But the US remained unimpressed. Now, to get the benefit of the social security schemes, one has to work ten years in the US.
A totalisation pact helps avoiding double taxation of income with respect to social security contributions. The money Indian workers lose in the absence of social security pact is huge. As per the estimates of the National Association of Software and Services Companies (NASSCOM), Indians on short-term work visa pay $1 billion annually for various social security schemes. Around 3 lakh Indians work in the US now. At present, residents of the US pay 6.2% social security taxes on salaries up to $106,800 and 1.45% medicare taxes.
“Countries like France and Germany, with whom US has a similar pact, had entered into a social security agreement with us. These countries also have social systems different from that of US,” said Indian sources. Incidentally, Japan and South Korea are the two countries US have social security pacts with in Asia.