The original text of Paragraph 7(a) of the Final Protocol provided that under German law, receipt of a German social security benefit generally excludes a person from further coverage under the German social security system.  Paragraph 7(a) also provided that receipt of a corresponding U.S. benefit had the same effect under German law.  The German authorities found this provision difficult to administer and proposed its deletion and the introduction of the current wording of this paragraph under the first Supplementary Agreement, with the result that receipt of a Social Security benefit from the United States does not exclude a person from further coverage under the German social security system.  This change was intended to accommodate future amendments to German law regarding so-called “deemed periods of coverage” and supplements to the German orphan’s benefit (see the annotation to article 8.5).  Such legislative amendments were under active consideration by the German Government at the time of the first Supplementary Agreement.

Under German law, benefit amounts, in general, are directly proportional to the number of a worker’s actual years of coverage; however, supplements that are unrelated to a worker’s length of coverage may be added to the benefit in certain cases.  If a worker dies or becomes disabled before reaching age 55, the amount of survivors or disability benefits may be computed taking into account a deemed period of coverage from the date of death or disability onset to age 55.  In the case of orphan’s benefits, the benefit amount based on the worker’s length of coverage is increased by a flat-rate supplement which at the time of the first Supplementary Agreement equaled 152.90 DM (78.17 Euros*) per month for half orphans and 225.90 DM per month (115.50 Euros*) for full orphans.  These amounts do not reflect any benefit amount changes that might have applied in the period between October 2, 1986, when the first Supplementary Agreement was signed, and the present.  

Under article 8.4 and 8.5 of the original 1976 Agreement, the amount of disability and survivors benefits attributable to deemed periods of coverage and the amount of the supplement to the orphan’s pension are reduced by 50 percent if eligibility is based on totalization of U.S. and German periods of coverage.

Although the amount of the German child’s supplement and benefit amounts based on deemed periods of coverage are now independent of a worker’s length of German coverage, negotiators anticipated at the time of the first Supplementary Agreement that future amendments to German law would provide for a reduction in these amounts in cases where a worker has interruptions in his German coverage prior to retirement, death or disability onset.  This paragraph is intended to ensure that German benefit amounts which may be subject to any new reductions under German law will not also be subject to a 50-percent reduction under the U.S.-German social security Agreement