Totalization Agreement with Denmark

SSA Publication No. 05-10518, October 2008, ICN 570130 [OMB Approval Number: 0960-0554 Expires 12/31/2016]

Contents

Introduction
Coverage and Social Security taxes
Certificate of coverage
Monthly benefits
A Danish "ATP" pension may affect your U.S. benefit
What you need to know about Medicare
Claims for benefits
For more information

Introduction

An agreement effective October 1, 2008, between the United States and Denmark improves Social Security protection for people who work or have worked in both countries. It helps many people who, without the agreement, would not be eligible for monthly retirement, disability or survivors benefits under the Social Security system of one or both countries. It also helps people who would otherwise have to pay Social Security taxes to both countries on the same earnings.

The agreement covers Social Security taxes (including the U.S. Medicare portion) and Social Security retirement, disability and survivors insurance benefits. It does not cover benefits under the U.S. Medicare program or the Supplemental Security Income program.

This document covers highlights of the agreement and explains how it may help you while you work and when you apply for benefits.

The agreement may help you, your family and your employer

  • While you work—If your work is covered by both the U.S. and Danish Social Security systems, you (and your employer, if you are employed) would normally have to pay Social Security taxes to both countries for the same work. However, the agreement eliminates this double coverage so you pay taxes to only one system (see the section on "Coverage and Social Security taxes").
  • When you apply for benefits—You may have some Social Security credits in both the U.S. and Denmark but not have enough to be eligible for benefits in one country or the other. The agreement makes it easier to qualify for benefits by letting you add together your Social Security credits in both countries. For more details, see the section on "Monthly benefits".

Coverage and Social Security taxes

Before the agreement, employees, employers and self-employed people could, under certain circumstances, be required to pay Social Security taxes to both the United States and Denmark for the same work.

Under the agreement, if you work as an employee in the United States, you normally will be covered by the United States, and you and your employer will pay Social Security taxes only to the United States. If you work as an employee in Denmark, you normally will be covered by Denmark, and you and your employer pay Social Security taxes only to Denmark.

On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for a temporary period, you will continue to be covered by your home country and you will be exempt from coverage in the other country. A temporary period is defined in the agreement as five years or less for transfers from the United States to Denmark, and three years or less from Denmark to the United States. For example, if a U.S. company sends an employee to work for that employer or an affiliate in Denmark for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in Denmark.

If you are self-employed and reside in the United States or Denmark, you generally will be covered and taxed only by the country where you reside.

NOTE: In addition to retirement, disability and survivors benefits, Danish Social Security taxes cover several other programs including unemployment, sickness, maternity, medical, work accident, and family allowance benefits. As a result, workers exempted from Danish Social Security coverage by the agreement pay no Social Security taxes for these programs and generally cannot receive benefits from them. If the agreement exempts you from Danish coverage, you and your employer may wish to arrange for alternative benefit protection.


Summary of agreement rules

The following table shows whether your work is covered under the U.S. or Danish Social Security system. If you are covered under U.S. Social Security, you and your employer must pay U.S. Social Security taxes. If you are covered under the Danish system, you and your employer must pay Danish Social Security taxes. If you are self-employed and reside in the United States or Denmark, you generally will be covered and taxed by the country where your reside. the next section explains how to get a form from the country where you are covered that will prove you are exempt in the other country.

 

Your work status

Coverage and taxes

You are working in Denmark:

For a U.S. employer who:
  • Sent you to work in Denmark for five years or less

U.S.

  • Sent you to work in Denmark for more than five years

Denmark

  • Hired you in Denmark

Denmark

For a non-U.S. employer

Denmark

For the U.S. government and you are a:

  • U.S. national

U.S. (either Social Security or federal retirement program

  • Danish national
Denmark

You are working in the U.S.:

For an employer in Denmark who:
  • Sent you to work in the U.S. for three years or less

Denmark

  • Sent you to work in the U.S. for more than three years

U.S.

  • Hired you in the U.S.

U.S.

For a non-Danish employer

U.S.

For the Danish government and you are a:

  • Danish national

Denmark

  • U.S. citizen
U.S.

You are self-employed and you:

  • Reside in the U.S.

U.S.

  • Reside in Denmark

Denmark

If this table does not seem to describe your situation and you are:

  • Working in the U.S.

Write to the U.S. address in "Certificates for employees" section for further information.

  • Working in Denmark

Write to the Denmark address in "For more information" section for further information.

NOTE: As the table indicates, a U.S. worker employed in Denmark can be covered by U.S. Social Security only if he or she works for a U.S. employer. A U.S. employer includes a corporation organized under the laws of the United States or any state, a partnership if at least two-thirds of the partners are U.S. residents, a person who is a resident of the U.S. or a trust if all the trustees are U.S. residents. The term also includes a foreign affiliate of a U.S. employer if the U.S. employer has entered into an agreement with the Internal Revenue Service under section 3121(l) of the Internal Revenue Code to pay Social Security taxes for U.S. citizens and residents employed by the affiliate.

A certificate of coverage issued by one country serves as proof of exemption from Social Security taxes on the same earnings in the other country.

Certificate of coverage

A certificate of coverage issued by one country serves as proof of exemption from Social Security taxes on the same earnings in the other country.

Certificates for employees

To establish an exemption from compulsory coverage and taxes under the Danish system, your employer must request a certificate of coverage (form USA/DK 1) from the U.S. at this address:

Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, MD 21235-7741
USA

If preferred, the request may be sent by FAX to (410) 966-1861.   Please note this FAX number should only be used to request certificates of coverage. 

No special form is required to request a certificate but the request must be in writing and provide the following information:

  • Full name of worker;
  • Date and place of birth;
  • Citizenship;
  • Country of worker's permanent residence;
  • U.S. Social Security number;
  • Danish "CPR" number*, (if known);
  • Name, relationship and date of birth of family members accompanying the worker, and Danish "CPR" number* (if known);
  • Date of hire;
  • Country of hire;
  • Name and address of the employer in the U.S. and Denmark; and
  • Date of transfer and anticipated date of return.

  • * a "CPR" number is the Danish central personal registration number.

In addition, your employer must indicate if you remain an employee of the U.S. company while working in Denmark or if you become an employee of the U.S. company’s affiliate in Denmark. If you become an employee of an affiliate, your employer must indicate if the U.S. company has an agreement with the Internal Revenue Service under section 3121(l) of the Internal Revenue Code to pay U.S. Social Security taxes for U.S. citizens and residents employed by the affiliate and, if yes, the effective date of the agreement.

Your employer can also request a certificate of U.S. coverage for you over the Internet using a special online request form available at www.socialsecurity.gov/coc. Only an employer can use the online form to request a certificate of coverage. A self-employed person must submit a request by mail or fax.

To establish your exemption from coverage under the U.S. Social Security system, your employer in Denmark must request a certificate of coverage (form DK/USA 1) from Denmark at this address:

National Social Security Agency
6. Division, International Office
Landemaerket 11
DK-1119 Copenhagen
DENMARK

The same information required for a certificate of coverage from the United States is needed to get a certificate from Denmark except that you must show your Danish CPR number rather than your U.S. Social Security number.

 

Certificates for self-employed people

If you are self-employed and would normally have to pay Social Security taxes to both the U.S. and Danish systems, you can establish your exemption from one of the taxes.

  • If you reside in the United States, write to the the Social Security Administration at the address in "Certificates for employees" section or fax to (410) 965-1861; or
  • If you reside in Denmark, write to the National Social Security Agency at the address shown in Certificates for employees section.

Be sure to provide the following information in your letter:

  • Full name;
  • Date and place of birth;
  • Citizenship;
  • Country of permanent residence;
  • U.S. Social Security number and Danish "CPR" number* (if known);
  • Name, relationship and date of birth of family members accompanying you;
  • Address in Denmark, if known;
  • Nature of self-employment activity;
  • Dates the activity was or will be performed; and
  • Name and address of your trade or business in both countries.
  • * A "CPR" number is your Danish central personal registration number.

 

Effective date of coverage exemption

The certificate of coverage you receive from one country will show the effective date of your exemption from paying Social Security taxes in the other country. Generally, this will be the date you began working in the other country, but no earlier than the effective date of the agreement.

Certificates of coverage issued by Denmark should be retained by the employer in the United States in case of an audit by the Internal Revenue Service (IRS). No copies should be sent to IRS unless specifically requested by IRS. However, a self-employed person must attach a photocopy of the certificate to his or her tax return each year as proof of the U.S. exemption. 

Copies of certificates of coverage issued by the United States will be provided for both the employee and the employer. It will be their responsibility to present the certificate to the Danish authorities when requested to do so. To avoid any difficulties, your employer (or you, if you are self-employed) should request a certificate as early as possible, preferably before your work in the other country begins.

If you or your employer request a certificate of coverage, you should read the Privacy Act and Paperwork Reduction Act Statements at the end of this booklet.

 

Authority to collect information for a certificate of coverage

Privacy Act

The Privacy Act requires us to notify you that we are authorized to collect this information by section 233 of the Social Security Act. While it is not mandatory for you to furnish the information to the Social Security Administration (SSA), a certificate of coverage cannot be issued unless a request has been received. The information is needed to enable SSA to determine if work should be covered only under the U.S. Social Security system in accordance with an international agreement. Without the certificate, work may be subject to taxation under both the U.S. and the foreign Social Security systems.

Paperwork Reduction Act Notice

This information collection meets the clearance requirements of 44 U.S.C. section 3507, as amended by section 2 of the Paperwork Reduction Act of 1995. You are not required to answer these questions unless we display a valid Office of Management and Budget (OMB) control number. We estimate that it will take you about 30 minutes to read the instructions, gather the necessary facts, and write down the information to request a certificate of coverage.

Monthly benefits

The following table shows the various types of Social Security benefits payable under the U.S. and Danish Social Security systems and briefly describes the eligibility requirements that normally apply for each type of benefit. If you do not meet the normal requirements for these benefits, the agreement may help you to qualify (see Part IV.A below).

This table is only a general guide. You can get more specific information about U.S. benefits here on our web site or at any U.S. Social Security office or by calling our toll-free number at 1-800-772-1213. You can get more detailed information about the Danish system by writing to the Danish address in "Certificates for employees" section or by visiting the Danish Social Security system website at www.sist.dk/.

Under U.S. Social Security, you may earn up to four credits each year depending on the amount of your covered earnings. The amount needed to earn a work credit goes up slightly each year. For more information, see How You Earn Credits (SSA Publication No. 05-10072). Under the Danish system, credits are measured in months. To simplify the information in the table, requirements are shown in years of credits.

We should point out that Denmark pays benefits through a two-tiered program. the first tier, caled the Folkepension (FP), pays flat-rate benefits to people who meet certain residence requirements. the second tier is an earnings-related program known as the Labour Market Supplementary Pension (ATP). the ATP pays benefits based on a worker's contributions and total years of coverage.

 

Monthly benefits and eligibility requirements

Retirement or old-age benefits
United States Denmark
Worker-Full benefit at full retirement age*. Reduced benefit as early as age 62. Required work credits range from one and one-half to 10 years (10 years if 62 in 1991 or later).

Worker-Social Pension Program (FP)-Full basic pension amount at age 65 with 40 years of residence in Demark between the ages of 15 and 65. A Danish national must have resided in Denmark for at least three years between age 15 and 65 to receive a partial benefit.  If not a Danish national, you must have resided in Denmark for at least 10 years between ages 15 and 65, five years immediately prior to entitlement, or have been granted a Danish residence permit under article 7 or 8 of the Danish Aliens Act

Labour Market Supplementary Pension (ATP)-Pension payable at full retirement age** to anyone who has contributed to the program.  Wage-earners in Denmark ages 16 to 65 with more than nine hours of paid work per week pay ATP contributions.


Disability benefits
United States Denmark
Worker-Under full retirement age* can get a benefit if unable to do any substantial gainful work for at least a year. One and one-half to 10 years credit needed, depending on age at date of onset. Some recent work credits also needed unless worker is blind.

Worker-

FP-?Anticipatory Pension? (AP) plays the same role as disability and survivors pensions in most other countries. AP payments are ?means-tested.? Danish nationals, foreigners with 10 years of residence between ages 18 and 65 (five in the last 10 years), refugees, employees and self-employed persons from European Union (EU) member states may be eligible for AP.

Person age 18 to 65 whose capacity for work is permanently reduced and the person is otherwise unable to assure his or her subsistence, not even in a job which is supported under the social security legislation (adapted job).

ATP-Disability benefits are not provided under the ATP program.

Family benefits to dependents of retired or disabled persons
United States Denmark
Spouse-Full benefit at full retirement age* or at any age if caring for the worker's entitled child under age 16 (or disabled before age 22). Reduced benefit as early as age 62 if not caring for a child. Spouse or cohabiting partner-No provision.
Divorced spouse-Full benefit at full retirement age.* Reduced benefit as early as age 62. Must be unmarried and have been married to worker for at least 10 years. Divorced spouse-No provision.
Children-If unmarried, up to age 18 (age 19 if in an elementary or secondary school full time) or any age if disabled before age 22. Children-No provision.
Survivors benefits
United States Denmark
Survivors benefits payable to the following categories:

Widow(er)-Full benefit at full retirement age* or at any age if caring for the deceased's entitled child under age 16 (or disabled before age 22).  Reduced benefit as early as age 60 (or age 50 if disabled) if not caring for child.  Benefits may be continued if remarriage occurs after age 60 (or age 50 if disabled).

Divorced widow(er)-Same as
widow(er) if marriage lasted at least 10 years.

Children-Same as for children of retired or disabled worker

Widow(er)-
FP-If a spouse or member of a cohabiting couple dies and both were receiving a Social Pension benefit, the surviving partner remains entitled to the full amount of both partners? benefits for three months after the date of death.

ATP-Surviving spouse/common-law spouse and children can become entitled to lump-sum ATP survivors benefits upon the members? death.

If the member contributed to the ATP prior to January 1, 2002, the surviving spouse [but not the common-law spouse] and children under age 18 can qualify for a lump-sum benefit upon the member?s death, in spite of the age of the member when the member dies.

If the member contributed to the ATP after December 31, 2001, the surviving spouse/ common-law spouse, and children under age 21 may qualify for a lump-sum benefit, provided the worker paid ATP contributions for at least two years. The common-law spouse can only become entitled to a lump-sum if the cohabitees have been registered with ATP.

The lump-sum benefit for the surviving spouse/common-law spouse is reduced if the member dies between ages 66 to 70 and is not payable if the worker dies after age 70.

Lump-sum death benefit-A one-time payment not to exceed $255 payable on the death of an insured worker. Funeral benefit (means-tested)-Survivors may apply to Danish Ministry of the Interior and Health. Requirement for benefit-pensioner was a resident of Denmark, an EU member state, Liechtenstein, or Switzerland at time of death.

* The full retirement age is 66 for people born in 1943-1954 and will gradually increase to 67 for people born in 1960 or later.

**Full retirement age for people born July 1, 1939 to January 1, 1959 is age 65. The full retirement age increases gradually until it reach age 67 for people born June 30, 1960 or later.

 

How benefits can be paid

If you have Social Security credits in both the United States and Denmark, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country’s system, you will get a regular benefit from that country. If you do not meet the basic requirements, the agreement may help you qualify for a benefit as explained below.

  • Benefits from the United States—If you do not have enough work credits under the U.S. system to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and Danish credits. However, to be eligible to have your Danish credits counted, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the United States cannot count your Danish credits.
  • Benefits from Denmark—Denmark provides retirement, disability and other benefits through two separate programs.
    1. The Folkepension (?social?) pays flat-rate benefits to Danish nationals who have resided in Denmark for three years. The benefit amount is proportional to the number of years they have resided in Denmark and is unrelated to past earnings. People who are not Danish nationals may also qualify for ?social? benefits if they have resided in Denmark for at least 10 years, five years of which immediately before entitlement.

      Under the agreement, if you are a U.S. national, you can qualify for Danish ?social? benefits if you have resided in Denmark for three years and have worked in Denmark for at least one year. (Before the agreement, U.S. nationals needed at least ten years, five of which immediately before entitlement, to qualify.)

    2. The Labour Market Supplementary Pension (ATP) pays benefits based on the worker?s contributions and total years of work. A person can qualify for an ATP benefit with as little as one month of ATP coverage. Therefore, work credits under the U.S. system will not be counted when determining eligibility for ATP benefits.

How credits get counted

You do not have to do anything to have your credits in one country counted by the other country. If we need to count your credits under the Danish system to help you qualify for a U.S. benefit, we will get a copy of your Danish earnings record directly from Denmark when you apply for benefits.

Although the Social Security Administration may count your Danish ATP credits, your Danish ATP credits are not actually transferred from Denmark to the United States. They remain on your record in Denmark where you earned them and also can be used to qualify for benefits there.

 

Computation of U.S. benefit under the agreement

When a U.S. benefit becomes payable as a result of counting both U.S. and Danish Social Security credits, an initial benefit is determined based on your U.S. earnings as if your entire career had been completed under the U.S. system. This initial benefit is then reduced to reflect the fact that Danish credits helped to make the benefit payable. The amount of the reduction will depend on the number of U.S. credits: the more U.S. credits, the smaller the reduction; and the fewer U.S. credits, the larger the reduction.

A Danish "ATP" pension may affect your U.S. benefit

If you qualify for Social Security benefits from the United Stats and a Danish "ATP" pension and you did not need the agreement to qualify for the U.S. benefit, the amount of your U.S. benefit may be reduced. This is a result of a provision in U.S. law which can affect the way your benefit is figured if you also receive a pension based on work that was not covered by U.S. Social Security. Receipt of a Danish "social" (FP) pension, which is based on residence in Denmark, will not affect the way your U.S. benefit is figured. For more information, call our toll-free number, 1-800-772-1213, and get the publication, Windfall Elimination Provision (Publication No. 05-10045). If you are outside the United States, you may write to us at the address in "For more information" section.

What you need to know about Medicare

Medicare is the U.S. national health insurance system for people age 65 or older or who are disabled. Medicare has four parts: hospital insurance (also called "Part A" Medicare), medical insurance (called "Part B" Medicare), Medicare advantage (called "Part C" Medicare), and prescription drug coverage (called "Part D" Medicare). You are eligible for free hospital insurance at age 65 if you have worked long enough under U.S. Social Security to qualify for a retirement benefit. People born in 1929 or later need 40 credits (about 10 years of covered work) to qualify for retirement benefits.

Although the agreement between the United States and Denmark allows the Social Security Administration to count your Danish ATP credits to help you qualify for U.S. retirement, disability or survivor benefits, the agreement does not cover Medicare benefits. As a result, we cannot count your credits in Denmark to establish entitlement to free Medicare hospital insurance.

For more information about Medicare, call our toll-free number, 1-800-772-1213, and ask for the publication, Medicare (Publication No. 05-10043) or visit Medicare’s website at www.medicare.gov.

Claims for benefits

If you live in the United States and wish to apply for U.S. or Danish benefits:

  • Visit or write any U.S. Social Security office; or
  • Phone our toll-free number, 1-800-772-1213, 7 a.m. to 7 p.m. any business day. People who are deaf or hard of hearing may call our toll-free TTY number, 1-800-325-0778.

You can apply for Danish benefits at any U.S. Social Security office by completing an application form SSA-2490.

If you live in Denmark and wish to apply for U.S. or Danish benefits, contact:

  • The Federal Benefits Unit at the U.S. Embassy in Oslo (phone 47-2-2448-550) to file for U.S. benefits; or
  • Any Danish Social Security office to file for Danish benefits.

You can apply with one country and ask to have your application considered as a claim for benefits from the other country. Information from your application will then be sent to the other country. Each country will process the claim under its own laws—counting credits from the other country when appropriate—and notify you of its decision.

If you have not applied for benefits before, you may need to provide certain information and documents when you apply. These include the worker’s U.S. Social Security number, the worker's Danish CPR number, proof of age for all claimants, evidence of the worker’s U.S. earnings in the past 24 months and information about the worker’s coverage under the Danish system. You may wish to call the Social Security office before you go there to see if any other information is needed.

 

Payment of benefits

Each country pays its own benefit. U.S. payments are made by the U.S. Department of Treasury each month and cover benefits for the preceding month. Payments under the Danish system are paid by direct deposit the last banking day of the month covering benefits for that month.

 

Absence from U.S. territory

Normally, persons who are not U.S. citizens may receive U.S. Social Security benefits while outside the U.S. only if they meet certain requirements. Under the agreement, however, if you are a U.S. or Danish citizen, a refugee, a stateless person, or a person who is eligible for dependents or survivors benefits based on the Social Security record of one of these persons, you may receive benefits as long as you reside in Denmark. If you are not a U.S. citizen and live in a country other than the United States or Denmark, you may not be able to receive benefits. The restrictions on U.S. benefits are explained in the publication, Your Payments While You Are Outside The United States (Publication No. 05-10137).

 

Appeals

If you disagree with the decision made on your claim for benefits under the agreement, contact any U.S. or Danish Social Security office. The people there can tell you what you need to do to appeal the decision.

The Danish Social Security authorities will review your appeal if it affects your rights under the Danish system, while U.S. Social Security authorities will review your appeal if it affects your rights under the U.S. system. Since each country’s decisions are made independently of the other, a decision by one country on a particular issue may not always conform with the decision made by the other country on the same issue.

For more information

To file a claim for U.S. or Danish benefits under the agreement, follow the instructions in "Claims for benefits" section.

To find out more about U.S. Social Security benefits or for information about a claim for benefits, contact any U.S. Social Security office. If you live outside the United States, write to:

Social Security Administration
OIO—Totalization
P.O. Box 17769
Baltimore, Maryland 21235-7769
USA

For more information about Denmark’s Social Security programs, visit any Social Security office in Denmark. If you don’t live in Denmark, write to:

National Social Security Agency
6. Division, International Office
Landemaerket 11
DK-1119 Copenhagen
DENMARK

If you do not wish to file a claim for benefits, but would like more information about the agreement, write to:

Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
USA

Or visit US SSA at www.socialsecurity.gov/. Our website is a valuable resource for information about all of Social Security's programs. At our website you also can get forms to request important documents such as a Social Secrity Statement, a replacement Social Security or Medicare card or a letter to confirm your benefit amount. You can find our publications on line as well.

For additional information visit our website: www.socialsecurity.gov/international.