorization moving to
competitors. The letters also raised concerns that employers were discriminating
based on alienage (i.e., that an employer who received a no-match letter for a
noncitizen would fire the noncitizen worker without ascertaining if they have
employment authorization).
Proposed No-Match Regulation. On June 14, 2006, the Department of
Homeland Security published a proposed rule that would amend the regulations
relating to the unlawful hiring or continued employment of aliens who lack work
authorization.63 The regulation would create “safe-harbor” procedures for employers
58 Mary Beth Sheridan, “Social Security Scales Back Worker Inquiries,” Washington Post,
June 18, 2003, p. A6. No-match letters for tax year 2001 are sent in calendar year 2002.
59 INA § 274A.
60 26 U.S.C. § 6647.
61 Unpublished data from SSA.
62 Sheridan, “Social Security Scales Back Worker Inquiries.”
63 Department of Homeland Security, “Safe-Harbor Procedures for Employers Who Receive
(continued...)

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CRS-23
who receive a no-match letter to follow to ensure that DHS would not find that the
employer had constructive knowledge that the employer had hired or was continuing
to employ an alien who lacked work authorization (i.e., had violated §274A of the
Immigration and Nationality Act). Under the proposed rule, the employer would
have to take reasonable steps, within 14 days of receipt of the no-match letter, to
resolve the discrepancy. These steps could include checking record for clerical errors
and, if such errors are found, informing SSA of the correct information; or asking the
employee to confirm the name and SSN, and if they are correct, requesting that the
employee resolve the discrepancy with SSA.
Legislation in the 110th Congress Related to No-Match Letters. On
January 4, 2007, Representative Gallegly introduced H.R. 138, the Employment
Eligibility Verification and Anti-Identity Theft Act. H.R. 138 would require SSA
to send a no-match letter to any employer who submits a combination of a name and
SSN that does not match SSA records. The bill would also mandate that the
Secretary of Homeland Security, in consultation with the Commissioner of SSA,
establish a verification system through which employers who receive no-match letters
can verify an individual’s identity and employment authorization. Beginning six
months after enactment, employers would be required to verify an individual’s
identity and employment authorization through the newly created verification system
within three business days of receiving a no-match letter. If the employer receives
a nonconfirmation of the employee’s identity and employment authorization, the
employer would be required to notify the employee in writing within one day, and the
burden would be on the employee to resolve any error in the verification mechanism
within 30 days. After 30 days, the employer would be required to attempt to verify
the employee’s information, and if the employer receives another nonconfirmation,
terminate the employee’s employment.
On March 21, 2007, Representative Myrick introduced H.R. 1627, the Social
Security Number Fraudulent Use Notification Act of 2007. H.R. 1627 would require
the Commissioner of Social Security to notify an individual in writing in cases in
which an individual’s Social Security number is associated with a wage record
provided to SSA by an employer (on behalf of an employee) and the information
does not match relevant records maintained by SSA. The Commissioner would also
be required to provide written notification in cases in which an individual’s Social
Security number is otherwise used in a fraudulent manner.
63 (...continued)
a No-Match Letter,” 71 Federal Register 34281, June 14, 2006. The comment period ended
on August 14, 2006.

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CRS-24
Legislation in the 110th Congress
This section includes legislation that would directly alter the treatment of a
noncitizen’s earnings for Social Security eligibility and benefit computation
purposes.64 Legislation that may indirectly affect a noncitizen’s eligibility for Social
Security benefits (such as comprehensive immigration reform legislation or, for
example, legislation that would establish enhanced Social Security cards or new
employment eligibility verification systems) is addressed in other CRS reports.
H.R. 190: Social Security for Americans Only Act of 2007
Under H.R. 190, introduced by Representative Paul on January 4, 2007, Social
Security-covered earnings paid to noncitizens after December 31, 2007, would not
be counted for Social Security purposes.65 Thus, all noncitizens — those who are
authorized to work in the United States as well as those who work without
authorization — would be ineligible for future Social Security benefits unless they
have insured status as of December 31, 2007, or they obtain U.S. citizenship and
subsequently gain additional earnings credits under Social Security.
In addition, H.R. 190 would terminate all existing Social Security “totalization”
agreements between the United States and foreign countries. The bill would
authorize new “international” agreements for the purpose of “resolving questions of
entitlement to, and participation in, the Social Security system established by [Title
II of the Social Security Act] and the Social Security system of such foreign country.”
These international agreements would be required to take into account the restriction
on earnings credits for noncitizens beginning in 2008, as specified in the legislation.
H.R. 190 could have important implications for the financial status of the Social
Security system, as well as for workers and their families in terms of eligibility and
benefit levels. Much of the effect would depend on details that are not specified in
the legislation, such as whether noncitizens who would be ineligible to receive Social
Security benefits in the future would continue to pay Social Security payroll taxes.
In addition, it is not known whether other countries would respond in a similar
manner by prohibiting U.S. citizens who had worked and paid into a foreign Social
Security system from receiving benefits under that system.
64 The treatment of unauthorized earnings for Social Security purposes under current law
was established under the Social Security Protection Act of 2004 (P.L. 108-203). For more
information, see the section of the report titled “Social Security Protection Act of 2004.”
65 Rep. Paul introduced similar legislation in the 108th Congress (H.R. 489) and the 109th
Congress (H.R. 858). This bill is also similar to H.R. 5211 introduced by Rep. Paul in the
109th Congress.

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CRS-25
H.R. 332
H.R. 332, introduced by Representative Carter on January 9, 2007,66 would
exclude the earnings of noncitizens who are not authorized to work in the United
States from being counted for Social Security purposes.67 The exclusion would apply
to all such wages and self-employment income earned before, on, or after the date
of enactment. The bill would require the Commissioner of Social Security to
recompute benefits to the extent necessary to carry out such amendments
(adjustments in benefit payments would apply on a prospective basis).
Because H.R. 332 would prevent aliens from being paid Social Security benefits
based on unauthorized earnings in the United States, it could be argued that the bill
would prevent individuals who violated immigration law from being “rewarded” for
their improper behavior, noting that potential eligibility for Social Security benefits
(for themselves and their family members) may make illegal migration more
attractive.68 Others contend that, because Social Security is an earned entitlement,
workers who pay into the system should receive benefits regardless of their
immigration status. Like H.R. 190 (discussed above), H.R. 332 could have an
important impact on the financial status of the Social Security system and on current
and future recipients. Much of the effect would depend on details that are not
specified in the legislation.
S.Amdt. 152 to H.R. 2 (Fair Minimum Wage Act of 2007)
On January 23, 2007, Senator Ensign offered an amendment to H.R. 2, the Fair
Minimum Wage Act of 2007, that would tighten restrictions on the use of
unauthorized earnings for purposes of qualifying for Social Security benefits. Under
the amendment, all individuals (citizens and noncitizens) who are assigned a valid
Social Security number on or after the date of enactment of H.R. 2 would be allowed
to count only the earnings credits obtained after assignment of a valid SSN toward
insured status under the Social Security program (i.e., any past unauthorized earnings
66 This legislation is similar to H.R. 1438 ( introduced by Rep. Rohrabacher) and H.R. 4313
(introduced by Rep. Hunter) in the 109th Congress. Likewise, S. 2117, introduced by
Senator Inhofe in the 109th Congress, included a provision that would have required
noncitizens to have a valid Social Security number and authorization to work in the United
States at the time work is performed in covered employment for earnings credits to count
toward insured status under the Social Security program (i.e., any earnings credits obtained
while working without a valid SSN and work authorization would not count for purposes
of establishing eligibility for Social Security benefits). This provision would have applied
to noncitizens who file an application for benefits based on a Social Security number
assigned on or after January 1, 2004.
67 As discussed above, an alien may be authorized to be in the United States, but not
authorized to work.
68 Testimony of Matthew James Reindl, Stylecraft Interiors Inc., before the Subcommittee
on Immigration, Border Security, and Claims of the Committee on the Judiciary, U.S. House
of Representatives, New Jobs in Recession and Recovery: Who Are Getting Them and Who
Are Not? hearing, 109th Cong., 2nd sess. (May 4, 2005), at [http://judiciary.house.gov/
media/pdfs/reindl050405.pdf], visited June 22, 2007.

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CRS-26
would not count for purposes of establishing eligibility for Social Security benefits
and determining the amount of benefits payable on a worker’s earnings record).69
The amendment was withdrawn prior to Senate passage of H.R. 2 by a vote of 94-3
on February 1, 2007.
H.R. 709: Total Overhaul of Totalization
Agreements Law of 2007
H.R. 709, introduced by Representative Gallegly on January 29, 2007, would
exclude the earnings of noncitizens who are not authorized to work in the United
States from being counted for Social Security purposes, among other provisions.
Like H.R. 332 (discussed above), the exclusion would apply to all such wages and
self-employment income earned before, on, or after the date of enactment. The bill
would require the Commissioner of Social Security to recompute benefits to the
extent necessary to carry out such amendments (adjustments in benefit payments
would apply on a prospective basis).
Social Security Provisions in the
Comprehensive Immigration Reform Bills in the Senate
S.Amdt. 1150, the bipartisan compromise proposal for immigration reform, was
proposed by Senator Kennedy as an amendment in the nature of a substitute to the
Comprehensive Immigration Reform Act of 2007 (S. 1348). S. 1348, which was
introduced by Senate Majority Leader Reid as the marker for Senate debate on
comprehensive immigration reform, is based on S. 2611, as passed by the Senate in
the 109th Congress. The Senate began consideration of S.Amdt. 1150 to S. 1348 in
late May 2007. After several failed cloture votes, the measure was withdrawn from
Senate floor debate on June 7, 2007.
S. 1639, introduced by Senator Kennedy on June 18, 2007, was placed on the
Senate calendar on June 19, 2007. It is expected to be debated on the Senate floor
the week of June 25, 2007. The bill reportedly is based on, but not identical to,
S.Amdt. 1150 to S. 1348, as amended.
S. 1639 and S.Amdt. 1415 to the Comprehensive Immigration
Reform Act of 2007 (S.Amdt. 1150 to S. 1348). On June 6, 2007, Senator
Hutchison offered an amendment (S.Amdt. 1415) to the Comprehensive Immigration
Reform Act of 2007 (S.Amdt. 1150 to S. 1348) that would restrict earnings credits
based on work performed without authorization in 2004 or later, with respect to
individuals who are assigned an SSN in 2004 or later. The Senate agreed to the
Hutchison amendment by a voice vote, on June 6, 2007. The same language is
included in S. 1639, as introduced.
69 This amendment is similar to S.Amdt. 3985 to S. 2611, the Comprehensive Immigration
Reform Act of 2006, in the 109th Congress. Following floor debate, the Senate approved a
motion to table the amendment by a vote of 50-49, preventing a direct vote on the substance
of the measure. S. 2611 was passed by the Senate on May 25, 2006. No further action was
taken on the bill.

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CRS-27
Individuals Assigned an SSN in 2004 or Later. Under S. 1639, with
respect to an individual who is not a natural-born United States citizen, no quarter of
coverage would be credited for 2004 or later (for insured status and benefit
computation purposes) unless the individual was authorized to work in the United
States at the time, as determined by the Social Security Administration (SSA) based
on information provided by the Department of Homeland Security (DHS). S. 1639
would not restrict earnings credits for unauthorized work performed before 2004.
Individuals Assigned an SSN Before 2004. S. 1639 would maintain the
current-law treatment of unauthorized earnings with respect to individuals who were
assigned an SSN before 2004.70 Individuals who were assigned an SSN before 2004
would not be required to have work authorization at any point to qualify for Social
Security benefits. All Social Security-covered earnings would be credited for
purposes of gaining insured status under the program and computing benefits,
regardless of an individual’s work authorization status.
Determining Creditable Quarters of Social Security Coverage.
Under S. 1639, DHS would be required to provide information regarding an
individual’s work authorization status during periods of Social Security-covered
employment to SSA for purposes of determining an individual’s creditable quarters
of coverage. DHS and SSA would be required to enter into an agreement for this
purpose no later than 180 days after enactment.
Effective Date. The new rules for individuals assigned an SSN in 2004 or
later would be effective with respect to benefit applications filed on or after 180 days
after enactment of S. 1639.
S.Amdt. 1195 to the Comprehensive Immigration Reform Act of
2007 (S.Amdt. 1150 to S. 1348). On May 24, 2007, Senator Ensign offered an
amendment (S.Amdt. 1195) to the Comprehensive Immigration Reform Act of 2007
(S.Amdt. 1150 to S. 1348) that would tighten restrictions on the use of unauthorized
earnings for purposes of qualifying for Social Security benefits. The amendment is
substantively the same as the amendment offered by Senator Ensign to the Fair
Minimum Wage Act of 2007 (S.Amdt. 152 to H.R. 2) described above. Senator
Ensign offered a number of other Social Security-related amendments to the
Comprehensive Immigration Reform Act of 2007 that would restrict earnings credits
based on work performed before an individual is assigned a valid SSN or work
performed during any period without authorization. No action was taken on the
amendments before the measure was withdrawn from floor debate on June 7, 2007.
S.Amdt. 1847 to S. 1639. On June 21, 2007, Senator Ensign offered an
amendment (S.Amdt. 1847) to S. 1639 that would tighten restrictions on the use of
unauthorized earnings for purposes of qualifying for Social Security benefits.
S.Amdt. 1847 would specify that all individuals (citizens and noncitizens) who are
assigned a valid Social Security number on or after the date of enactment of S. 1639
would be allowed to count only the earnings credits obtained after assignment of a
70 For information on the treatment of unauthorized earnings for Social Security purposes
under current law, see the report section titled “Social Security Protection Act of 2004.”

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CRS-28
valid SSN toward insured status under the Social Security program (i.e., any past
unauthorized earnings would not count for purposes of establishing eligibility for
Social Security benefits and determining the amount of benefits payable on a
worker’s earnings record).71 In addition, with respect to an individual who is not a
natural-born U.S. citizen, no quarter of coverage would be counted toward qualifying
for a benefit unless the Social Security Commissioner, based on information provided
by the Secretary of Homeland Security, determines that the individual had work
authorization during that quarter. S.Amdt. 1847 would require the Secretary of
Homeland Security to enter into an agreement with the Social Security
Commissioner, within 180 days after enactment of S. 1639, to provide the
information needed to administer this provision. The amendment would be effective
upon enactment of S. 1639.
71 This provision is similar to S.Amdt. 3985 to S. 2611, the Comprehensive Immigration
Reform Act of 2006, in the 109th Congress. Following floor debate, the Senate approved a
motion to table the amendment by a vote of 50-49, preventing a direct vote on the substance
of the measure. S. 2611 was passed by the Senate on May 25, 2006. No further action was
taken on the bill.

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CRS-29
Appendix A: Exception Countries
The following country lists, which are subject to change periodically, are taken
from the Code of Federal Regulations (C.F.R., revised through April 1, 2002) and
the Social Security Administration’s International Program web page.
Social Insurance or Pension System Countries
The following countries meet the “social insurance or pension system”
exception in Section 202(t)(2) of the Social Security Act:
Antigua and Barbuda, Argentina, Austria, Bahamas, Barbados, Belgium, Belize,
Bolivia, Brazil, Burkina Faso (formerly Upper Volta), Canada, Chile, Colombia,
Costa Rica, Cyprus, Czechoslovakia, Denmark, Dominica, Dominican Republic,
Ecuador, El Salvador, Finland, France, Gabon, Grenada, Guatemala, Guyana,
Iceland, Ivory Coast, Jamaica, Liechtenstein, Luxembourg, Malta, Mexico,
Monaco, Netherlands, Nicaragua, Norway, Panama, Peru, Philippines, Poland,
Portugal, San Marino, Spain, St. Christopher and Nevis, St. Lucia, Sweden,
Switzerland, Trinidad and Tobago, Trust Territory of the Pacific Islands
(Micronesia), Turkey, United Kingdom, Western Samoa, Yugoslavia, Zaire
(20 C.F.R. § 404.463)
Treaty Obligation Countries
The following countries meet the “treaty obligation” exception in Section
202(t)(3) of the Social Security Act:
Germany, Greece, Ireland, Israel, Italy, Japan, Netherlands*
(20 C.F.R. § 404.463)
*Treaties between the United States and the Netherlands preclude the application
of residency requirements for noncitizens with respect to monthly survivor
benefits only.
Totalization Agreement Countries
The following countries meet the “totalization agreement” exception in Section
202(t)(11)(E) of the Social Security Act. The effective date is shown for each
agreement.
Australia
October 1, 2002
Austria
November 1, 1991
Belgium
July 1, 1984
Canada
August 1, 1984
Chile
December 1, 2001
Finland
November 1, 1992
France
July 1, 1988
Germany
December 1, 1979
Greece
September 1, 1994
Ireland
September 1, 1993

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Italy
November 1, 1978
Japan
October 1, 2005
South Korea
April 1, 2001
Luxembourg
November 1, 1993
Netherlands
November 1, 1990
Norway
July 1, 1984
Portugal
August 1, 1989
Spain
April 1, 1988
Sweden
January 1, 1987
Switzerland
November 1, 1980
United Kingdom
1985/1988*
* Provisions that eliminate double taxation became effective January 1, 1985;
provisions that allow persons to use work in both countries to qualify for benefits
became effective January 1, 1988.
Note: Agreements with Austria, Belgium, Germany, Sweden and Switzerland
permit the individual to receive benefits as a dependent or survivor while a
resident in those countries only if the worker is a U.S. citizen or a citizen of the
country of residence.
A description and the complete text of each agreement are available on SSA’s
website at [http://www.ssa.gov/international/agreement_descriptions.html],
visited June 22, 2007.

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CRS-31
Appendix B: Definition of “Lawfully Present”
The following is the definition of the term “lawfully present” aliens for purposes
of applying for Title II Social Security benefits under P.L. 104-193 (the Personal
Responsibility and Welfare Reform Act) as defined in 8 C.F.R. § 103.12.
An alien who is lawfully present in the United States includes:
(1) A “qualified alien” as defined by the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (PRWORA);72
(2) An alien who has been inspected and admitted to the United States and who
has not violated the terms of his status;
(3) An alien who has been paroled73 into the United States pursuant to Section
212(d)(5) of the act for less than one year, except: (i) Aliens paroled for deferred
inspection or pending exclusion proceedings under Section 236(a) of the act; and (ii)
Aliens paroled into the United States for prosecution pursuant to 8 C.F.R.
§ 212.5(b)(3);
(4) An alien who belongs to one of the following classes of aliens permitted to
remain in the United States because the Attorney General has decided for
humanitarian or other public policy reasons not to initiate deportation or exclusion
72 PRWORA created the term “qualified alien,” a term which does not exist in immigration
law, to encompass the different categories of noncitizens who were not prohibited by
PRWORA from receiving federal public benefits. Qualified aliens (noted in P.L. 104-193
§ 431; 8 U.S.C. § 1641) are defined as:
(1) Legal Permanent Residents (an alien admitted for lawful permanent residence
(LPRs));
(2) refugees (an alien who is admitted to the United States under § 207 of the
Immigration and Nationality Act (INA));
(3) asylees (an alien who is granted asylum under INA § 208);
(4) an alien who is paroled into the United States (under INA § 212(d)(5)) for a
period of at least one year;
(5) an alien whose deportation is being withheld on the basis of prospective
persecution (under INA § 243(h) or § 241(b)(3));
(6) an alien granted conditional entry pursuant to INA § 203(a)(7) as in effect prior
to April 1, 1980; and
(7) Cuban/Haitian entrants (as defined by P.L. 96-422).
For a discussion of the different categories of noncitizens, see CRS Report RS20916,
Immigration and Naturalization Fundamentals, by Ruth Ellen Wasem. Additionally,
victims of trafficking (T-visa holders) are treated as refugees for the purpose of receiving
benefits.
73 “Parole” is a term in immigration law which means that the alien has been granted
temporary permission to enter and be present in the United States. Parole does not
constitute formal admission to the United States and parolees are required to leave when the
parole expires, or if eligible, to be admitted in a lawful status.

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CRS-32
proceedings or enforce departure: (i) Aliens currently in temporary resident status
pursuant to Section 210 or 245A of the INA; (ii) Aliens currently under Temporary
Protected Status (TPS);74 (iii) Cuban-Haitian entrants, as defined in Section 202(b)
P.L. 99-603, as amended; (iv) Family Unity beneficiaries pursuant to Section 301 of
P.L. 101-649, as amended; (v) Aliens currently under Deferred Enforced Departure
(DED); (vi) Aliens currently in deferred action status pursuant to Service Operations
Instructions at OI 242.1(a)(22); (vii) Aliens who are the spouse or child of a United
States citizen whose visa petition has been approved and who have a pending
application for adjustment of status;
(5) Applicants for asylum and applicants for withholding of removal under
Section 241(b)(3) of the act or under the Convention Against Torture who have been
granted employment authorization, and such applicants under the age of 14 who have
had an application pending for at least 180 days.
An alien may not be deemed to be lawfully present solely on the basis of the
Service’s decision not to, or failure to, issue an Order to Show Cause or solely on the
basis of the Service’s decision not to, or failure to, enforce an outstanding order of
deportation or exclusion.
74 For more information on TPS, see CRS Report RS20844, Temporary Protected Status:
Current Immigration Policy and Issues, by Ruth Ellen Wasem.

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