10.22.1.30 Social Security System in Korea
Korea's social security system
The old-age pension in Korea is managed by the National Pension Service.
The Korean national pension scheme started in 1988.
The Ministry of Health and Welfare (MoHW) is responsible for making policy decisions and supervising the operation of the National Pension Scheme (NPS). The National Pension Corporation administers the program, collects contributions and pays benefits.
The NPS is a single national pension system and covers most employees and self-employed persons aged 18-59 in Korea. It also provides for voluntary coverage for older people aged 60-64 and coverage for the unemployed. The general coverage criteria for the NPS are age and residence. Payments are regulated under the National Pensions Act 1986.
The scheme does not cover government officials, military personnel, private school teachers and specially designated post office workers who are covered under their own separate schemes. There are also other groups such as illegal stayers and industrial trainees who cannot be subscribed to the NPS.
Korean retirement age is being raised from 60 to 65 in one year increments scheduled every 5 years between 2013 and 2033.
At least 20 years of coverage is required for a full old-age pension. Reduced benefits are payable at age 60 with at least 10 years of coverage.
The old-age pension is generally composed of 2 factors. One is the Basic Pension Amount (BPA), based on the current or former insured person's contributions paid in the event of old age, disability and death etc. This amount varies depending on the benefit type, insured period, the age of the first benefit, existence of income, and the degree of disability.
The other is the Additional Pension Amount (APA) or Dependant Supplement. This is a small additional annual amount paid to pensioners for their dependants.
Lump sum refunds of contributions are payable to workers with less than 10 years coverage who are 60 or to Korean nationals who permanently emigrate from Korea.
Note: Prior to the start of the Agreement, Australian citizens could not claim a lump sum refund.
Act reference: SS(IntAgree)Act Schedule 21 Republic of Korea