Korea plans to ease pension cuts for working older people and retired couples

Home > National > Social Affairs

Korea plans to ease pension cuts for working older people and retired couples

Published: 19 Aug. 2025, 15:27 Updated: 19 Aug. 2025, 15:34

Audio report: written by reporters, read by AI

People wait for consultations at the Seoul northern regional headquarters of the National Pension Service in Seodaemun District, western Seoul, on March 20. [NEWS1]

The government plans to ease pension rules that reduce monthly benefits for older people who continue earning income after retirement, with changes expected to begin next year.

The policy that cuts basic pension benefits for married couples by 20 percent will also be scaled back in phases.

The reforms are part of the government's broader plan to address what it described as “unreasonable" features of the national and basic pension systems, according to officials on Tuesday.

Currently, retirees who receive the national pension lose up to 50 percent of their monthly benefit if their earnings exceed a threshold set by the National Pension Service (NPS).

The threshold is based on the average monthly income of all pension subscribers over the previous three years.

For 2025, that figure is set at 3.09 million won ($2,225). In effect, pensioners who earn more than 3.09 million won per month see their payments reduced for up to five years.

Older people wait in line to receive meals at a soup kitchen in Tapgol Park in Jongno District, central Seoul, on May 12. [NEWS1]

NPS data shows that the number of beneficiaries subject to reductions due to reemployment or other postretirement work rose from about 89,000 in 2019 to nearly 137,000 last year, a 52 percent increase.

The total amount of pension payments reduced also climbed, from 216.8 billion won in 2023 to 242.9 billion won in 2024.

The reduction depends on how much a retiree’s earnings exceed the average monthly income of all pension subscribers over the previous three years.

There are five income brackets, and the government intends to abolish the first two, which cover excess monthly earnings of less than 1 million won and 1 million to 2 million won.

This means that starting next year, only retirees who earn at least 5.09 million won per month will face cuts to their benefits.

A citizen consults with a worker at the National Pension Service's Seoul northern regional headquarters in Seodaemun District, western Seoul, on March 18. [NEWS1]

The government plans to announce details of the reform this month and pursue legislative changes by the end of the year. Partial abolition of the cuts would take effect in the second half of 2026, with a review of the impact scheduled for the following year.

Authorities said they would also examine whether to abolish the rule entirely, taking into account similar systems that apply to public servants, soldiers and private schoolteachers.

The government estimates that removing the first two brackets will cost 535.6 billion won over the next five years.

Officials also plan to reform the so-called couple reduction in the basic pension program. Currently, when both spouses qualify for the benefit, each receives 20 percent less.

Beginning in 2027, the government intends to gradually reduce the size of this cut for the lowest 40 percent income bracket, lowering it to 15 percent that year and 10 percent in 2030.

The reform is expected to be legislated next year, with implementation beginning in January 2027 after debate in the National Assembly’s special committee on pension reform.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NAM SOO-HYOUN [[email protected]]