	Overview of Noncitizen Eligibility for Social Security(1)

		Basics of the Social Security Program

The Social Security program provides monthly cash benefits to retired and disabled workersand their dependents, and to the survivors of deceased workers. Noncitizens, or aliens, who work in Social Security-covered employment must pay Social Securitypayroll taxes, including those who are in the United States working temporarily and those who maybe working in the United States without authorization. (5) There are some exceptions. (6) Generally, the workof alienswho are citizens of a country with which the United States has a "totalization agreement" (see below)is not covered by Social Security if they are sent by a firm in their home country to work in theUnited States for fewer than five years. Most jobs in the United States are covered under SocialSecurity (about 96% of the work force is required to pay Social Security payroll taxes). Mexico is a social insurance country. To receive payments outside the United States, alien dependents and survivors must havelived in the United States for at least five years previously (lawfully or unlawfully), and the familyrelationship to the worker must have existed during that time. (17) 

		Totalization Agreements

The Social Security Act (18) authorizes the President to enter into a totalization agreementwith another country to coordinate the collection of payroll taxes and the payment of benefits undereach country's Social Security system for workers who split their careers between the two countries. Thus, a worker who may lacksufficient coverage to qualify for benefits under either program may, under a totalization agreement,qualify for benefits under one or both systems. In addition, the United States has signed totalization agreements with Japan (February 19,2004) and Mexico (June 29, 2004). Analysis

The remainder of this report uses different socio-economic characteristics to compare personsborn in Mexico and living in the United States with persons born in the current totalization countriesand living in the United States. Individuals born in Mexico and living in the United States includeboth naturalized U.S. citizens and noncitizens. Education. Furthermore, a higher percentage of noncitizens from totalization countries, U.S. workers,and naturalized U.S. citizen workers from totalization countries are in management, business, andfinancial occupations than noncitizens and naturalized U.S. citizens from Mexico: 21.3% ofnoncitizens from totalization countries and 21.2% naturalized U.S. citizens from totalizationcountries are in management, business, and financial occupations compared to 15.4% of U.S.citizens, 5.9% of naturalized U.S. citizens from Mexico, and 2.9% of noncitizens from Mexico. Conclusion

In addition to being much larger than the population of persons from the totalizationcountries in the United States, the Mexican population -- both noncitizens and naturalized citizens-- in the United States has a different socio-economic profile than U.S. citizens and persons in theUnited States from totalization countries. The populationfrom Mexico tends to be younger and more heavily male. Mexican persons in the U.S. labor force tend to have more dependents in their U.S.households. Because Mexican workers may have lower lifetime earnings, they may receive a higherreplacement rate in Social Security benefits than workers with higher lifetime earnings. Labor Force Participation. Earnings.
On June 29, 2004, the United States and Mexico signed a Social Security totalizationagreement, the effects of which depend on the yet to be disclosed language of the agreement. Atotalization agreement coordinates the payment of Social Security taxes and benefits for workers whodivide their careers between two countries. The agreement has not been transmitted to Congress forreview, which is required under law before the agreement can go into effect. This report does notattempt to estimate the potential cost of a totalization agreement with Mexico, or reach a conclusionon the effects of such an agreement on U.S. workers and employers. Instead this report explores oneof the issues concerning such an agreement. Using different socio-economic characteristics, thereport compares persons born in Mexico and living in the United States (both naturalized U.S.citizens and noncitizens) with persons born in the current totalization countries and living in theUnited States.
The Social Security program provides monthly cash benefits to qualified retired and disabledworkers, their dependents, and survivors of deceased workers. Generally, a worker must have 10years of Social Security-covered employment to be eligible for retirement benefits (less time isrequired for disability and survivor benefits). Most jobs in the United States are covered underSocial Security. Noncitizens (aliens) who work in Social Security-covered employment must paySocial Security payroll taxes, including those who are in the United States working temporarily andthose who may be working in the United States without authorization. There are some exceptions. Generally, the work of aliens who are citizens of a country with which the United States has a"totalization agreement" is not covered by Social Security if they work in the United States for lessthan five years. In addition, by statute, the work of aliens under certain visa categories is not coveredby Social Security. Currently, since Mexico meets the definition of a "social insurance country," aMexican worker may receive U.S. Social Security benefits outside the United States. Familymembers of the Mexican worker must have lived in the United States for at least five years to receivebenefits outside the United States, but typically under a totalization agreement this requirement iswaived.
This report concludes that the Mexican population in the United States has a differentsocio-economic profile than both U.S. citizens and persons (both naturalized U.S. citizens andnoncitizens) from current totalization countries. Workers from totalization countries tend to havemore education and higher earnings than workers born in the United States or in Mexico. Noncitizens from Mexico tend to be younger and have higher labor force participation rates thannaturalized U.S. citizens from Mexico, and other U.S. citizens. In addition, Mexican noncitizensand naturalized U.S. citizens from Mexico in the U.S. labor force tend to have more dependents intheir U.S. households. Because Mexican workers may have lower lifetime earnings, they mayreceive a higher replacement rate, relative to the payroll taxes they pay, than workers with higherlifetime earnings, such as U.S. citizens and noncitizens from the totalization countries. This reportwill not be updated.