From June 17, No Reduction in National Pension for Monthly Income Up to 5.19 Million Won

Ministry of Health and Welfare Enforces Amended National Pension Act
Up to 150,000 Won Reduction Based on Current Income
"National Pension Will Serve as a Pillar for Retirement Preparation"

Starting from June 17, the income threshold for reducing the national pension for seniors will be raised from 3.19 million won per month to 5.19 million won per month. If one's income does not exceed this threshold, the pension will not be reduced due to income.

The Ministry of Health and Welfare announced on June 16 that it will implement the revised National Pension Act, which improves the pension reduction system for seniors. Since the introduction of the national pension system in 1988, pension payments have been reduced for recipients whose income exceeds a certain level, in order to balance adequate retirement income with the financial stability of the fund. If a recipient's income exceeded the average monthly income (A-value) of all national pension subscribers over the past three years, the pension was reduced by up to 150,000 won. However, going forward, reduction will only be applied if the income is at least "A-value + 2 million won."

This year, the three-year average monthly income (A-value) of subscribers is 3,193,511 won. Starting from June 17, the threshold will be raised by 2 million won to 5,193,511 won. As a result, among the five existing reduction brackets, the first (income exceeding A-value but less than A-value + 1 million won) and second (income of at least A-value + 1 million won but less than A-value + 2 million won) brackets, which correspond to relatively lower income levels, will be abolished. For example, a recipient with a monthly income of 4.1 million won was previously subject to a reduction of 45,500 won under the first bracket, but going forward, as their income is less than 5.19 million won per month, no reduction will be applied.

For income earned in 2025, the revised standard will be applied based on the confirmed tax data from the National Tax Service, without requiring a separate application. For those whose pension has already been reduced, the reduced amount will be refunded automatically, without a separate application. Refunds will be processed automatically starting from the end of July, as soon as the National Pension Service obtains confirmed data from the National Tax Service, though individuals may also submit tax data directly to the pension service.

For this year's income, the raised threshold has already been applied since January. The Ministry of Health and Welfare expects that, with the improved reduction system, about 100,000 people each year will receive the national pension without reduction. As of the cumulative total in May, approximately 90,000 recipients have already had their pension reductions suspended for this year's income, and as a result of the system improvement, they received an additional 1.95 billion won in pension benefits. On average, each person received about 50,000 won more per month than before. For income earned in 2025, approximately 100,000 people will be eligible for a refund totaling about 4.45 billion won, with each person receiving about 600,000 won back.

Minister of Health and Welfare Chung Eun-kyung said, "We are striving to create an environment where seniors can prepare for their retirement without worrying about reductions in their national pension," adding, "We will continue to improve the system to ensure that the national pension remains a reliable support for a stable retirement."

This content was produced with the assistance of AI translation services.