An additional paragraph was appended to the Final Protocol as paragraph 9, more than nine months after the signing of the Final Protocol in February 1982.
(1) Articles 10 and 11 of the U.S.-Belgian social security agreement of February 19, 1982 provided for the computation of U.S. totalization benefits in the same manner established in the other U.S. social security agreements then in force. Under this method, when a person qualified for U.S. benefits on the basis of combined U.S. and foreign periods of coverage, a theoretical benefit amount was determined by combining the person’s U.S. and foreign earnings records. The combined earnings (indexed if the worker qualified for a computation based on average indexed monthly earnings (AIME)) were averaged over the number of months in the worker’s benefit computation years. These were generally the years from 1951 or, if later, the year of attainment of age 22, up to the year the worker reached age 62, became disabled, or died, disregarding 5 years of low earnings in retirement or survivors cases, and zero to 5 years in disability cases. The theoretical benefit amount was determined by applying the regular U.S. national benefit formula to the person’s average monthly earnings (AME) or, where appropriate, the person’s AIME, which was derived on the basis of combined earnings records. The theoretical benefit was then reduced to reflect the fact that the person worked only part of his or her career under the U.S. system. Thus, the benefit that was actually payable equaled the theoretical benefit amount multiplied by the ratio of U.S. periods of coverage to total periods of coverage under the programs of the United States and the other agreement country.
Each country, including Belgium, with which SSA discussed the possibility of concluding a social security agreement expressed concern over the need to furnish the United States with detailed data on a worker’s earnings under its system. Furnishing this information, which might not even be used under the system of the country providing it, was administratively burdensome. SSA experienced long delays in obtaining foreign earnings information in some cases. Converting foreign earnings into equivalent U.S. dollar amounts and manipulating it in the U.S. benefit computation proved to be a laborious operation, which by its nature was time-consuming and prone to error. The length of time needed to obtain foreign earnings information resulted in long delays in awarding U.S. totalization benefits in a significant number of cases.
In addition, prorating benefit amounts based on the ratio of U.S. periods to total periods in both countries could result in individuals with the same date of birth and the same average earnings and coverage under the U.S. system receiving significantly different U.S. totalization benefit amounts depending upon the amount of their covered work under the foreign system. Although the additional foreign coverage, by increasing the denominator of the pro rata ratio, would generally reduce the amount of U.S. totalization benefits, it might or might not result in a compensating increase in the amount of foreign benefits, depending on the computation method used by the foreign country.
SSA worked to develop a new method of computing U.S. totalization benefits that would not require information on foreign earnings and thus would avoid the problems connected with the then-current computation method. The regulations that specified the then-current method had to be revised to authorize the new method. Under that new method, Belgian social security coverage was combined with U.S. coverage to establish entitlement to a U.S. totalization benefit, but Belgian earnings were not considered in computing the amount of the benefit. Only the worker’s earnings and periods of coverage under the U.S. Social Security program were taken into account.
Under this method, the theoretical benefit amount was based on the worker’s U.S. earnings or, where appropriate, indexed earnings averaged over the period he or she actually worked under the U.S. system, rather than over all the worker’s benefit computation years, as under the prior method. The theoretical benefit amount was computed by applying a regular U.S. national benefit formula to the worker’s AME or AIME so derived. The benefit actually payable was determined by multiplying the theoretical benefit amount by the ratio of the worker’s U.S. quarters of coverage to the number of calendar quarters in a period generally equal to the worker’s benefit computation years.
Under this method, the theoretical benefit approximates the benefit amount to which the worker would have been entitled had he or she worked a full lifetime under the U.S. system at the same relative earnings level as during his or her actual periods of U.S. coverage. The pro rata benefit that is payable reflects the portion of the worker’s coverage lifetime spent under the U.S. system.
This method is comparable to the computation methods used by most Western industrialized countries which compute totalization benefits based only on earnings credited under their own social security systems. It greatly expedites the processing of claims by SSA since the time-consuming process of securing foreign earnings records is eliminated. Since the theoretical benefit is prorated without regard to the length of the worker’s foreign coverage, U.S. totalized benefit amounts are the same for all individuals with the same date of birth and the same average earnings and coverage periods under the U.S. system.
This Additional Protocol revised the U.S.-Belgian Agreement of February 19, 1982 to permit the United States to apply the alternative computation method. By concluding the Additional Protocol before the alternative computation method was incorporated in U.S. regulations, it was possible to save considerable negotiating time and expense and to avoid the administrative complications of implementing the new computation method after the principal Agreement had already entered into force. The language of Article 1 of the Additional Protocol was drafted in general terms to allow some flexibility in development of the U.S. regulations and to allow use of the prior method if, for some unforeseen reason, the proposed new method was not adopted or the promulgation of the regulatory revision was long delayed. Ultimately, the alternative computation method was adopted immediately on entry into force of the U.S.-Belgian Agreement, and is the method currently in use under all U.S. international social security agreements. It is described in the U.S. Code of Federal Regulations at 20 CFR 404.1918 (49 FR 29775, July 24, 1984).
(2) The Additional Protocol entered into force on the same date as the principal Agreement and will remain in effect for the same period as the principal Agreement.