SSR 74-19: SECTIONS 202(t)(1), 202(t)(2), and 202(t)(3) (42 U.S.C. 402(t)(1)(3)). -- NONPAYMENT OF BENEFITS -- ALIEN BENEFICIARIES OUTSIDE THE UNITED STATES -- TRUST TERRITORY OF THE PACIFIC ISLANDS

20 CFR 404.460 and 404.463

SSR 74-19

Questions have been raised concerning the application of the alien

non-payment provisions in section 202(t) of the Social Security Act, as

amended, to the inhabitants of the trust Territory of the Pacific Islands.

These questions concern specifically section 202(t)(2) and 202(t)(3) of

the Act, two exceptions to the prohibition on benefit payments to aliens

in section 202(t)(1).

Section 202(t)(1) provides that no monthly benefits shall be paid to any

individual who is not a citizen or national of the United States for

certain months during which such individual is outside the United States.

Section 202(t)(3) of the Act provides that section 202(t)(1) shall not

apply in any case where its application would be contrary to any treaty

obligation of the United States in effect on the date of the enactment of

(the) subsection (i.e., August 1, 1956). And, section 202(t)(2) provides

that section 202(t)(1) shall not apply to any individual who is a citizen

of a foreign country which the Secretary finds has in effect a social

insurance or pension system of general application under which benefits

are paid on account of old-age, retirement of death, and under which

individuals who are citizens of the United States but not citizens of such

foreign country and who qualify for benefits under such social insurance

or pension system, are permitted to receive benefits without regard to the

duration of their absence from such foreign country.

m of general application under which benefits

are paid on account of old-age, retirement of death, and under which

individuals who are citizens of the United States but not citizens of such

foreign country and who qualify for benefits under such social insurance

or pension system, are permitted to receive benefits without regard to the

duration of their absence from such foreign country.

With respect to section 202(t)(3), the issue is whether the trusteeship

agreement between the United States and the Security Council of the United

Nations may properly be consider a "treaty obligation of the United

States" under that paragraph of the Act. In the event of the trusteeship

agreement may be considered a "treaty obligation" under section 202(t)(3),

there is a further question as to whether the suspension of benefits to

individuals who are inhabitants or citizens of the Trust Territory (but

not citizens or nationals of the United States) would be contrary to any

provision of the trusteeship agreement. (An answer in the negative to

either question would mean that the section 202(t)(3) exception could not

be applied to citizens or inhabitants of the Trust Territory).

With respect to section 202(t)(2), the question is whether the Trust

Territory may be considered a "foreign country" so that its citizens would

be "citizens of foreign country" within the meaning of section 202(t)(2).

If the Trust Territory is a "foreign country" and its citizens are

"citizens of a foreign country" under section 202(t)(2), the nonpayment

provisions of section 202(t)(1) would not be applicable to such citizens

should the Secretary find that the Trust Territory has a social insurance

system which meets the conditions prescribed in section 202(t)(2).

hin the meaning of section 202(t)(2).

If the Trust Territory is a "foreign country" and its citizens are

"citizens of a foreign country" under section 202(t)(2), the nonpayment

provisions of section 202(t)(1) would not be applicable to such citizens

should the Secretary find that the Trust Territory has a social insurance

system which meets the conditions prescribed in section 202(t)(2).

The agreement respecting the trusteeship for the Trust Territory was

approved by the Security Council of the United Nations on April 2, 1947.

On July 18, 1947, a joint resolution of both Houses of Congress (H.J. Res.

233, 80th Cong. 1st Sess., 61 Stat. 397 (1947) authorized the President of

the United States to approve the trusteeship agreement on behalf of the

United States. The President approved the agreement on July 18,

1947 .

The trusteeship agreement is not a "treaty" within the restrictive

constitutional usage of that term. Article II, section 2, clause 2, of the

U.S. Constitution provides that the President shall have the power, by and

with the advice and consent of the Senate, to make treaties provided

two-thirds of the Senators present concur therein. The trust agreement

(which was approved by both Houses of Congress by joint resolution prior

to presidential approval) did not receive the concurrence of two-thirds of

the Senate and therefore is not a "treaty" in the constitutional sense.

This distinction is critical, since the legislative history of section

202(t)(3) indicates that when Congress enacted that paragraph, it had in

mind treaties in the constitutional sense (and not executive agreements or

other international agreements or compacts). See Hearings on the Social

Security System before the Subcommittee on Social Security of the House

Committee on Ways and Means, 83rd Cong., 1st Sess., pt 2, pp. 152-168.

islative history of section

202(t)(3) indicates that when Congress enacted that paragraph, it had in

mind treaties in the constitutional sense (and not executive agreements or

other international agreements or compacts). See Hearings on the Social

Security System before the Subcommittee on Social Security of the House

Committee on Ways and Means, 83rd Cong., 1st Sess., pt 2, pp. 152-168.

Nevertheless, even if the word "treaty" in section 202(t)(3) includes the

subject trusteeship agreement, the application of section 202(t)(1) to

citizens of the Trust Territory clearly is not contrary to may obligation

undertaken by the United States in the subject agreement. The application

of the alien nonpayment provisions of section 202(t)(1) would be contrary

to provisions of the trusteeship agreement only if such provisions

explicitly placed the citizens of the Trust Territory on a parity with

American citizens in the application of laws and regulations implementing

the United States' social insurance program or in some other manner

created for the citizens of the Trust Territory a clear expectancy of

benefit payments under the United States social security program. The

trusteeship agreement, however, purports to restrict the United States solely in its role as administering authority of the Territory

(while discharging its obligations under the United Nations Charter).

There are no limitations in the agreement in the agreement on the inherent

sovereign power of the United States to establish a social insurance

system suitable to its national needs as it perceives them, to prescribe

conditions for payment of benefits thereunder, and to treat under that

system different classes of individuals differently, subject, of course,

to constitutional limitations.

here are no limitations in the agreement in the agreement on the inherent

sovereign power of the United States to establish a social insurance

system suitable to its national needs as it perceives them, to prescribe

conditions for payment of benefits thereunder, and to treat under that

system different classes of individuals differently, subject, of course,

to constitutional limitations.

The remaining question is whether the Trust Territory may be considered a

"foreign country" for purposes of section 202(t)(2) of the Act. At least

two Federal courts have resolved this issue for purposes of another

Federal statute, the Federal Tort Claims Act. That Act precludes any

recovery for any tort claim which arises in a"foreign country." In a case

where a tort claim arose from injuries sustained on an island which is

part of the Trust Territory, the United States Court of Appeals for the

Second Circuit held that the Trust Territory is a "foreign country"within

the meaning of the provision of the Tort Claims Act which precludes claims

arising in a "foreign country." Callas v. United States, 253 F.2d

838 (2nd Cir., 1958). See also Burnell v. United States, 77 F.Supp

68, 72 (S.D.N.Y., 1948)

There is further reason for interpreting the words "foreign country" in

section 202(t)(2) to include the Trust Territory. It would seem to be of

the Trust Territory (who by virtue of such citizenship would not be a

citizen or national of the United States) may not be a citizen of

a"foreign country." The ostensible purpose of that paragraph is to enable

citizens of any internationally recognized political entity to be excepted

from the nonpayment provisions of section 02(t)(1) when and if a social

insurance or pension system of such entity meets the requirements of

section 202(t)(2)

would not be a

citizen or national of the United States) may not be a citizen of

a"foreign country." The ostensible purpose of that paragraph is to enable

citizens of any internationally recognized political entity to be excepted

from the nonpayment provisions of section 02(t)(1) when and if a social

insurance or pension system of such entity meets the requirements of

section 202(t)(2). It could be said that section 202(t)(2) envisages as a

"foreign country" any intentionally recognized political entity for a

dependency or territory thereof) which is not geographically part of the

"United States," as defined in section 210(i) of the Act.

Accordingly, it is held that the trusteeship agreement between the

United States N.U. Security Council providing for administration of the

Trustee Territory of the Pacific Islands, does not constitute a "treaty"

for purposes of section 202(t)(3) of Social Security Act. It is further

held that such Trust Territory is a "foreign country" for purposes of

section 202(t)(2) of the Act.