The South Korean government is advancing a reform aimed at optimizing the criteria for receiving the basic pension. According to a report by Edaily on April 15, the Ministry of Health and Welfare plans to include overseas financial assets and virtual assets in the income calculation for the basic pension to prevent individuals with substantial assets from exploiting loopholes in the current system to improperly receive pensions. This reform aims to enhance the fairness of the pension system and ensure that only eligible low- or middle-income groups can benefit from it.
Key Content:
The background of this reform is that the Audit Office of Korea previously pointed out that the current method of selecting recipients for the basic pension fails to adequately reflect individuals' asset situations, leading to unfairness. Therefore, the government has decided to revise the Basic Pension Act and review the system for deducting basic assets such as housing and land. Additionally, the government plans to introduce policies similar to those in OECD countries like Australia, Canada, Norway, and Sweden to restrict pension eligibility for long-term overseas residents returning to Korea. This reform was proposed in 2025 and is currently under discussion in the South Korean National Assembly.
Expected Impact of the Reform:
The South Korean government believes that the new pension system will help prevent wealthy groups from exploiting loopholes related to unaccounted overseas financial and virtual assets to obtain pensions, ensuring that this welfare system can more fairly serve those truly in need of assistance. At the same time, the government will re-evaluate the methods for assessing family property and wealth to ensure that pension recipients accurately reflect financial capability.
