Hungary-United States: Social Security Agreement (2015)

Social Security Agreement (2015)

This Treaty was signed on February 3, 2015 and entered into force on September 1, 2016.

AGREEMENT ON SOCIAL SECURITY BETWEEN THE GOVERNMENT OF HUNGARY AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA

The Government of Hungary and
The Government of the United States of America,

Hereinafter referred to as “the Contracting States,” being desirous of regulating the relationship between their two countries in the field of Social Security, have agreed as follows:

PART I: GENERAL PROVISIONS

Article 1. Definitions

1. For the purposes of this Agreement:

(a) “national” means,

as regards Hungary, natural persons who are considered nationals of Hungary, within the meaning of the law on Hungarian citizenship, and

as regards the United States, a national of the United States as defined in Section 101, Immigration and Nationality Act, as amended;

(b) “laws” means the laws and regulations specified in Article 2 of this Agreement;

(c) “Competent Authority” means,

as regards Hungary, the ministers, ministries or other relevant authorities responsible for social security schemes and systems regulated by the laws designated in Article 2 of this Agreement, and

as regards the United States, the Commissioner of Social Security;

(d) “agency” means,

as regards Hungary, the institution or the authority responsible for the implementation of the laws specified in the material scope (Article 2) of this Agreement, and

as regards the United States, the Social Security Administration;

(e) “liaison agencies” means the institution or institutions responsible for ensuring the coordination and exchange of information between the agencies of the two Contracting States and for maintaining relations for the purposes of implementing the Agreement;

(f) “period of coverage” means a period of payment of contributions or a period of earnings from employment or self-employment, as defined or recognized as a period of coverage by the laws under which such period has been completed, or any similar period insofar as it is recognized by such laws as equivalent to a period of coverage;

(g) “benefit” means,

as regards Hungary, any pension or any other cash benefit provided for in the laws specified in Article 2 of this Agreement, and

as regards the United States, any benefit provided for in the laws specified in Article 2 of this Agreement; and

(h) “personal data” means any information relating to a specific (identified or identifiable) person, as well as any information which can be used to distinguish or trace an individual’s identity. This includes, but is not limited to, the following: any individual identifier; citizenship, nationality, statelessness or refugee status; benefits, eligibility or other claims information; contact information; medical information or lay information used in a medical determination; information about marital, familial or personal relationships;; and information pertaining to work, financial or economic status.

2. Any term not defined in this Article shall have the meaning assigned to it in the applicable laws.

Article 2. Material Scope

1. For the purposes of this Agreement, the applicable laws are:

(a) as regards the United States, the laws governing the Federal old-age, survivors, and disability insurance program:

Title II of the Social Security Act and regulations pertaining thereto, except sections 226, 226A, and 228 of that title, and regulations pertaining to those sections, and

Chapters 2 and 21 of the Internal Revenue Code of 1986 and regulations pertaining to those chapters;

(b) as regards Hungary,

the laws concerning the insurance obligation and the payment of contributions covering social insurance benefits (pensions, health insurance, and unemployment), as well as the social insurance pension benefits and benefits for persons with changed working capacity.

2. Unless otherwise provided in this Agreement, the laws referred to in paragraph 1 of this Article shall not include treaties or other international agreements or supranational legislation on Social Security concluded between one Contracting State and a third State, or laws or regulations promulgated for their specific implementation.

3. Except as provided in the following sentence, this Agreement shall also apply to legislation which amends, supplements or consolidates the laws specified in paragraph 1. This Agreement shall apply to future legislation of a Contracting State which creates new categories of beneficiaries or new benefits under the laws of that Contracting State unless the Competent Authority of that Contracting State notifies the Competent Authority of the other Contracting State in writing within three months of the date of the official publication of the new legislation that no such extension of the Agreement is intended.

Article 3. Personal Scope

This Agreement shall apply to persons who are or have been subject to the laws specified in paragraph 1 of Article 2 of this Agreement, and to other persons deriving rights under those laws.

Article 4. Equality of Treatment and Portability of Benefits

1. A person who is or has been subject to the laws of one Contracting State and who resides in the territory of the other Contracting State, as well as the person’s dependents or survivors who reside in the territory of the other Contracting State, shall receive equal treatment with nationals of the other Contracting State in the application of the laws of the other Contracting State regarding entitlement to or payment of benefits.

2. Unless otherwise provided in this Agreement, any provision of the laws of a Contracting State which restricts entitlement to or payment of benefits solely because the person resides outside or is absent from the territory of that Contracting State shall not be applicable to persons who reside in the territory of the other Contracting State.

3. As regards Hungary, this Article shall not apply to benefits payable by virtue of agreements concluded between Hungary and third States that are based on the territorial principle.

PART II: PROVISIONS CONCERNING APPLICABLE LAWS

Article 5. Coverage Provisions

1. Except as otherwise provided in this Article, a person employed or self-employed within the territory of one of the Contracting States shall, with respect to that employment or self-employment, be subject to the laws of only that Contracting State. This shall also be applied if the place of business of the employer is in the territory of the other Contracting State.

2. Where a person who is normally employed in the territory of one Contracting State by an employer in that territory is sent by that employer to the territory of the other Contracting State for a temporary period, the person shall be subject to the laws of only the first Contracting State as if the person were employed in the territory of the first Contracting State, provided that the period of employment in the territory of the other Contracting State is not expected to exceed five years. For purposes of applying this paragraph in the case of an employee who is sent from the territory of the United States by an employer in that territory to the territory of Hungary, that employer and an affiliated company of the employer (as defined under the laws of the United States) shall be considered one and the same, provided that the employment would have been covered under United States laws absent this Agreement.

3. Paragraph 2 of this Article shall apply where a person who has been sent by his or her employer from the territory of a Contracting State to the territory of a third State, and who is compulsorily covered under the laws of that Contracting State while employed in the territory of the third State, is subsequently sent by that employer from the territory of the third State to work for that employer in the territory of the other Contracting State.

4. A person who is normally self-employed in the territory of one Contracting State and who temporarily transfers his or her self-employment activity to the territory of the other Contracting State shall be subject to the laws of only the first Contracting State, provided that the period of self-employment activity in the territory of the other Contracting State is not expected to exceed five years.

5.

(a) A person who is employed as an officer or member of a crew on a vessel which flies the flag of one Contracting State and who would be covered under the laws of both Contracting States shall be subject to the laws of only the Contracting State whose flag the vessel flies. For purposes of the preceding sentence, a vessel which flies the flag of the United States is one defined as an American vessel under the laws of the United States.

(b) Traveling employees of air transportation companies who perform work in the territories of both Contracting States and who would otherwise be covered under the laws of both Contracting States shall, with respect to that work, be subject to the laws of only the Contracting State in the territory of which the company has its headquarters. However, if such employees reside in the territory of the other Contracting State, they shall be subject to the laws of only that Contracting State.

6.

(a) This Agreement shall not affect the provisions of the Vienna Convention on Diplomatic Relations of April 18, 1961, or of the Vienna Convention on Consular Relations of April 24, 1963.

(b) Nationals of one of the Contracting States who are employed by the Government of that Contracting State in the territory of the other Contracting State but who are not exempt from the laws of the other Contracting State by virtue of the Conventions mentioned in subparagraph (a) shall be subject to the laws of only the first Contracting State. For the purpose of this paragraph, employment by the United States Government includes employment by an instrumentality thereof. For the purpose of this paragraph, employment by the Hungarian Government includes the employment of civil servants, public employees and other persons treated as such, together with their family members and Hungarian citizens who are employed by Hungarian institutions in the territory of the United States.

7. At the request of an employee and his or her employer or a self-employed person, the Competent Authorities of the two Contracting States or agencies designated by them may agree to grant an exception to the provisions of this Part with respect to particular persons or categories of persons, provided that any affected person shall be subject to the laws of one of the Contracting States.

PART III: PROVISIONS ON BENEFITS

Article 6. Mutual Provisions

1. Subject to other provisions of this Part, if, under the laws of one Contracting State, eligibility for benefits is conditional upon having completed periods of coverage, the agency of that Contracting State shall take into account periods of coverage completed under the laws of the other Contracting State, unless such periods of coverage overlap with periods of coverage completed under the laws of the first Contracting State.

2. An agency of a Contracting State shall not apply the provisions of paragraph 1 of this Article if the person on whose account benefits are claimed has sufficient periods of coverage to satisfy the requirements for entitlement to benefits under the laws of that Contracting State.

3. For purpose of crediting periods of coverage in establishing entitlement to benefits under this Agreement, one quarter of United States coverage and 90 days of Hungarian coverage shall be treated as equivalent, and four quarters of United States coverage and one year of Hungarian coverage shall be treated as equivalent.

4. The agency of one Contracting State shall take into account periods of coverage creditable under the laws of the other Contracting State exclusively in accordance with the laws of the first Contracting State.

Article 7. United States Benefits

The following provisions shall apply to the United States:

1. Where a person has completed at least six quarters of coverage under United States laws, but does not have sufficient periods of coverage to satisfy the requirements for entitlement to benefits under United States laws, the agency of the United States shall take into account, for the purpose of establishing entitlement to benefits under this Article, periods of coverage which are credited under Hungarian laws. The total number of quarters of coverage to be credited for a year shall not exceed four.

2. Where entitlement to a benefit under United States laws is established according to the provisions of paragraph 1 of this Article, the agency of the United States shall compute a pro rata Primary Insurance Amount in accordance with United States laws based on (a) the person’s average earnings credited exclusively under United States laws and (b) the ratio of the duration of the person’s periods of coverage completed under United States laws to the duration of a coverage lifetime as determined in accordance with United States laws. Benefits payable under United States laws shall be based on the pro rata Primary Insurance Amount.

3. Entitlement to a benefit from the United States which results from paragraph 1 of this Article shall terminate with the acquisition of sufficient periods of coverage under United States laws to establish entitlement to an equal or higher benefit without the need to invoke the provision of paragraph 1 of this Article.

Article 8. Hungarian Old-Age and Survivors Benefits

The following provisions shall apply to Hungary:

1. If a Hungarian benefit has been awarded, accumulation of additional periods of coverage under United States laws shall not result in any revision or recalculation of the Hungarian benefit.

2. Where a person is entitled to benefits under Hungarian laws only with regard to periods of coverage completed under United States laws, the Hungarian agency shall calculate the amount payable (in accordance with paragraph 3 of Article 6 of this Agreement) as if all periods of coverage completed by the person concerned under the laws of both Contracting States were completed in Hungary. The Hungarian agency shall pay only the proportion of the benefit calculated by this method that corresponds to the ratio of periods of coverage completed under Hungarian laws to the total periods of coverage under the laws of both Contracting States.

3. Under Hungarian laws, where benefits are calculated on the basis of income and contributions, the Hungarian agency shall take into account only income or contributions paid under Hungarian laws.

4. Where the total period of coverage completed under Hungarian laws is less than 365 days, provided that no eligibility to benefits is established only on the basis of this period of coverage, the Hungarian agency shall not apply the provisions of this Article.

Article 9. Hungarian Benefits for Persons with Changed Working Capacity

1. Where entitlement to a benefit for persons with changed working capacity can be established with periods of coverage completed solely under the Hungarian laws, the benefit shall be calculated as follows:

a) the Hungarian agency shall calculate the benefit payable under the Hungarian laws and subtract from that half of the amount of the old-age or disability benefit awarded by the agency of the other Contracting State up to half of the amount of the Hungarian benefit calculated; and

b) the Hungarian agency shall calculate the benefit payable under the Hungarian laws multiplied by the ratio of periods of coverage completed under the Hungarian laws to the total periods of coverage completed under the laws of both Contracting States.

2. The Hungarian agency shall pay the higher of the amounts calculated under paragraphs 1 a) and b).

3. Where entitlement to a benefit can be established exclusively by taking into account periods of coverage completed under the laws of both Contracting States, the Hungarian agency shall calculate the theoretical benefit amount which would be awarded if all periods of coverage under the laws of both Contracting States were completed under the laws of Hungary, and multiplying the result by the ratio of periods of coverage completed under Hungarian laws to the total periods of coverage under the laws of both Contracting States. The Hungarian agency shall pay only the proportion of the benefit calculated by this method.

4. Where the total period of coverage completed under the laws of Hungary is less than 365 days, the Hungarian agency shall not award a benefit under the scope of this Article.

5. Entitlement to a rehabilitation benefit can be established exclusively in the case of Hungarian residence.

Article 10. Miscellaneous Benefit Provisions

Where the laws of either Contracting State provide for a reduction in a person’s benefit amount solely because the person receives a benefit from the other Contracting State, such reduction shall not apply in the case of a benefit payable exclusively under Articles 7, 8, or paragraph 1(b) or paragraph 3 of Article 9 of this Agreement.

PART IV: MISCELLANEOUS PROVISIONS

Article 11. Administrative Arrangements

1. The Competent Authorities of the two Contracting States shall:

(a) make all necessary administrative arrangements for the implementation of this Agreement and designate liaison agencies;

(b) communicate to each other information concerning the measures taken for the application of this Agreement; and

(c) communicate to each other, as soon as possible, information concerning all changes in their respective laws which may affect the application of this Agreement.

2. The liaison agencies shall be authorized, with the involvement of the Competent Authorities, to agree on appropriate measures required for the implementation of this Agreement.

Article 12. Mutual Assistance

The Competent Authorities and the agencies of the Contracting States, within the scope of their respective authorities, shall assist each other in implementing this Agreement. This assistance shall be free of charge, subject to exceptions to be agreed upon in an administrative arrangement.

Article 13. Confidentiality of Exchanged Personal Data

1. Unless otherwise required by the national statutes of a Contracting State, personal data transmitted in accordance with this Agreement to one Contracting State by the other Contracting State shall be used for purposes of administering this Agreement and the laws in Article 2 of this Agreement. The receiving Contracting State’s national statutes for the protection of privacy and confidentiality of personal data and the provisions of this Agreement shall govern such use.

2. The Competent Authorities of the Contracting States shall inform each other about all amendments to their national statutes regarding the protection of privacy and confidentiality of personal data that affect the transmission of personal data.

3. A person may request, and the Competent Authority or agency requesting or transmitting personal data must disclose to that person upon such request, the content, receiving agency, and duration of use of his or her personal data and the purpose and legal grounds for which such personal data were used or requested.

4. The agencies shall take all reasonable steps to ensure that transmitted personal data are accurate and limited to data required to fulfill the receiving agency’s request. In accordance with their respective national statutes, the agencies shall correct or delete any inaccurate transmitted personal data and any data not required to fulfill the receiving agency’s request, and immediately notify the other agency of such correction or deletion. This shall not limit a person’s right to request such correction of his or her personal data directly from the agencies.

5. Both the transmitting and the receiving agencies shall effectively protect personal data against unauthorized or illegal access, alteration, or disclosure.

Article 14. Confidentiality of Exchanged Employers’ Information

Unless otherwise required by the national statutes of a Contracting State, employers’ information transmitted between Contracting States in accordance with this Agreement shall be used for purposes of administering this Agreement and the laws in Article 2 of this Agreement. The receiving Contracting State’s national statutes for the protection and confidentiality of employers’ information and the provisions of this Agreement shall govern such use.

Article 15. Documents

1. Where the laws of a Contracting State provide that any document which is submitted to the Competent Authority or an agency of that Contracting State shall be exempted, wholly or partly, from fees or charges, including consular and administrative fees, the exemption shall also apply to corresponding documents which are submitted to the Competent Authority or an agency of the other Contracting State in the application of this Agreement.

2. Documents and certificates which are presented for purposes of this Agreement shall be exempted from requirements for authentication by diplomatic or consular authorities.

3. Copies of documents which are certified as true and exact copies by an agency of one Contracting State shall be accepted as true and exact copies by an agency of the other Contracting State, without further certification. The agency of each Contracting State shall be the final judge of the probative value of the evidence submitted to it from whatever source.

Article 16. Correspondence and Language

1. The Competent Authorities and agencies of the Contracting States may correspond directly with each other and with any person wherever the person may reside, whenever it is necessary for the administration of this Agreement.

2. An application or document may not be rejected by a Competent Authority or agency of a Contracting State solely because it is in the language of the other Contracting State.

3. Decisions of the Hungarian agencies may be mailed using return receipt, and other documents may be sent by registered mail directly to persons in the territory of the United States.

Article 17. Applications

1. A written application for benefits filed with an agency of one Contracting State shall protect the rights of the claimants under the laws of the other Contracting State if the applicant requests that it be considered an application under the laws of the other Contracting State.

2. If an applicant has filed a written application for benefits with an agency of one Contracting State and has not explicitly requested that the application be restricted to benefits under the laws of that Contracting State, the application shall also protect the rights of the claimants under the laws of the other Contracting State if the applicant provides information at the time of filing indicating that the person on whose record benefits are claimed has completed periods of coverage under the laws of the other Contracting State.

3. The provisions of Part III shall apply only to benefits for which an application is filed on or after the date this Agreement enters into force.

Article 18. Appeals and Time Limits

1. A written appeal of a determination made by an agency of one Contracting State may be validly filed with an agency of either Contracting State. The appeal shall be decided according to the procedure and laws of the Contracting State whose decision is being appealed.

2. Any claim, notice, or written appeal which, under the laws of one Contracting State, must have been filed within a prescribed period with an agency of that Contracting State, but which is instead filed within the same period with an agency of the other Contracting State, shall be considered to have been filed on time.

Article 19. Transmittal of Claims, Notices, and Appeals

1. In any case to which the provisions of Article 18 of this Agreement apply, the agency to which the claim, notice, or written appeal has been submitted shall indicate the date of receipt on the document and transmit it without delay to the liaison agency of the other Contracting State.

2. In accordance with measures to be agreed upon in an administrative arrangement, the agency of one Contracting State shall, upon request of the agency of the other Contracting State, furnish available information relating to the claim of any specified individual for the purpose of administering this Agreement.

3. Upon request, the liaison agency of either Contracting State shall furnish without cost to the liaison agency of the other Contracting State any medical information and documentation in its possession relevant to the disability of the claimant or beneficiary.

Article 20. Currency

1. Payments under this Agreement shall be made in the currency of the Contracting State making the payments.

2. In case provisions designed to restrict the exchange or exportation of currencies are introduced by either Contracting State, the Governments of both Contracting States shall immediately take measures necessary to ensure the transfer of sums owed by either Contracting State under this Agreement.

3. Payments made under this Agreement shall be carried out on the basis of the respective rules in force in the territory of the paying Contracting State at the date of such payments.

Article 21. Settlement of Disputes

1. Any dispute between the Contracting States concerning the interpretation or the application of this Agreement shall be, by mutual agreement, resolved by the Competent Authorities of the Contracting States.

2. Any difficulties which have not been resolved in accordance with paragraph 1 of this Article shall be resolved through diplomatic channels.

Article 22. Supplementary Agreements

This Agreement may be amended in the future by supplementary agreements which, from their entry into force, shall be considered an integral part of this Agreement. Such agreements may be given retroactive effect if they so specify, provided that it is advantageous to persons affected.

PART V: TRANSITIONAL AND FINAL PROVISIONS

Article 23. Miscellaneous Provisions

1. This Agreement shall not establish any claim to payment of a benefit for any period before the date of entry into force of this Agreement, or to a lump-sum death benefit if the person died before the entry into force of this Agreement.

2. In determining the right to benefits under this Agreement, consideration shall be given to periods of coverage under the laws of both Contracting States and other events which occurred before the entry into force of this Agreement.

3. Determinations concerning entitlement to benefits which were made before the entry into force of this Agreement shall not affect rights arising under it.

4. The application of this Agreement shall not result in any reduction in the amount of a benefit to which entitlement was established prior to its entry into force.

5. In applying paragraph 2 or 4 of Article 5 of this Agreement in the case of persons whose detachment or self-employment referred to in those paragraphs commenced prior to the date of entry into force of this Agreement, the period of such detachment or self-employment referred to in these paragraphs shall be considered to begin on that date.

Article 24. Special Obligations of Hungary Regarding this Agreement

The present Agreement shall in no way prejudice the obligations of Hungary as a member state of the European Union. Consequently, the provisions of the present Agreement shall not be invoked or interpreted in such a way as to invalidate or otherwise affect the obligations of Hungary imposed by the Treaties on which the European Union is founded.

Article 25. Duration and Termination

1. This Agreement shall remain in force and effect until the expiration of one calendar year following the year in which written notice of its termination is given by one of the Contracting States to the other Contracting State.

2. If this Agreement is terminated, rights regarding entitlement to or payment of benefits acquired under it shall be retained. The Contracting States shall make arrangements dealing with rights in the process of being acquired.

Article 26. Entry Into Force

The Governments of both Contracting States shall notify each other in writing of the completion of their respective statutory and constitutional procedures required for the entry into force of this Agreement. This Agreement shall enter into force on the first day of the second month following the date of the last notification.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed the present Agreement.

DONE at Budapest on the 3rd of February, 2015 in duplicate in the Hungarian and English languages, the two texts being equally authentic.