Working for a Foreign Employer Abroad May Earn You US Social Security Credit

OCONUS

 

ASK THE GENERAL COUNSEL

Security Clearance Attorney Sean M. Bigley represents clients worldwide in security clearance denials and revocations. He is a former investigator for the U.S. Office of Personnel Management. For more information, please visit www.bigleylaw.com.

One of the aspects I most enjoy about security clearance law is that it encompasses so many other areas. There is always something new to learn.

Recently, I had the opportunity to defend a U.S. government contractor working in Japan. One of the foreign influence issues outlined on the client’s Statement of Reasons – the preliminary notice to the client regarding the government’s security concerns – was that his prior history of working for Japanese companies in Japan rendered him eligible for Japanese social security benefits upon his retirement. The U.S. government’s argument was that this entitlement could be leveraged against our client by the Japanese government, making him more susceptible to coercion by foreign agents.

This argument, in various forms, is the same one we encounter in all foreign influence cases, no matter the country at issue. Yet in most cases, the foreign financial asset is something like a bank account or investment that the clearance holder can easily sell, transfer, or liquidate. Not so here. So, what is a globe-trotting security clearance holder to do?

Social Security Reciprocity

As it turns out, the U.S. government has Social Security reciprocity agreements in place with numerous foreign countries. Some of these agreements have been in place since the 1970’s; others were entered into as recently as last year. You can find the entire list and their effective dates here. There are some extremely complicated nuances, particularly for people who are dividing their careers across more than two countries. However, the general principle behind reciprocity agreements is to eliminate dual-taxation situations where an employee’s wages are taxed for social security benefits both by his country of citizenship and his country of residence. The agreements also help “fill gaps in benefit protection for workers who have divided their careers between the United States and another country.” (SSA Website).

As I learned through this case, perhaps the most significant and likely unintended benefit of social security reciprocity agreements inures to security clearance holders. That is because a clearance-holder with a work history in a covered country can ultimately choose the country in which he or she wants to actually take the benefits: the country of citizenship or the country where the benefits were earned. In other words, my client was able to eliminate the foreign influence risk by showing that he can, as a matter of law, transfer the benefits he earned in Japan here to the United States upon his retirement.

That’s something worth remembering if you ever work(ed) overseas.

 

This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation. 

Security Clearance Attorney Sean M. Bigley represents clients worldwide in security clearance denials and revocations. He is a former investigator for the U.S. Office of Personnel Management. For more information, please visit www.bigleylaw.com