US / Japan Social Security Totalization Agreement
On February 20, 2004, the governments of Japan and the United States entered into a Social Security “totalization” agreement. This agreement expected to start Spring 2005, serves two primary purposes:
1 Eliminate dual Social Security taxation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. As a result of existing totalization agreements, U.S. workers and employers currrently are saving about $800 million annually in foreign taxes they do not have to pay.
2 Help fill gaps in benefit protection for workers who have divided their careers between the U.S. and another country, but who have not worked long enough in one or both countries to qualify for Social Security benefits. With totalization, workers are allowed to combine work credits from both countries to become eligible for benefits. The benefit amount paid is proportional to the amount of credits earned in the paying country.
(Source: US Social Security Online)