THE National Social Security Institute (NSSI) will start talks in 2005 on reaching an agreement with the US Social Security Administration that will handle the large number of Bulgarians working in the US, the chief actuary of NSSI Hristina Mitreva announced on November 16.
According to Mitreva, their US partners have already agreed to start the negotiations and even this can be considered as a success, because the US has pension agreements with only a few European countries.
The future document will settle issues like the extent of security coverage it will provide, the eligibility for US pension of adults who have worked in Bulgaria for part of their life, and aspects of disability pension eligibility. The agreement will also specify the social security laws of which country will apply to people whose adult lives have been split between the two states.
Ways will be sought for solving problems of Bulgarian citizens who become unemployed in the US and how will they be compensated by the respective authorities. In line with international practice, Bulgaria and the US will have to agree also on equal treatment of employees.
Currently, over 100 000 Bulgarians live and work in the US and some of them are eligible for security coverage in their home country. Lots of other Bulgarians are to join their families in the US. If they are retired in Bulgaria, NSSI will transfer their pension. However, there is no procedure in force if such people have also been employed in the US.
The agreement is also going to settle the state of the US citizens that work and reside in Bulgaria.
Another problem posed by bilateral agreements on pensions is the taxation. Usually, avoiding double taxation agreements make a distinction between pensions payable by governments to former employees and pensions payable by private employers. There are some variations between the agreements and not all agreements make this distinction and they vary in other ways so a person would need to check how exactly he or she is affected.
Most of them provide that pensions for non-governmental employees are taxed in the country of residence. So, if you a Bulgarian is living in the US and getting an occupational pension from Bulgaria, he or she should generally receive it gross and then pay tax on it in the US (if there is any tax on it).
The opposite is the case for pensions for former government employees - generally they are taxable only in the country where they are paid. So, if a person is a former employee of the US government for example, now living in Bulgaria, the tax should be paid on occupational pension in the USA only.
Despite the advanced stage of Bulgaria's European Union integration, the social security status of some 500 000 Bulgarians, who have migrated or taken temporary jobs in European countries is also to be settled. Sofia is yet to ratify the European Social Charter, which provides security coverage for medical care, sickness, maternity, unemployment, old age, on-the-job accidents, occupational diseases, death, invalidity, and family charges.
Bulgaria already provides security coverage for these risks but is yet to meet some specific requirements related to length of service, retirement age and the correlation between the minimum monthly wage and the pension amount.
According to Mitreva, their US partners have already agreed to start the negotiations and even this can be considered as a success, because the US has pension agreements with only a few European countries.
The future document will settle issues like the extent of security coverage it will provide, the eligibility for US pension of adults who have worked in Bulgaria for part of their life, and aspects of disability pension eligibility. The agreement will also specify the social security laws of which country will apply to people whose adult lives have been split between the two states.
Ways will be sought for solving problems of Bulgarian citizens who become unemployed in the US and how will they be compensated by the respective authorities. In line with international practice, Bulgaria and the US will have to agree also on equal treatment of employees.
Currently, over 100 000 Bulgarians live and work in the US and some of them are eligible for security coverage in their home country. Lots of other Bulgarians are to join their families in the US. If they are retired in Bulgaria, NSSI will transfer their pension. However, there is no procedure in force if such people have also been employed in the US.
The agreement is also going to settle the state of the US citizens that work and reside in Bulgaria.
Another problem posed by bilateral agreements on pensions is the taxation. Usually, avoiding double taxation agreements make a distinction between pensions payable by governments to former employees and pensions payable by private employers. There are some variations between the agreements and not all agreements make this distinction and they vary in other ways so a person would need to check how exactly he or she is affected.
Most of them provide that pensions for non-governmental employees are taxed in the country of residence. So, if you a Bulgarian is living in the US and getting an occupational pension from Bulgaria, he or she should generally receive it gross and then pay tax on it in the US (if there is any tax on it).
The opposite is the case for pensions for former government employees - generally they are taxable only in the country where they are paid. So, if a person is a former employee of the US government for example, now living in Bulgaria, the tax should be paid on occupational pension in the USA only.
Despite the advanced stage of Bulgaria's European Union integration, the social security status of some 500 000 Bulgarians, who have migrated or taken temporary jobs in European countries is also to be settled. Sofia is yet to ratify the European Social Charter, which provides security coverage for medical care, sickness, maternity, unemployment, old age, on-the-job accidents, occupational diseases, death, invalidity, and family charges.
Bulgaria already provides security coverage for these risks but is yet to meet some specific requirements related to length of service, retirement age and the correlation between the minimum monthly wage and the pension amount.
