What Do Other Countries Do in Place of Social Security?

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Tens of millions of Americans rely on Social Security, but the U.S. is by no means the only country that guarantees some level of income to its retired, disabled and survivor populations. According to the International Social Security Association (ISSA), about half of the people in the world have access to some form of social security, but only about 20% receive adequate coverage.

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They might include social insurance programs, universal programs, social assistance programs, national provident funds, mutual benefit schemes or market-oriented approaches.

The earliest adopters beat America to the punch by decades, with the first compulsory insurance programs originating in Europe in the late 19th century. Programs were more widely adopted in the 20th century and spread worldwide through decolonization and the establishment 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.

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Most Countries Have a Program, but Each Is Different

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

  • Old age, invalidity and survivors
  • Sickness and maternity (including cash sickness benefits, cash maternity benefits and medical benefits)
  • Accidents at work and occupational diseases
  • Unemployment
  • Family and household benefits

The structure, coverage, qualifying criteria, benefits and pay-in requirements vary considerably from country to country.

Finland, for example, established its retirement benefits 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 earnings until age 53, and then 7.85% after that. Employers contribute 17.75% of their covered payroll.

Morocco, on the other hand, first created its retirement program in 1959. It’s a social insurance system that collects 3.96% of gross monthly earnings from workers to fund its distributions and 7.93% of gross monthly covered payroll from employers.

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In the United States, workers and employers split the bill evenly, kicking in 6.2% each to fund Social Security — but the self-employed must cover 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 deals with what each country’s program covers. For example, the United States stands with only Papua New Guinea, Suriname, Sierra Leone, Palau, Micronesia and the Marshall Islands in offering no cash maternity benefits. The U.S. is also part of a tiny fraternity that doesn’t provide cash 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 far less likely to cover unemployment or to pay household and family benefits. Unlike most countries, which omit one, the other or both, the U.S. provides coverage for both of those categories.

In total, more than 60 countries cover all seven of the previously discussed primary benefits categories, including the three that fall under “sickness and maternity.” Full-coverage countries include populous and wealthy developed countries like Canada and Japan, small or emerging countries like Estonia and the Kyrgyz Republic, and everything in between.

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Every other year, the Social Security Administration (SSA) publishes updates on the latest news involving social security programs worldwide, with Africa and the Americas getting biannual updates on the odd years and Europe, Asia and the Pacific getting even-year updates.

What About US Social Security Beneficiaries Living Abroad?

America has established bilateral agreements with other countries that coordinate comparable social security programs with that of the U.S. Called “totalization agreements,” they eliminate dual taxation and fill gaps in benefits for people who have worked abroad.

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

  • Azerbaijan
  • Belarus
  • Kazakhstan
  • Kyrgyzstan
  • Moldova
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

The Department of the Treasury never allows payment to North Korea or Cuba. If you’re an American citizen living in a restricted country, you can collect all payments that the SSA withholds when you move to a country where the agency can send money. Also, the SSA allows eligible citizens of roughly 30 countries to collect benefits no matter how long they stay outside the U.S.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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