Only 3 Foreigners Paid 1 Month and Did 119 Months of Catch-up Contributions, Only 1 Actually Receiving Pensions in Korea

Regarding the controversy that foreigners who worked in South Korea for just one month could make lump-sum retroactive contributions for 119 months of National Pension premiums to receive lifetime pensions—often referred to as a "hit-and-run" loophole—the Ministry of Health and Welfare conducted a full inspection including immigration records, confirming that only three individuals among all foreigners (including overseas Koreans) fall under this specific case.

Among them, only one person who continues to reside in South Korea is actually receiving the pension, and the vast majority of beneficiaries, including these individuals, were found to have lived in South Korea for most of their retroactive contribution periods.

Retroactive contributions allow individuals to make a lump-sum payment for past periods during which they could not pay premiums due to unemployment, business suspension, or career breaks, thereby extending their subscription period.

To receive a lifetime monthly old-age pension, the subscription period must exceed 10 years (120 months), and retroactive contributions can be used to fill in the missing period to qualify for the pension.

When the retroactive contribution system was implemented in 1999, there was no upper limit on the application period.

Later, in November 2016, the system was expanded to include periods of non-application such as non-income-earning spouses (full-time homemakers), leading to issues where individuals paid large sums at once to significantly increase their subscription periods. In response, the National Assembly revised the National Pension Act in December 2020 to limit the maximum retroactive contribution period to less than 10 years (up to 119 months).

According to the full inspection results released by the Ministry of Health and Welfare today, out of the 3 individuals matching the "1-month subscription + 119-month retroactive contribution" profile, only 1 overseas Korean residing in South Korea is actually receiving the old-age pension.

This recipient was confirmed to have physically resided in South Korea throughout the entire 119-month retroactive contribution period.

The remaining two individuals are the spouse of a South Korean citizen and an overseas Korean who previously held South Korean nationality and later acquired a foreign nationality. They also resided in South Korea for the entire retroactive contribution period and are currently maintaining their National Pension subscription qualifications without receiving pensions.

In addition, a detailed analysis of similar cases involving short-term subscribers who made retroactive contributions of 119 months or more revealed that the vast majority were actual residents in South Korea.

An overseas Korean who returned a lump-sum refund after a 1-month payment and made 119 months of retroactive contributions to receive a pension was found to have actually resided in South Korea for 116 months during the contribution period.

Similarly, a permanent resident currently receiving an early old-age pension in China after making 128 months of retroactive contributions prior to the introduction of the 119-month cap in December 2020 was found to have stayed in South Korea for 126 months out of the 128-month retroactive period.

Based solely on the full inspection results, most cases were far from the concern that short-term resident foreigners residing abroad would secure pension eligibility through retroactive contributions.

National Pension Service Chairman Kim Sung-joo also drew a line, stating that claims about working for just a month in Korea and collecting a pension for life are different from the facts.

This is because they actually fulfilled a total subscription period of 120 months by normally paying 119 months' worth of premiums in addition to the 1-month premium.

Chairman Kim stated that while we must be wary of excluding specific countries or sliding into hatred toward overseas Koreans, the system will be reviewed and improvement measures will be prepared to align with the purpose of the social security system, which is to faithfully contribute when one has income.
※ Please note: This article was translated by AI and may contain errors.