The national pension deferred payment (additional payment) system is a system that provides an opportunity to expand the right to receive pension benefits by extending the subscription period by paying during the payment exception period when you have the ability to pay pension insurance premiums during the period of exemption from paying pension insurance premiums due to unemployment, etc. while enrolled in the national pension plan.
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1. What is the national pension extra payment system?
2. Subject of extra payment and amount
3. How to apply for the extra payment system
4. Fact check related to the national pension
1. What is the national pension extra payment system?
It is a system that allows you to extend the subscription period of the national pension by paying the pension insurance premiums that you could not pay during the unemployment period later during the period of service. In simple words, it is a system that pays insurance premiums that could not be paid in the past later. It is a system that many people use because the amount of pension that can be received at the time of receiving benefits increases when the subscription period is extended.
1) Due date: changed from maximum 20 years to 10 years
Up to 20 years, the maximum payment period was 20 years. 10 years (119 months) changed. This is because there have been many cases of abuse.
For example, a 50-year-old woman in Songpa-gu paid 101.5 million won in one lump sum for 20 years of insurance, which she had never paid before. The national pension increased by 830,000 won from 350,000 won to 1.18 million won.
This is an additional 9.96 million won per year. She says the average age of women will reach 90 in 2030, so she will receive about 360 million won over 30 years.
To prevent such cases, the maximum due date has been changed to 10 years. However, despite this, the number of applicants for extra payment is increasing every year. Those who have not prepared for old-age pension, those who are exempt from payment, and full-time housewives can use the extra payment system.
2. Subject of extra payment and amount
Let’s go into more detail.
1) Subsequent payment
– Subscribers who have a payment exception period due to business suspension, unemployment, etc.
– Non-income spouse
– Basic beneficiary
– Those who have served in the military since January 1, 1988
– In the event that the subscription history is discontinued due to loss of national pension eligibility due to an unknown reason for more than one year
2) Terms of later payment
There are no conditions for exemption from payment, but there are restrictions for full-time housewives. After the introduction of extra payment on April 1, 1999, it is possible only for the period after the premium has been paid at least once.
ex)
A, a full-time housewife with just one month of work experience in January 2010 → From February 2010, up to 119 months of extra payment is possible
Mr. B, a full-time housewife who has never worked → Impossible to pay extra
In order to take advantage of the national pension extra payment system, you must leave a history of paying at least one month at any place.
3) Later payment method
① Lump sum payment
② installment payment
– Less than 1 year: 3 installments possible
– More than 1 year ~ less than 5 years: Payment in 12 installments possible
– Over 5 years: Payment in 24 installments possible
4) How much will I get if I pay extra?
Pension insurance premiums are currently 9% of income tax. Because of this, it depends on how much you paid for the subscription period. Let’s take a full-time housewife as an example.
① In the case of Mr. A, a full-time housewife who has been working for 1 month
Minimum insurance premium to be paid: KRW 90,000 (9% of the median income of local subscribers, KRW 1,000,000)
Upper limit: KRW 228,510
→ If you pay extra 90,000 won for 119 months, you will receive a pension of about 200,000 won
→ If you pay extra 200,000 won for 119 months, you will receive a pension of about 260,000 won
If you think that you will receive 200,000 won every month from the age of 60 until you die by paying an additional 90,000 won per month for 10 years, you should use it unconditionally, right?
② Current employer or local subscriber
Additional payment based on current insurance premiums
5) When is the best time to pay extra?
The earlier the extra payment, the better. This is because the income replacement rate was 43.5% this year and will drop to 40% by 2028. This means that even if you pay the same amount, you will receive less money each year. It is better to pay early and receive money quickly, even within a year.
3. How to apply for the extra payment system
You can apply both by visiting the National Pension Service and through the website.
1) Visit the website of the National Pension Service
Electronic Civil Petition – Move to the Personal Civil Petition category.
2) Personal authentication
Personal authentication is required to use the service. It is possible to authenticate with a joint certificate or KakaoTalk.
3) Personal service – Move to report/application category
You can apply in the application category for additional insurance premium payment.
If you are not currently working and are not paying the national pension, you need to consult with an employee regarding the application for payment. Please contact each branch.
You can take advantage of the direct connection to the branch office.
4. Fact check related to the national pension
There is a lot of controversy these days about the depletion of the national pension. Some say it is an exaggerated story, and some say that it is right that the national pension will be exhausted by 2050 at the current level.
What I want to say is that even if that is still true, there are 30 years left and we will somehow reform the system within that time. If you are currently in your 40s or 50s, you need to actively utilize the extra payment system.
I will attach articles related to this and helpful posts such as retirement pensions and pension savings funds, so please read them.
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