NATIONAL PENSION ACT [See entire ACT]
CHAPTER IV PENSION BENEFITS SECTION 2 Old Age Pensions
- Article 61 (Old Age Pension Beneficiaries)
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(1) An old age pension shall be paid during the remaining lifetime to a currently or formerly insured whose insurance coverage period is at least ten years, beginning with the year he/she reaches age 60 (age 55 for employees in special occupational categories).
(2) Notwithstanding paragraph (1), where a currently or formerly insured whose insurance coverage period is at least ten years is aged 55 or over and is not engaged in income-earning activities prescribed by Presidential Decree, he/she may receive, if he/she so desires, a specified amount of pension (hereinafter referred to as "early old age pension") during his/her remaining lifetime from the time the person in question requests such pension, even though he/she has not reached age 60.
Enforcement Ordinance
- Article 45 (Income-Earning Activities)
(1) "Income-earning activities prescribed by Presidential Decree" referred to in Articles 61 (2) and 63-2 of the Act shall be activities generating income, where an amount obtained by dividing the aggregate of incomes in the following subparagraphs by the number of months a person is engaged in an activity (referring to the number of months in which a person engages in an activity in the relevant year; and a period of less than a month shall be deemed one month) exceeds an amount calculated pursuant to Article 51 (1) 1 of the Act:
1. Deleted;
2. Business income falling under Article 19 (2) of the Income Tax Act;
3. Earned income falling under Article 20 (2) of the Income Tax Act.
(2) Where the Service calculates the amount of income pursuant to paragraph (1), it shall calculate the amount of income, for the year in which entitlement to receive an old age pension under Article 61 of the Act (hereinafter referred to as "entitlement to a pension" in this paragraph) arises, based on the amount obtained by dividing the aggregate of the amounts in each of the following subpagraphs by the number of months during which a person has engaged in income earning activities from the month following the month entitlement to a pension arises: Provided, That where the month entitlement to a pension arises is December, it shall calculate the amount of income based on the amount of income in the following year and the number of months he/she has engaged in income earning activities:
1. Business income under Article 19 (2) of the Income Tax Act: The aggregate of business incomes generated from the month following the month entitlement to a pension arises;
2. Earned income under Article 20 (2) of the Income Tax Act: The aggregate of the following amounts:
(a) Monthly income: The aggregate of the amount of income generated from the month following the month entitlement to a pension arises;
(b) Income paid at a specific point of time by fixing a period subject to payment, such as quarterly payment (hereinafter referred to as "regular income" in this subparagraph): The amount calculated by multiplying an amount converted to a monthly based figure by dividing regular income paid from the month following the month entitlement to a pension arises by the period subject to payment, by the period subject to payment from the month following the month entitlement to a pension arises;
(c) Income paid at a specific point of time without fixing a period subject to payment (hereinafter referred to as "temporary income" in this subparagraph): The amount calculated by multiplying an amount converted to a monthly based figure by dividing temporary income accrued from the month following the month entitlement to a pension arises by the number of months a person has engaged in income earning activities within the relevant year (only applicable to the period in which he/she has engaged in activities in the place of business which generated temporary income) by the number of months he/she has engaged in income earning activities (only applicable to the period in which he/she has engaged in activities in the place of business which generated temporary income) from the month following the month entitlement to a pension arises.
(3) Where the Service pays pension benefits to an old age pension beneficiary under Article 61 of the Act, it may reduce pension benefits for the pertinent year or suspend the payment of such pension benefits, based on data provided by the State, etc. pursuant to Article 123 (1) of the Act: Provided, That the same shall not apply where a beneficiary submits objective data proving income of the pertinent year.
(4) The Service shall determine an amount to be reduced or an amount, the payment of which is to be suspended for the pertinent year after the final return on the tax base of global income is filed under Article 70 of the Income Tax Act, and shall pay the adjusted difference by adding or deducting the said amount when it pays pension benefits: Provided That it shall collect the difference pursuant to Article 41 if no benefits are payable due to the death of a beneficiary, the suspension of payment of the total amount, etc.
- Article 62 (Addition of Amount based on Postponed Payment of Pension Benefits)
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(1) Where an annuitant of an old age pension referred to in Article 61 who is aged between 60 and under 65 (between 55 and under 60 for employees engaged in special occupational categories) wishes to postpone the payment of pension benefits, the Service may postpone, limited to only once, the payment of all or some of the pension benefits for the period before he/she reaches age 65 (age 60 for employees engaged in special occupational categories).
(2) Where an annuitant who applied for postponement of the payment of all of pension benefits pursuant to paragraph (1) wishes to resume receiving the pension benefits, or reaches age 65 (age 60 in case of an employee in special occupational category), the amount of pension benefits payable shall be calculated by adding the amount of an old age pension (excluding the amount of dependant pensions; hereinafter the same shall apply in this Article) under Articles 63 and 66 (3) payable at the time of applying for postponement of the payment of pension benefits, as adjusted according to Article 51 (2), to an amount equivalent to 6/1000 of the said adjustment, for each month postponed. In such cases, an amount equivalent to 6/1000 shall also be adjusted pursuant to Article 51 (2).
(3) An annuitant who intends apply for postponement of the payment of some of the pension benefits pursuant to paragraph (1) may file an application for postponement of payment of any of the following amounts, out of the old age pension amount:
1. 500/1,000 of the amount of old age pension;
2. 600/1,000 of the amount of old age pension;
3. 700/1,000 of the amount of old age pension;
4. 800/1,000 of the amount of old age pension;
5. 900/1,000 of the amount of old age pension.
(4) When an annuitant who has applied for postponement of the payment of some of pension benefits pursuant to paragraph (3), wishes to be paid all of the pension benefits, or reaches age 65, the amount of old age pension shall be the aggregate of the following amounts:
1. An amount of old age pension, payment of which is not requested to be postponed, as adjusted pursuant to Article 51 (2);
2. An amount of old age pension obtained by adding the amount, payment of which is requested to be postponed, and which is adjusted pursuant to Article 51 (2), to the 6/1,000 of the said adjustment, for each month postponed. In such cases, the amount equivalent to 6/1,000 shall be also adjusted pursuant to Article 51 (2).
- Article 63-2 (Amount of Old Age Pensions Depending on Income-Earning Activities)
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Where an old age pension beneficiary under Article 61 is engaged in income-earning activities prescribed by Presidential Decree, an amount calculated by subtracting the amount based on the following classification from the amount of old age pension (excluding the amount of dependant pension; hereinafter the same shall apply in this Article) under Articles 62 (2) and (4), 63, and 66 (2) shall be paid during the period between age 60 and under age 65 (between age 55 and under age 60 for employees engaged in special occupational categories). In such cases, no deduction shall exceed one half of the amount of an old age pension:
1. A person whose monthly amount of excess income (referring to an amount calculated by subtracting the amount calculated pursuant to Article 51 (1) 1 from the amount of monthly income of an old age pension beneficiary; hereinafter the same shall apply in this Article) is less than one million won: 50/1,000 of the amount of monthly excess income;
2. A person whose monthly amount of excess income is at least one million won and less than two million won: 50,000 won + (amount of monthly excess income ? one million won) × 100/1,000;
3. A person whose monthly amount of excess income is at least two million won and less than three million won: 150,000 won + (amount of monthly excess income ? two million won) × 150/1,000;
4. A person whose monthly amount of excess income is at least three million won and less than four million won: 300,000 won + (amount of monthly excess income ? three million won) × 200/1,000;
5. A person whose monthly amount of excess income is at least four million won: 500,000 won + (amount of monthly excess income ? four million won) × 250/1,000.
[This Article Newly Inserted by Act No. 11143, Dec. 31, 2011]
Enforcement Ordinance
- Article 45 (Income-Earning Activities)
(1) "Income-earning activities prescribed by Presidential Decree" referred to in Articles 61 (2) and 63-2 of the Act shall be activities generating income, where an amount obtained by dividing the aggregate of incomes in the following subparagraphs by the number of months a person is engaged in an activity (referring to the number of months in which a person engages in an activity in the relevant year; and a period of less than a month shall be deemed one month) exceeds an amount calculated pursuant to Article 51 (1) 1 of the Act:
1. Deleted;
2. Business income falling under Article 19 (2) of the Income Tax Act;
3. Earned income falling under Article 20 (2) of the Income Tax Act.
(2) Where the Service calculates the amount of income pursuant to paragraph (1), it shall calculate the amount of income, for the year in which entitlement to receive an old age pension under Article 61 of the Act (hereinafter referred to as "entitlement to a pension" in this paragraph) arises, based on the amount obtained by dividing the aggregate of the amounts in each of the following subpagraphs by the number of months during which a person has engaged in income earning activities from the month following the month entitlement to a pension arises: Provided, That where the month entitlement to a pension arises is December, it shall calculate the amount of income based on the amount of income in the following year and the number of months he/she has engaged in income earning activities:
1. Business income under Article 19 (2) of the Income Tax Act: The aggregate of business incomes generated from the month following the month entitlement to a pension arises;
2. Earned income under Article 20 (2) of the Income Tax Act: The aggregate of the following amounts:
(a) Monthly income: The aggregate of the amount of income generated from the month following the month entitlement to a pension arises;
(b) Income paid at a specific point of time by fixing a period subject to payment, such as quarterly payment (hereinafter referred to as "regular income" in this subparagraph): The amount calculated by multiplying an amount converted to a monthly based figure by dividing regular income paid from the month following the month entitlement to a pension arises by the period subject to payment, by the period subject to payment from the month following the month entitlement to a pension arises;
(c) Income paid at a specific point of time without fixing a period subject to payment (hereinafter referred to as "temporary income" in this subparagraph): The amount calculated by multiplying an amount converted to a monthly based figure by dividing temporary income accrued from the month following the month entitlement to a pension arises by the number of months a person has engaged in income earning activities within the relevant year (only applicable to the period in which he/she has engaged in activities in the place of business which generated temporary income) by the number of months he/she has engaged in income earning activities (only applicable to the period in which he/she has engaged in activities in the place of business which generated temporary income) from the month following the month entitlement to a pension arises.
(3) Where the Service pays pension benefits to an old age pension beneficiary under Article 61 of the Act, it may reduce pension benefits for the pertinent year or suspend the payment of such pension benefits, based on data provided by the State, etc. pursuant to Article 123 (1) of the Act: Provided, That the same shall not apply where a beneficiary submits objective data proving income of the pertinent year.
(4) The Service shall determine an amount to be reduced or an amount, the payment of which is to be suspended for the pertinent year after the final return on the tax base of global income is filed under Article 70 of the Income Tax Act, and shall pay the adjusted difference by adding or deducting the said amount when it pays pension benefits: Provided That it shall collect the difference pursuant to Article 41 if no benefits are payable due to the death of a beneficiary, the suspension of payment of the total amount, etc.
- Article 64 (Beneficiaries of Divided Pension, etc.)
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(1) When a person who has been married for at least five years (limited to the marriage period during which one’s spouse is under insurance coverage; hereinafter the same shall apply) meets all of the following requirements, he/she may be paid a specified amount of his/her spouse's old age pension (hereinafter referred to as "divided pension") during his/her lifetime, from the time:
1. When the person has divorced his/her spouse;
2. When his/her former spouse is a beneficiary of an old age pension;
3. When the person reaches age 60.
(2) The amount of the divided pension referred to in paragraph (1) shall be the amount obtained by equally dividing the amount of pension corresponding to the period of marriage out of the former spouse's amount of old age pension (excluding the amount of dependant pensions).
(3) A request for the divided pension referred to in paragraph (1) shall be made within three years after a person meets all of the requirements prescribed in paragraph (1).
- Article 65 (Relationship, etc. between Divided Pension and Old Age Pension)
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(1) A person's entitlement to a divided pension under Article 64 (1) shall not be affected even though his/her former spouse's entitlement to an old-age pension is suspended or terminates due to any cause attributable to his/her former spouse after the person has acquired entitlement to the divided pension.
(2) Notwithstanding Article 56, if a person becomes entitled to two or more divided pensions, he/she shall be paid the combined total of the two or more divided pensions: Provided, That if such person becomes entitled to two or more divided pensions and other pension benefits (excluding an old-age pension; hereafter the same shall apply in this paragraph), the two or more divided pensions shall be deemed one divided pension and he/she shall be paid either the divided pension or the other pension benefits at his/her option, and the unselected one shall not be paid.
(3) No beneficiary of a divided pension shall be deemed a beneficiary of an old age pension at the time of payment of the survivor pension under Article 72 (1).
(4) Where the beneficiary of a divided pension becomes entitled to an old age pension, he/she shall be paid the combined total of the amount of the divided pension and the amount of the old age pension, notwithstanding Article 56.
- Article 66 (Suspension of Payment of Early Old-Age Pensions)
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(1) If a person under age 60 who is receiving an early old-age pension under Articles 61 (2) and 63 (2) comes to engage in any of the income-earning activities referred to in Article 61 (2), the payment of an early old-age pension during such period shall be suspended.
(2) Where a person in whose case the payment of an early old-age pension is suspended pursuant to paragraph (1) resumes receiving the early old-age pension before reaching age 60 because he/she no longer engages in the income-earning activities, or where he/she has reached age 60, the amount of the early old-age pension payable shall be as follows:
1. The amount computed by adding the amount of dependant pensions to the amount computed by multiplying the old-age pension (excluding the amount of dependant pensions) under Article 63 (1), which is calculated by aggregating the insurance coverage periods before and after the suspension of payment, by the rate computed by deducting 5/1000 from the rate by age under Article 63 (2) applicable at the time of the resumed receipt of old-age pension, every month of the period during which the payment has been already received;
2. The amount of an early old-age pension before suspension, where the amount of an early old-age pension (excluding the amount of dependant pensions; hereafter the same shall apply in this subparagraph) calculated under subparagraph 1 is smaller than the amount of an early old-age pension before the suspension under paragraph (1).
