Bureau and Corporate Funded Body
The national pension plan is part of the social security system which is designed to provide a degree of stability in people’s everyday life and welfare. Under the national pension plan, the following pension is paid: the pension for the elderly, which is designed to make up for the loss of earned income due to old age; the pension for the bereaved, which is designed to make up for the loss of income due to the death of the main income earner; the disability pension, which is designed to make up for the loss of income due to the loss of ability to work due to disease or disability.
This is a system designed to provide citizens of the relevant countries with benefits, such as exemption from dual insurance subscription, adding up of the subscription period, equal treatment, guaranteeing of wage remittance out of the county, through the adjustment of differences between them. Social security agreements are divided into a totalization agreement and a contributions only agreement, depending on the scope of application.
Countries that have signed social security agreements with South Korea: Canada, the United Kingdom, the United States, Germany, China, the Netherlands, Japan, Italy, Uzbekistan, Mongolia, Hungary, France, Australia, the Czech Republic, Ireland, and Belgium (16 countries).
Foreigners meeting the relevant requirements can receive the pension for the elderly, the pension for the bereaved, and the disability pension, as Koreans do under the National Pension Act. Effective from May 11, 2007, the country pays a lump-sum refund for foreigners returning home after subscribing to the National Pension Program as holders of E-8/Training employment, E-9/Non-professional employment, and H-2/Working visit.
※ Effective from August 29, 2007, a lump-sum refund is paid to foreigners leaving the country upon request. (The relevant application can be submitted a month before departure from the country by submitting a document verifying the plan for departure, including an air ticket.)
※ The foregoing request may be made through an agent or by mail. Requests made through an agent or by mail should follow a separate procedure for identification.
Applying for health insurance in Korea is optional. However, once insured, it is not possible for a foreign national to cancel his/her health insurance for as long as he/she is employed.
If a foreign national leaves Korea for more than one month, the National Health Insurance Corporation will have their health insurance automatically canceled upon notification by the Immigration Office.
Average monthly income (month) × Insurance fee rate (5.08%) The employee and employer will pay an equal (50% each) contribution towards the total calculated amount.
Employment insurance is part of social security insurance. Its purpose is to encourage stable employment and provide an insurance premium to people who lose their job. The country has adopted closely-linked labor market policies, such as employment stability programs and vocational skills enhancement programs.
Employers with at least one employee since October 1, 1998 must apply for unemployment insurance.
The following sectors are excluded from the scope of employment insurance, as it is very difficult to manage their workplaces and the insured in consideration of their characteristics.
Those eligible for employment in Korea, including short-term employees, professors, foreign industry trainees, foreign workers with residence status.
Foreign workers not mentioned above are classified as foreign workers who are ineligible for unemployment insurance.
When a worker is unemployed a grant is provided to help ease their financial difficulties and facilitate their transition to another job. Included in the unemployment grant are a job-seeking allowance and an allowance intended to accelerate their re-employment.
Unemployment grant calculations: Unemployment grant total = 50% of avg. income X daily earnings
90% of minimum wage X daily working hours (8 hours)(The minimum wage is subject to change on a yearly basis; therefore, the minimum amount granted under unemployment insurance is also subject to yearly change.)
According to one’s age at the time of unemployment and the period insured, one can receive an unemployment grant from a minimum of 90 days to a maximum of 240 days.
In order to receive unemployment insurance, one needs to visit an employment support center with an identification card immediately upon becoming unemployed. Once at the employment support center, it is necessary to fill out and submit an employment seeker application form and a revenue and expenditure qualification application form. Once a person’s eligibility for an unemployment grant has been recognized, he/she should visit the employment support center every week and submit a report on positive efforts made for reemployment in order to continue receiving the unemployment grant. The grant will cease once the 12-month period expires. Once the unemployed individual gains employment or gains a source of income; he/she must report it immediately.
Industrial accident compensation insurance is a statutory insurance designed to guarantee the income of an injured worker and his/her family. Under the Labor Standards Act, the State collects insurance premiums from employers and pays compensation to injured workers on behalf of their employers.. The coverage now includes new industrial diseases, work-related exhaustion and stress. Although prevention is the best policy, compensation is provided to workers who are injured or to family members of deceased workers.
Employers with at least one employee since July 1, 2000 must apply for industrial accident compensation insurance.
Eligibility of foreign workers