More than a decade after Korea introduced the basic pension system, the actual enrollment rate among eligible senior citizens has barely budged, despite a tripling of the program's budget. Experts point to the "application-based" principle — which requires seniors to apply in person rather than receive benefits automatically — as a key barrier limiting coverage.
According to a report titled "Restructuring the Public Old-Age Income Security System and Improving the Application-Based Principle: Focusing on the Basic Pension," published by the Korea Institute for Health and Social Affairs (KIHASA) on Tuesday, the basic pension budget reached 22.55 trillion won ($16.3 billion) in 2023, a 255% increase from 6.9 trillion won ($5 billion) in 2014, the program's first year.
Yet the enrollment rate — the share of adults aged 65 and older actually receiving the basic pension — stood at 67.0% in 2023, falling short of the government's 70% target. The figure represents a mere 0.2 percentage point increase from the 66.8% recorded when the system was first introduced.
KIHASA identified the application-based principle as the primary cause of the stagnant enrollment rate. Under this system, the government does not automatically disburse pensions. Instead, eligible individuals must file applications themselves.
The Basic Pension Act designates the act of applying in person as a mandatory procedural requirement. Researchers said this process is overly complex and burdensome for elderly citizens.
"The method for calculating the recognized income amount, which determines pension eligibility, combines earned income and assets while applying various deductions — a structure that is difficult to understand intuitively," the institute said. "The complexity of the system, combined with the application-based principle, is creating administrative inefficiency."
The report also found cases in which eligible seniors deliberately chose not to apply. Recipients of livelihood benefits may see those payments reduced by the amount of the basic pension they receive, making it potentially disadvantageous for them to apply.
KIHASA said that simply reducing the volume of application paperwork would not be sufficient, and that the process must be accompanied by simplification of eligibility criteria and benefit calculation methods. The institute recommended fundamental restructuring, such as linking the basic pension eligibility determination to the National Pension Service claims process so that both can be resolved simultaneously.
"To raise the basic pension enrollment rate, application procedures should be formally simplified and data-sharing among government agencies should be strengthened so that the state proactively identifies eligible individuals," the institute said. "Only by simplifying the system's structure and improving administrative processing can senior citizens fully exercise their rightful entitlements."