For the United States, the Agreement applies to the Old-age, Survivors, and Disability
Insurance (OASDI) programs and the corresponding tax laws (Federal Insurance Contributions
Act (FICA) taxes for employment and Self-Employment Contributions Act (SECA) taxes
for self-employment). The Agreement does not apply to Medicare provisions. If an employee
is exempt from U.S. Social Security coverage under this Agreement, neither the employee
nor the employer share of the FICA tax is due as long as the exemption is effective.
A self-employed person is exempt from paying SECA taxes (equivalent to the employee
and employer shares of the FICA tax) for any period the exemption is effective.
The U.S. laws to which the Agreement applies are title II of the Social Security Act
except section 226 (Medicare benefits), 226A (Medicare coverage for certain persons
suffering from renal disease), and section 228 (special age-72 payments-Prouty benefits).
The Agreement excludes hospital insurance under Medicare. It is understood, though
not specified, that persons to whom the Agreement applies who qualify independently
for Medicare hospital insurance benefits would be entitled to receive such benefits.