NATIONAL PENSION SERVICE
Foreigners 18-60 years old who are residing and working in Korea, regardless of their nationality, should be covered under the National Pension Service (NPS). Foreigners whose countries do not cover Korean nationals, however, are excluded from the coverage of NPS. Even so, if there are relevant provisions under the Social Security Agreement (SSA) between Korea and any foreign countries, those provisions will be applied.
To protect the rights of foreigners, the SSA is publishing a series of articles spotlighting SSAs in cooperation with Gwangju News. This month’s featured SSA is for foreigners from Germany.
SSA between Korea and Germany entered into force : Jan. 2003
Exemption from Dual Coverage
① In general, an employee is subject to the legislation of the contracting country in which he/she is employed.
② A self-employed person is subject to the legislation of the contracting country in which the person works.
③ If a self-employed person who ordinarily resides and works in the territory of one contracting country works temporarily, defined as five years or less, in the territory of the other contracting country, he/she is subject to the legislation of the contracting country in which he/she ordinarily resides. This five-year limit can be extended to eight years with the proper consent between agencies of both countries.
④ A detached worker is exempt from coverage under the legislation of the contracting country which he/she is sent to for less than five years if he/she is covered under the legislation of his/her home country. This five-year limit can be extended to eight years with the proper consent of agencies of both countries.
Benefits under this Agreement
Even though your periods of coverage in one country are not sufficient to qualify for pension benefits, you may be eligible for benefits after this agreement has entered into force. This is possible due to the total coverage in both countries.
Korean National Pension Benefits under the SSA
If you are insured for 12 months or more in Korea but do not have enough periods of coverage (e.g. 20 years for full old-age pension) to qualify for pension benefits under the Korean pension system, you may be able to qualify for Korean benefits by totaling periods of coverage under the Korean pension system and the Germany pension system. However, those periods creditable under the Germany pension system must not coincide with the periods in Korea. Your benefit is calculated by dividing the Korean periods of coverage by the total periods of coverage and then multiplying by the Theoretical Benefit. The Theoretical Benefit is calculated based on the totaled periods in both countries.
Germany Pension Benefits under the SSA
If you have more than 12 months’ worth of insured periods in Germany’s Old Age Security System (OAS) but do not have enough periods of coverage (e.g., 10 years for the old-age pension) to qualify for pension benefits under Germany’s Old Age Security System (OAS), you may be able to qualify for the Old Age Security pension by totaling periods of coverage under the Korean pension system and the Germany Old Age Security System (OAS). However, those periods creditable under the Korean pension scheme must not coincide with the periods of residence under Germany’s Old Age Security System (OAS).
If you do not have enough periods of coverage to qualify for Germany’s pension benefits under Germany’s Pension Plan (CPP), you may be able to qualify for German pension benefits by totaling periods of coverage under the Korean pension system and the Germany Pension Plan (CPP). However, those periods creditable under the Korean pension scheme must not coincide with the periods under the CPP
A person who is or has been subject to the laws of one contracting country and who resides within the territory of the other contracting country shall, together with his dependents, receive equal treatment with the nationals of the other contracting country in the application of the laws of the other contracting country.
A Korean lump-sum refund is paid to Germany nationals.
However, since there is no provision for a lump-sum refund in the legislation of the Germany Pension System, Korean people cannot be paid a lump-sum refund from the German pension system. Instead, the contributions to the German pension system may be calculated toward pension payments according to the legislation of the German pension system.