Social Security Agreement Current Affairs
India and Brazil have finalised text of the Social Security Agreement (SSA). It will come in force by early 2018 after it is ratified. It will be the first such agreement between the BRICS countries.
This SSA takes forward the spirit of Goa Declaration adopted at 8th BRICS Summit, outcomes of the meetings of BRICS Labour & Employment Ministers held in June 2016 in Geneva and September 2016 in New Delhi.
Key Features of the agreement
- Detached workers of the two countries exempted from making social security contributions in either countries so long as they were making such contributions in their respective countries.
- Rights and obligations of nationals of both countries have been established. Equal treatment will be provided to nationals.
- Unrestricted payment of pensions will be provided to nationals even in the case of residence in the other contracting state.
- The requirements to be entitled to a pension can be met by aggregating the periods of insurance completed in India and Brazil, whereby each country will only pay pension for the insurance periods covered by its laws.
Once SSA between Brazil and India is brought into force, it will favourably impact the profitability and competitive position of companies of both countries with foreign operations in either countries by reducing their cost of doing business abroad. It will also help promote more investment flows between the two countries.
So far, India has signed and operationalized Social Security Agreements (SSAs) with 18 countries. They are Australia, Belgium, Austria, Canada, Denmark, Finland, Czech Republic, France, Germany, Japan, Luxembourg, Hungary, Netherlands, Portugal, Sweden, Norway, Switzerland, and South Korea.
The social security pact between India and Canada which was approved by Union Cabinet in 2013 comes into force after two years of long waiting.
According to the pact the employees posted by Indian entities in Canada are not required to contribute towards Canada’s social security schemes for period of 60 months and similarly the Canadian employees posted in India would enjoy the same benefit.
The employees on both the countries will be able to enjoy this benefit only when they produce a certificate of coverage that specifies that they are contributing towards social security schemes such as PF and pension in their home country.
This pact was sign to enable Indian as well as Canadian employees to avoid double social security contribution and to enhance competitiveness of their services and products.
Government has authorised Employment Provident Fund Organisation (EPFO) to implement social security agreements in India and to issue certificate of coverage to the employees posted by Indian entities to Canada.
Note: Currently India’s Social Security Agreements is operational in fourteen countries – France, Germany, Switzerland, Belgium, South Korea, Denmark, Netherlands, Luxembourg, Sweden, Finland, Czech Republic, Norway, Hungary and Austria.