Basic Old-Age Pension Eligibility

I currently live apart from my parents and send them a small amount of money each month as an allowance and living expenses. However, my parents seem to feel burdened by this and have told me to stop sending money.

1. Key Information

My parents are both out of work and given their age, it would be difficult for them to find another job, so I wanted to help even a little. In the meantime, I learned that something called the Basic Old-Age Pension (기초노령연금) exists, and I started looking into it.

The Basic Old-Age Pension is a monthly pension granted to elderly residents aged 65 or older living in Korea whose recognized income falls below the selection criteria threshold. It is designed to provide an income base for elderly people who have difficulty maintaining a stable income, ensuring a secure retirement.

This Basic Old-Age Pension was first introduced in July 2014 and continues to operate to this day. Many people confuse it with the regular Old-Age Pension (노령연금), but they are entirely different programs. I was familiar with the regular old-age pension but learned about the Basic Old-Age Pension for the first time. It is now officially called the Basic Pension (기초연금), and the pension amount is set each year by reflecting the previous year's consumer price inflation rate.

When applying for the Basic Old-Age Pension, households are classified into two types: single-person households and couple households. Even if a couple is living together but only one person applies for the pension, it is classified as a couple household.

2. Detailed Explanation

However, if either the applicant or their spouse receives pension benefits such as a civil servant pension, military pension, or special postal service pension, they are excluded from Basic Old-Age Pension eligibility, so please be aware of this.

Regarding eligibility, the recognized income amount is also evaluated. The recognized income is a combined figure consisting of the income-converted value of current assets and the monthly income assessment. If you want to calculate this yourself, it can be quite complex and difficult, so it is recommended to use the recognized income simulation calculator for a more straightforward calculation.

I was curious whether my parents would qualify, so I visited the Bokjiro (복지로) website and used their simulation calculator to check — it was easy to confirm. I also found that my parents do qualify for the Basic Old-Age Pension and looked into how much they could receive upon application.

If you meet the eligibility criteria, you can receive up to 492,000 won per month as a couple, and up to 307,500 won per month for a single-person household. However, there is an important factor to be aware of: the income reversal prevention reduction (소득역전방지 감액).

3. How to Apply

If the sum of the recognized income and the basic pension exceeds the basic pension selection criteria threshold, the amount exceeding the threshold is deducted from the basic pension. Therefore, if a single-person household's recognized income exceeds 1,492,500 won, the pension will be reduced by the amount that exceeds the threshold.

There are also couple reductions and National Pension linkage reductions. If both spouses receive the Basic Old-Age Pension, 20% of the pension amount is deducted. Additionally, the more one receives from the National Pension, the greater the potential reduction.

In my parents' case, these reductions did not apply, and since they met the eligibility requirements, all we needed to do was prepare the documents and apply right away.

The application was done through the Bokjiro website, and it was convenient because it could be completed via mobile. The application period starts the month before the month in which the applicant's 65th birthday falls. The required documents include: a government-issued ID, a copy of the bank account designated for receiving the pension, a rental agreement (if applicable), the Basic Pension application form, a financial information disclosure consent form, and an income and asset declaration form. Please refer to these requirements when applying.

My parents were also able to apply easily through me via mobile, so I hope it does not seem too daunting for others either.