Starting October 20, Chinese Nationals and Others Barred from Making Retroactive National Pension Contributions... Dependent Pensions Also Subject to "Reciprocity"

National Pension Act amendment to be promulgated and take effect on October 20
President Lee Jae Myung orders application of "reciprocity"
Only documents submitted by October 19 will be accepted

Starting on October 20, nationals of countries that do not allow Koreans to make retroactive National Pension contributions, including China, will no longer be able to apply for retroactive contributions in Korea. Eligibility for the dependent family pension, which also provided additional pension benefits to family members living overseas, will be substantially restricted under the same principle.

Yonhap News Agency

According to the Ministry of Health and Welfare and the National Pension Service, among others, an amendment to the National Pension Act that passed the National Assembly plenary session on October 1 was approved by the Cabinet on October 13 and is scheduled to be promulgated on October 20.

A loophole had previously come to light that allowed foreign subscribers to qualify for benefits after contributing for just one month, then pay 119 months' worth of previously unpaid contributions in a lump sum and receive a pension for life. As cases of abuse increased, concerns arose over fairness to Korean nationals who had diligently paid their contributions, and President Lee Jae Myung directed that the principle of reciprocity be applied.

Once the amendment takes effect, only nationals of countries that allow Koreans to make retroactive contributions will be able to apply for them in Korea. Foreign nationals from countries to which reciprocity does not apply, including China, the United States and Canada, will be completely ineligible to apply.

The National Pension Service said in an internal notice, "Under the principle that the law in effect at the time of a decision applies, retroactive contribution applications will not be accepted from nationals of countries to which reciprocity does not apply if they have not submitted all required documents by October 19, the day before the effective date." This means that even those who have already submitted an application will not be eligible for an exception if they fail to provide the required documents by October 19.

The principle of reciprocity will also apply to the dependent family pension. Until now, concerns about fairness to Korean subscribers have been raised because additional pension benefits were paid even to foreign family members who had never entered Korea or lived overseas, making it difficult to verify whether they were actually dependents. Going forward, nationals of a country will be eligible for the benefit only if that country allows a dependent family pension for Koreans.

However, the amendment applies only to new beneficiaries, so existing foreign beneficiaries will continue to receive the benefit. Even existing beneficiaries will not be able to newly apply for and receive a dependent family pension for a spouse, child or parent who first meets the eligibility requirements after the law takes effect.

A Ministry of Health and Welfare official explained, "Under the social security agreement between the two countries, the United States is considered an 'equal-treatment country' that treats nationals of both countries equally. We therefore expect U.S. nationals to be able to receive the dependent family pension, even though they will not be able to make retroactive contributions."

The National Pension Service plans to finalize and implement detailed guidelines in line with the effective date of the amended law. At a parliamentary audit on October 14, National Pension Service Chairman Kim Seong-ju said, "Cases in which foreign nationals made short-term contributions and then paid retroactive contributions for a long period distorted the purpose of the system and led to controversy over fairness. We will do everything possible to ensure the amended law is implemented without a hitch."

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