After a long time in Australia, Korea’s National Pension (Gukmin Yeongeum) tends to fade from your mind.
You left Korea a long time ago, you pay tax in Australia, your Australian super keeps building, and you spend your living costs in Australian dollars.
But as retirement gets closer, the question comes back.
“What happens to my National Pension?”
The National Pension is not only a problem for people living in Korea. Even if you live in Australia, and even if you have no plan to move back to Korea, a contribution history can become one line in your retirement cash flow.
What matters is not only “can I receive it?”
It is how much, when, in which currency, into which account, and how you view it combined with your Australian super.
The bottom line
- Overseas residents can review the possibility of receiving the National Pension if they meet the requirements.
- The key factors are contribution period, pension eligibility age, nationality and residency status, account, and the reporting procedure.
- Australian super and Korea’s National Pension are different schemes, but for retirement living costs you should look at them together.
- Depending on the exchange rate, the real Australian-dollar value of the National Pension changes.
- If you are weighing up reverse migration, treat your pension not as “a line of income” but as a retirement cash-flow statement.
Key terms first
| Term | Meaning |
|---|---|
| National Pension (Gukmin Yeongeum) | Korea’s public pension scheme |
| Contribution period | The period over which National Pension contributions are paid or credited |
| Pension eligibility age | The age at which you can receive the pension |
| Old-age pension | The main National Pension benefit, paid once certain requirements are met |
| Lump-sum refund | A benefit paid as a lump sum instead of a pension under certain conditions |
| Australian super | Superannuation. Australia’s retirement scheme |
The most important distinction here is between the National Pension and Australian super.
The National Pension is Korea’s public pension. Australian super has a strong character of a retirement account that builds up in your own name. The two differ in scheme, in tax, and in how they are paid out.
But for retirement living costs, both come down to the same question.
How much comes in each month?
Why you should still look at the National Pension while living overseas
Anyone who held a job or ran a business in Korea may have a National Pension history.
Even if you forgot about it when you migrated to Australia, the record may still be there.
The problem is that many in the Korean community check this money far too late.
It is only just before retirement that they think, “Should I ask the National Pension Service?” But retirement planning should happen much earlier than that.
Even if the projected National Pension amount looks small, a monthly cash flow has real meaning.
That is especially true when you look at it together with your Australian super, Korean assets, Australian property, Korean real estate and the exchange rate.
The National Pension is won-denominated income
If you receive the National Pension while living in Australia, the starting point of that money is Korean won.
You may receive it in won into a Korean account, or convert it to Australian dollars through an overseas transfer. The method depends on your personal situation and the scheme, so check it.
What matters is the exchange rate.
Suppose you have a National Pension of ₩1,000,000 a month.
| Exchange rate | Converted to AUD |
|---|---|
| A$1 = ₩850 | about A$1,176 |
| A$1 = ₩900 | about A$1,111 |
| A$1 = ₩1,000 | A$1,000 |
The same ₩1,000,000 has a different value as Australian-dollar living costs.
So for overseas residents, the National Pension should not be viewed by the won amount alone.
You have to see what role it plays within your Australian-dollar living costs.
You should look at it together with Australian super
If you worked in Australia, super builds up.
Super is an important asset in retirement. But super’s outcome varies with investment returns, the timing of withdrawal, tax and account structure.
The National Pension is different. If you meet the requirements, it becomes regular cash flow.
So in retirement planning, you can break it down like this.
- National Pension: won-based regular cash flow
- Australian super: Australian-dollar-based retirement asset
- Korean assets: real estate, deposits, shares, possible family support
- Australian assets: home, investment accounts, cash
Looked at separately, these four seem scattered; looked at together, they become a retirement cash-flow statement.
It matters even more if you are weighing up reverse migration
If you are thinking about moving back to Korea, the National Pension becomes more important.
That is because the National Pension can cover part of your Korean living costs.
But reverse migration is not simply a question of where you will live.
What will you do with your Australian super?
Will you sell your Australian home?
What happens to your Korean health insurance?
From when will you start drawing your Korean National Pension?
How will your residency status under Australian tax law change?
These questions move together.
Looked at on its own, the National Pension can seem small. But put it next to Korean health insurance, housing costs, Australian super and the exchange rate, and it becomes part of the big picture.
Read next
- What happens to your Australian super when you leave
- Moving back to Korea — super, property, tax
- The Korea–Australia tax treaty and double taxation
- Sending money from Australia to Korea
- The Korea–Australia money map
Disclaimer
This article is general information. National Pension entitlement, overseas payment, tax, and the withdrawal and taxation of Australian super can vary depending on your own contribution record, nationality, residency status, age and account structure. Before making any actual decision, please check the latest guidance from the National Pension Service (NPS), Services Australia and a tax professional.