Korean gov’t misses 70% target of basic senior pension recipients

[Photo by Lee Chung-woo]

The South Korean government missed its target of providing 70 percent of the 70 percent income bracket with basic state pension payments last year, raising the need for a reform in the overall pension scheme.

According to data released by the Ministry of Health and Welfare on Sunday, 66.9 percent of the entire 9.27 million people aged 65 and older received pension benefits last year. It is the 10th year that the government missed its 70 percent target since the basic pension plan was introduced in 2014.

The low figure is attributed to multiple factors, such as that many eligible pensioners include those with uncertain residential information and non-applicants unwilling to disclose their asset information.

Individuals who already receive lump-sum pensions for specialized services, such as civil service or military pensions, may choose not to apply for the basic pension.

The basic pension is offered to the lowest 70 percent income bracket among people aged 65 and older, with income thresholds set at 2 million won ($1,502) for individuals and 3.23 million won for couples.

This year, the monthly basic pension amount is 323,180 won, with a 20 percent reduction applying to married couples, resulting in a payment of 517,080 won per month.

The Financial Calculation Committee in charge of pension reforms proposed an overhaul in its latest report published on September 1, citing an increase in pension amounts while reducing the eligibility threshold for basic pensions.

The government is expected to take the proposal into account for a new National Pension Comprehensive Operation Plan, which will be submitted to the National Assembly in October.