Big Relief for NRIs: Social Security Contributions Abroad to Be Credited Directly to Indian PF Accounts
In a major move set to benefit millions of Indians working abroad, the Government of India is implementing Social Security Agreements (SSA) with multiple countries. This initiative ensures that Indian employees working overseas can now have their social security contributions transferred directly to their EPFO accounts in India, eliminating the risk of losing their hard-earned money upon returning home.
No More Lost Contributions: Government Ensures Indian Workers Get Their Dues
Indian professionals working in countries like the UK, Canada, Germany, Australia, Japan, and others often face an issue: a portion of their salary is deducted as a social security contribution in the foreign country, which they are not entitled to claim after returning to India. This leads to financial losses, especially for those on temporary work assignments.
To address this, the Ministry of Labour and Employment has signed Social Security Agreements (SSA) with more than 20 countries, and discussions are ongoing with several others including the United States.
What Is a Social Security Agreement?
Under the SSA, an Indian employee working temporarily in a foreign country will no longer have to contribute to that country’s social security system. Instead, the equivalent amount will be transferred to their Indian Provident Fund (PF) account managed by EPFO. This prevents double contributions and ensures the savings stay within the reach of the Indian worker.
UK Deal Finalized, Others in Progress
The UK and India have finalized the SSA terms, and official signing is expected shortly. This is particularly good news for over 60,000 Indian IT professionals currently working in Britain. Under this agreement, workers on assignments of up to three years will be exempted from paying into the UK’s social security system. Instead, their contributions will be redirected to their Indian PF account.
The government is also in talks with the United States to formalize a similar agreement. Once finalized, it will cover a significant portion of the Indian diaspora working in America.
How Will Indian Workers Benefit?
-
Avoid Double Deductions: Employees will not need to contribute to both Indian and foreign social security systems.
-
Direct PF Transfer: Deductions made by foreign employers will be sent to the Indian EPFO account.
-
Future Security: These contributions will be accessible upon retirement or under existing PF withdrawal rules.
-
Applicable for Temporary Assignments: SSA benefits apply to those working abroad for a limited period (e.g., 2–3 years).
What the Government Says
Union Labour Minister Mansukh Mandaviya recently stated,
“We are committed to protecting Indian workers abroad. We have requested the Ministry of Commerce to include SSA clauses in Free Trade Agreements (FTAs) so that Indian employees working overseas are guaranteed social security benefits back home.”
According to a recent report by the International Labour Organization (ILO), 64% of workers in India now receive social security, a dramatic rise from just 19% in 2015.
Countries That Have Signed SSA with India
Here’s a list of 21 countries where SSAs with India are already active or soon to be signed:
-
Australia
-
Austria
-
Belgium
-
Brazil
-
Canada
-
Czech Republic
-
Denmark
-
Finland
-
France
-
Germany
-
Hungary
-
Japan
-
South Korea
-
Luxembourg
-
Netherlands
-
Norway
-
Portugal
-
Quebec
-
Sweden
-
Switzerland
-
United Kingdom
What About the United States?
Negotiations with the United States are currently underway. Once this agreement is signed, it will provide relief to lakhs of Indian workers—especially from the IT, healthcare, and engineering sectors—who contribute heavily to the American social security system but often cannot claim the returns.
Final Word
This initiative by the Indian government is a significant financial safeguard for overseas Indian professionals, especially those on temporary assignments. With SSA now extending to major economies, Indian workers can rest assured that their social security savings will not be lost and will instead grow in their EPFO accounts back home.
This move not only improves financial well-being but also strengthens India’s position as a global workforce contributor with a secure social protection framework.
