South Korea will require proof of actual residence in the country before foreigners can make retroactive national pension contributions, closing a loophole that allowed some to qualify for lifetime benefits after working here for as little as one month.
One Month of Work, 119 Months Paid at Once: Foreign Back-Payments Up 20-Fold in a Decade
The Ministry of Health and Welfare and the National Pension Service said on the 1st that the government will tighten the standard for the domestic residence period recognized when foreigners apply to pay past contributions.
The back-payment system, introduced in 1999, lets subscribers later pay contributions for periods when they could not do so because of job loss, business closure, marriage or childbirth. Since November 2011, periods of exclusion from coverage — such as time as a non-earning spouse or a recipient of basic livelihood benefits — have also been eligible, for up to 119 months.
The problem emerged as some foreigners used the system to reach the 120-month, or 10-year, minimum subscription period required for an old-age pension after working only briefly in South Korea. Until now, foreigners could make additional payments covering less than 10 years if they met requirements including being registered as a foreign resident during the period in question.
The scale of such payments has grown quickly. According to data obtained from the National Pension Service by Rep. Han Ji-a of the People Power Party, a member of the National Assembly's Health and Welfare Committee, applications by foreigners rose about 20-fold, from 43 in 2015 to 848 in 2024. Over the same period, the amount paid climbed 26.9-fold, from 203.3 million won to 5.461 billion won. Among applicants from 2020 to 2022, Chinese nationals accounted for 67.6%, the largest share, followed by Americans at 13.7% and Canadians at 8.4%.
Extreme cases have surfaced. According to Yonhap News on the 21st of last month, a Chinese national identified as A, who entered the country on a working visit (H-2) visa, was enrolled in the pension scheme at a South Korean workplace for one month before turning 60. Although eligible only for a lump-sum refund, the person paid 119 months of contributions retroactively to reach 120 months and now receives a monthly old-age pension.
A Chinese national identified as B, who had worked for one month as a daily-hire construction worker, received a lump-sum refund upon leaving the country and later re-entered. Through one month of enrollment, one month of voluntary continued enrollment, repayment of the refund already received and 119 months of back-payments, the person secured a total subscription period of 121 months and became a pension recipient.
A Chinese national identified as C, who holds permanent residency (F-5) status, was enrolled for nine months and then paid 128 months of contributions retroactively to claim an early old-age pension. The person is understood to be receiving the pension while living in China.
President: Short-Term Residents Holding Back-Payment Rights Is a Contradiction
As such cases became known, criticism grew that the system — designed to supplement retirement income for people with career interruptions and low-wage workers — was being used by foreigners as a vehicle for what some call pension investing.
Administrative gaps have also been raised. It is difficult to immediately confirm whether pension recipients living abroad have died, and there are limits to verifying residency status and marital or family relationships. Critics have also noted a legal inconsistency: under the National Pension Act, foreigners cannot become voluntary subscribers, yet the current system allows them to make back-payments for exclusion periods spent as a non-earning spouse.
Calls for change have also come from politicians. Kim Tae-kyu, chief floor spokesperson for the People Power Party, said on the 30th of last month, "A Chinese national who worked in South Korea for one month is paying 119 months of contributions at once and receiving an old-age pension for life," arguing that eligibility for back-payments by foreigners and the requirements for dependent pension benefits should be overhauled.
Earlier, at a Cabinet meeting chaired by President Lee Jae-myung on the 24th of last month, officials reported on the status of foreign back-payments and proposed improvements. Lee said, "It is a contradiction in itself that foreigners who have lived in the country only briefly qualify for back-payments," and instructed officials to move quickly to tighten eligibility based on factors such as actual residence in South Korea.
Actual Residence, Not Foreign Registration; Overseas Recipients Checked Twice a Year
The government's first measure is to change how the domestic residence period required for back-payments is determined. Where the standard was previously foreign registration and the period of maintained residency status, authorities will now verify whether the applicant actually lived in the country.
To that end, National Pension Service guidelines will be revised and applied immediately. Foreigners applying for back-payments must submit a certificate of entry and exit records along with documents proving their marital relationship. From the month of entry through the month of departure, only months in which they were actually in the country for 15 days or more will count as residence. Periods spent abroad will be excluded.
The government is also pursuing legal revisions for a more fundamental overhaul. The plan would extend the principle of reciprocity — currently applied to pension enrollment and lump-sum refunds — to back-payments. Under it, nationals of another country would be allowed to make back-payments in South Korea only if that country permits South Koreans living there to do the same.
Management of overseas pension recipients will also be strengthened. Checks on whether recipients are still alive will increase to twice a year from once a year. The government also plans to prepare broader measures across the pension system, including for dependent pension benefits, which critics say can extend payments to family members living abroad.
Health and Welfare Minister Jung Eun-kyeong said, "Because the national pension is a system to guarantee retirement income for people living in the country, we will make sure there are no cases of abuse in which someone stays only briefly and still collects a pension."
