What Do Other Countries Do in Place of Social Security?

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Tens of millions of Americans depend on Social Security, but the US is by no means the only country that guarantees a secure income to its retired, disabled and survivor population. According to the International Social Security Association (ISSA), about half of the world’s people have access to some form of social security, but only about 20% receive adequate coverage.

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These may be social security programs, universal programs, social assistance programs, national provident funds, mutual benefit schemes or market-based approaches.

The first adopters were decades ahead of America, with the first mandatory insurance programs emerging in Europe in the late 1800s. Programs became more widely adopted in the 20th century, spreading around the world through decolonization and the creation of new states after World War II. Finally, the 1948 Universal Declaration of Human Rights recognized social security as a fundamental human right, and today social assistance is the rule, not the exception.

Most countries have a program, but each one is different

The ISSA maintains data on social security programs in more than 180 countries. It tracks and collects information on the following broad benefit categories for each national program:

  • Old age, disability and next of kin

  • Sickness and maternity (including sickness benefits, maternity benefits and medical benefits)

  • Accidents at work and occupational diseases

  • Unemployment

  • Family and family benefits

The structure, coverage, qualification criteria, benefits and redemption requirements vary significantly from country to country.

Finland, for example, introduced its pension system in 1937. It provides universal coverage for all residents, with special programs for farmers, seafarers, public sector employees and the self-employed. To fund the program, residents pay 6.35% of their gross monthly income until age 53, and 7.85% thereafter. Employers contribute 17.75% of their covered wage bill.

Morocco, on the other hand, first created its pension program in 1959. It is a social insurance scheme that collects 3.96% of gross monthly earnings from employees to fund its benefits and 7.93% of gross monthly earnings from employers.

In the United States, workers and employers split the bill evenly, each with 6.2% to fund Social Security — but the self-employed must pay both sides with a 12.4% levy known as the self-employment tax.

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Where you live determines what is covered

The most significant variable of all relates to what each country’s program covers. For example, the United States ranks alongside Papua New Guinea, Suriname, Sierra Leone, Palau, Micronesia, and the Marshall Islands in offering no-cash maternity benefits. The US is also part of a small fraternity that does not provide sickness benefits. The others include Sierra Leone, Senegal, Palau, Micronesia, the Marshall Islands, Kiribati, Korea, Ghana, and Burkina Faso.

On the other hand, countries are much less inclined to cover unemployment or pay household and family benefits. Unlike most countries, which omit one, the other, or both, the US provides coverage for both categories.

In all, more than 60 countries cover all seven of the primary benefit categories discussed earlier, including the three covered by ‘sickness and maternity’. Full coverage countries include densely populated and wealthy developed countries such as Canada and Japan, small or emerging countries such as Estonia and the Kyrgyz Republic, and everything in between.

Every other year, the Social Security Administration (SSA) publishes updates on the latest news about Social Security programs around the world, with Africa and the Americas getting biannual updates on odd-numbered years and Europe, Asia, and the Pacific getting updates on even-numbered years.

What about U.S. Social Security beneficiaries who live abroad?

America has bilateral agreements with other countries that coordinate similar social security programs to those of the US. These so-called ‘aggregation agreements’ eliminate double taxation and fill gaps in benefits for people who have worked abroad.

If you are a U.S. citizen eligible for Social Security benefits, you can collect payments for as long as you qualify, in most cases even if you live in another country. With few exceptions, the SSA generally cannot send payments to the following countries:

  • Azerbaijan

  • Belarus

  • Kazakhstan

  • Kyrgyzstan

  • Moldavia

  • Tajikistan

  • Turkmenistan

  • Uzbekistan

The Treasury Department never authorizes payments to North Korea or Cuba. If you are a U.S. citizen and live in a country with restrictions, you can collect all payments withheld from the SSA when you move to a country where the agency can send money. Also, the SSA allows eligible citizens of about 30 countries to collect benefits regardless of how long they stay outside the U.S.

More from GOBankingRates

This article originally appeared on GOBankingRates.com: What Are Other Countries Doing Instead of Social Security?

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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