Like each worker in India pays some contribution to Provident Fund from their earnings, each worker in the U.S. pays Social Security tax and Medicare tax to earn benefits after their retirement.

In past 10 years more than 500,000 young workers came to the U.S. from India and there may be many to come in future. Not all of them will settle down in the U.S., due to various reasons. During their employment they pay Social Security tax and Medicare tax (16 percent of total earnings or average of $8000 per year per worker) as per the U.S. regulations. And the catch is Social Security tax must be paid for 40 quarters-10 years to get any benefits after retirement.

For example each year 500,000 Indian citizens pay 500,000 X $8000 = $400,00,00,000 as Social Security and Medicare tax.

If a temporary worker stays in the U.S. for 5 years on an average then,
$400,00,00,000 X 5 = $200,00,000,000 paid as Social Security and Medicare tax to the U.S. government. However, not all of them settle down in the U.S. Mostly 60 percent (300, 000 approx.) come to the U.S. on temporary work visa (either H1B or L1) and leave after completing short-term assignments. When they decide to retire in India or anywhere else other than the U.S., they are not eligible to receive the Social Security benefits outside the U.S.

I have paid Social Security tax for last 9 years, which is around $60,000 equivalent to Rs.25,00,000. I have returned to India six months ago for good. As I have not completed 40 quarters (10 years) in the U.S., I have lost all the money I paid as Social Security and Medicare to the U.S. government. Like me thousands of Indians will be facing this problem. This is one of the reason, Indians don’t want to come back to India after working in the U.S. for some time.

India also has the Personnel Provident Fund program similar to the Social Security in the United States. Now, many of the U.S. citizens work in India due to the offshore phenomenon. U.S. nationals pay Provident Fund tax as part of their salary and our PF system allows anyone to withdraw money anytime. I strongly urge the U.S. and Indian Government to sign ‘Bilateral Social Security Agreements’ to consider the provision of Social Security benefits to temporary workers who decide to return to India.

This will help in the inflow of foreign fund to India as well as brain gain. This is imperative, because the U.S. considers workers from several countries eligible for these benefits, but not India! I would very much like to see India in this list.