Us Mexico Totalization Agreement
Under these agreements, double coverage and double dues (taxes) for the same work are abolished. Agreements generally guarantee that you only pay social security contributions to one country. Recommendation: Given the potential impact of totalization agreements on social security trust funds, the Social Security Commissioner should improve future reports to Congress on proposed totalization agreements with other countries by making them more coherent and informative. These reports should include consistent periods for estimating the short- and long-term impact on the trust fund and, where appropriate, data on the potential impact of alternative assumptions or sensitivity analyses on potential costs and beneficiaries. Recommendation: Given the potential impact of totalisation agreements on social security trust funds, the Social Security Commissioner should set up a formal process to identify and assess the main risks associated with entering into agreements with other countries. Such a process should include mechanisms for assessing the integrity of a country`s data and pension records and documenting the range of SSA analyses. Totalization agreements promote international trade, protect benefits for people who have worked abroad, and eliminate double social security taxes paid by employers and their workers while working and residing in countries where social security systems are parallel. As Mexicans are thought to account for a large portion of the millions of unauthorized workers in the United States, a totalization agreement with Mexico has raised concerns that they would be eligible for social benefits again. In order to shed light on the potential impact, the GAO was asked to describe (1) the processes of the Social Security Administration (SSA) for the development of the agreement with Mexico, (2) to explain how the agreement could have an impact on the payment of benefits to Mexican citizens and (3) to assess the cost of such an agreement. The United States currently has social security agreements with Canada, Chile, South Korea, Australia and most of Western Europe. TSCL is concerned about the financial impact that a totalization agreement with Mexico would have on social security, because millions of people have worked there illegally.