Basic Pension Even with Overseas Assets and Crypto? Government to Block Loophole Payments

Basic Pension Even with Overseas Assets and Crypto? Government to Block Loophole Payments

Government to include overseas financial assets and virtual assets in income assessment for basic pension

Accelerating basic pension system improvements, including introducing a 5-year domestic residency requirement

The government is moving to reform the basic pension system by thoroughly scrutinizing assets hidden overseas or virtual assets when selecting beneficiaries.

This is because there have been continuous criticisms that high-net-worth individuals have been receiving basic pensions by exploiting loopholes in the asset calculation system.

The Ministry of Health and Welfare announced on the 15th that it plans to reform the income assessment method and strengthen domestic residency requirements to enhance the fairness of the basic pension.

The biggest change is the inclusion of overseas financial assets and virtual assets in the income assessment.

Until now, investigations have mainly focused on domestic assets, making it difficult to accurately identify cases where individuals hold large sums of deposits overseas or invest in virtual assets such as Bitcoin.

The government is promoting an amendment to the Basic Pension Act, which includes imposing a reporting obligation for overseas income and assets and strengthening the linkage of tax information. The bill was introduced in 2025 and is currently being discussed in a standing committee of the National Assembly.

In addition, improvements to the basic asset deduction system, such as for housing and land, are also under consideration.

This is based on the judgment that the current level of deductions does not adequately reflect the recent sharp increase in housing costs. The government plans to establish criteria that more realistically reflect asset situations to ensure that the basic pension goes to the elderly who truly need it.

The introduction of a domestic residency period requirement for basic pension eligibility is also being actively discussed. Currently, seniors aged 65 or older who fall within the bottom 70% of income can receive the pension, but how long they have lived in Korea was not considered. This has raised issues of fairness between citizens who pay taxes and contribute to society in Korea, and dual nationals who return after long stays abroad.

Prior to this, in September 2024, the government proposed a pension reform plan to provide basic pensions only to those who have resided in Korea for at least 5 years after the age of 19. This aims to use socio-economic ties with the country as a criterion for eligibility, considering the nature of the system, which is funded by citizens' taxes. In fact, most OECD countries, such as Australia and Canada (at least 10 years), Norway (5 years), and Sweden (3 years), already implement strict residency requirements.

The basic pension system has played a significant role in alleviating poverty among the elderly since its introduction in July 2014.

The amount received by elderly beneficiaries of the basic pension has increased from 200,000 won per month to 349,700 won in 2026 (based on a single elderly household), establishing it as a core pillar of old-age income security.

However, with the rapid aging of the population leading to increasing financial burdens, there are growing calls to consider the sustainability of the system. Experts advise that careful planning is needed when introducing residency requirements to avoid creating blind spots for elderly poverty.

Moon Hyun-kyung, an associate research fellow at the National Pension Research Institute, suggested that it would be desirable to start with a short residency period of less than 5 years and gradually discuss differentiating payment amounts based on the residency period in the long term.