US Social Security and French pensions: the US-France agreement

Americans who work in France run into two social security systems at once. Without coordination, you could pay into both on the same earnings, and short careers in each country might not qualify for a pension in either. The United States and France signed a totalization agreement to solve both problems. The Social Security Administration (SSA) states that the agreement has been in force since July 1, 1988. This guide explains what it does, using the SSA's own description of the agreement.

What the agreement covers on the French side

The SSA lists a broad set of French programs covered by the agreement, including the general social insurance system for employees, occupational accident and illness insurance, family benefits, and sickness and maternity insurance. That breadth has a consequence that surprises many people.

The SSA warns that French social security taxes also fund France's national health insurance. A worker exempted from paying French social security taxes under the agreement therefore cannot receive free health care services or other benefits under the French health insurance system. If you stay on US coverage while working in France, you need private health insurance.

Employees: the detached worker rule

The general principle is that you pay into the system of the country where you work. The main exception is for employees sent temporarily abroad by their employer. The IRS explains the general rule in US totalization agreements: an American sent to a foreign country for five years or less to work for the same US-based employer generally remains covered by US Social Security, and someone sent for longer than five years pays social security taxes to the foreign country.

To prove the exemption, the US employer requests a certificate of coverage from the SSA before or at the start of the assignment. The certificate is what you show the French authorities.

If instead you are hired locally in France by a French employer, you pay French contributions and do not pay US Social Security tax on that salary.

The self-employed

The SSA explains the self-employment rules for France separately:

• Self-employed people who work only in the US are covered by the US.
• Self-employed people who work only in France are covered by France.
• Self-employed people who normally work in the US but transfer their business activity to France for two years or fewer stay under US coverage.

For self-employed Americans settling in France for good, French coverage normally applies. Keep your certificate on file, because without it you may be asked to pay US self-employment tax on the same income.

French certificates when France covers you

When France is the covering country and you need to prove it to the US, the SSA explains that your employer in France requests a certificate of coverage, form SE-404-1 or SE-404-2, from the local French sickness insurance agency that collects your contributions. The request must include, among other items:

• Your full name, date and place of birth, and citizenship.
• Your country of permanent residence.
• Your French social security number, rather than your US number.
• Your date and country of hire, or the nature of your self-employment.
• The names and addresses of the employer in both countries.
• The dates of transfer and expected return.

For employees, the SSA also requires a statement signed by the employer certifying that you and family members living with you in France are covered by an employer-sponsored or other private health plan.

Combining credits for a US benefit

If you have enough US credits to qualify on your own, you receive a regular US benefit. If not, the agreement can help. The SSA states that you may qualify for a partial US benefit based on both US and French credits, but you must have at least six US credits, generally one and a half years of work, for the US to count your French credits.

French pensions

The SSA summarizes French pension rules. Under French law, a worker can qualify for an old-age pension with as little as one calendar quarter of contributions, but the amount is reduced for workers with fewer than 150 to 160 quarters, depending on year of birth. The SSA lists a full French pension at age 62 for workers with between 37.5 and 40 years of contributions, depending on year of birth.

Under the agreement, France computes your pension both on French credits alone and as a prorated benefit based on US and French credits, and pays the higher amount. For disability or survivors benefits, you need at least one year of coverage under the French system for US credits to count.

French retirement rules have changed several times in recent years, including the legal retirement age. For your own case, rely on the statement from the French pension fund rather than the summary figures.

How to claim

The SSA explains that if you live in the US, you can apply for US or French benefits at any US Social Security office, using form SSA-2490-BK (Application for Benefits Under a U.S. International Social Security Agreement). If you live in France, you can contact a French pension office, or the Federal Benefits Unit at the US Embassy in Paris, 4 Avenue Gabriel.

For information about French programs, the SSA points to CLEISS (cleiss.fr), the French center for European and international social security liaisons, or any French social security office.

Taxes on benefits

Social security coverage and income tax are separate questions. The agreement decides which system you pay into, not how your pension is taxed. US citizens remain subject to US tax on worldwide income, and the IRS sets out the residency and filing rules for taxpayers abroad. French tax rules on pensions apply once you are a French tax resident, and the US-France tax treaty sets out which country taxes which pension. Get advice that covers both systems before you start drawing benefits.

A checklist

• Before an assignment. Have the US employer request a certificate of coverage, and buy private health insurance.
• When hired locally. Confirm French contributions are deducted, and keep payslips as proof of quarters.
• Every few years. Check your US earnings record on my Social Security and your French career statement.
• At retirement. File with the country where you live, using form SSA-2490-BK for an agreement claim.

Common questions

Do I pay both US and French social security taxes? Generally no. The US-France agreement, in force since July 1, 1988, assigns coverage to one country, usually where you work, with an exception for temporary assignments.

Can I get French public health care if I stay on US Social Security? No. The SSA warns that a worker exempted from French social security taxes under the agreement cannot receive free French health care, so you need private insurance.

How many US credits do I need for totalization? At least six US credits, generally about one and a half years of work, before the US will count your French credits.

Which form do I use to claim benefits under the agreement? Form SSA-2490-BK, filed with a US Social Security office, or through the Federal Benefits Unit at the US Embassy in Paris if you live in France.