The Social Security Agreement ('the SSA') between India and Japan will come into force with effect from 1 October 2016. Accordingly, it's time that the employers who have assigned employees between India and Japan should take steps to claim applicable benefits under the SSA.
Action points
- In respect of Japanese employees currently on assignment to India, the employers should begin the process of applying for Certificate of Coverage in Japan and also stop contributing to Indian social security immediately from the effective date of Certificate of Coverage. However, it is advisable to continue reporting the employees in Form IW-1 but now as 'excluded employees'. Further after the end of assignment, such employees can claim withdrawal from Provident Fund and Pension Scheme.
- In respect of Japanese employees who have already left India after end of assignment, claim can be filed for lump-sum withdrawal from Provident Fund. Also the employer should assess the eligibility to obtain benefit from Pension Scheme and claim applicable benefit
- In respect of Japanese employees who are scheduled to come on assignment to India on or after 1 October 2016, the employer should obtain Certificate of Coverage in Japan prior to start of assignment in India. Also the employer should provide information of new expatriate employees in Form IW-1 as 'excluded employees'
Similarly, in respect of Indian employees on assignment to Japan, the employers should obtain Certificate of Coverage in India and / or claim applicable benefits from Japan social security
Nangia's take
SSA between India and Japan has taken almost 4 years to come into force since it was signed in November 2012. Entry into force of this SSA is a welcome move since this SSA will have a major impact for employers who have employees assigned between India and Japan.
Such employees may now remain covered under their home country social security during the period of assignment and claim exemption from the host country social security.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
