Exemption System for National Pension Plan Premiums

An exemption system is in place for the National Pension Plan, designed for people having difficulties paying the premiums. There are four types of exemptions available: 25%, 50%, 75% and full.
Other systems are available for students and people aged 49 and under if their own or their spouse’s income, or in the case of a student their own income in the previous year from the year of the application is lower than the criteria. The exemption period will not reflect the amount of pension benefits. An applicant may apply for an exemption up to 25 months retroactively.

Income criteria

If the income of each person, her/his spouse or the head of her/his household in the previous year from the year of the application is lower than the designated amount, that person is deemed eligible for the exemption system. The criterion varies by the number of household members. The exemption system includes special cases such as unemployment, disasters and other reasons.

Eligibility period

The period of the exemption is included in the eligibility period to receive the Basic Pension for the Elderly, the Basic Disability Pension, and the Basic Survivors’ Pension.

Calculation of the annuity of the Basic Pension for the Elderly

Compared to cases in which the premiums are fully paid, in cases when payment exemptions apply, the amount of the pension benefits will be calculated with the below stated ratio in the chart, compared to those who paid premiums fully.

Types of exemptions	Calculation ratio for the exemptions admitted after April 2009	Calculation ratio for the exemptions admitted before March 2009
Full	1/2	1/3
75%	5/8	1/2
50%	3/4	2/3
25%	7/8	5/6

Note

If a person does not pay her/his premiums for the partially exempted period, this period will be excluded in the calculation of his/her pension benefits.

Deferred premium payments

Premiums unpaid due to the exemption system can be paid in arrears within 10 years after the exemption period.