Seoul, South Korea – In a significant development for South Korean workers abroad, the Korea-Philippines Social Security Agreement will come into effect on April 1, 2024, offering them an exemption from local pension insurance premiums for up to eight years while working in the Philippines. This landmark agreement marks a new chapter in the labor and social security cooperation between South Korea and the Philippines, aimed at reducing the financial burden on expatriate workers and enhancing their pension rights.
The agreement, a result of bilateral negotiations, is designed to alleviate the dual financial burden on workers contributing to the social security systems of both countries. Under this agreement, South Korean workers dispatched to the Philippines can now look forward to a relief from the double payment of pension insurance premiums. This policy not only reduces their financial strain but also opens up avenues for them to secure pension benefits from both nations.
One of the major highlights of this agreement is the exemption of pension insurance premiums for South Korean nationals working in the Philippines. Initially set for a five-year period, this exemption can be extended for an additional three years upon mutual agreement between the two countries. Moreover, for South Korean citizens whose combined pension periods in both countries fall short of the minimum requirement to qualify for pension benefits, this agreement allows the aggregation of their contribution periods in both nations. This provision is expected to significantly bolster the pension rights of South Koreans abroad.
Before this agreement, South Korean workers unable to meet the ten-year minimum pension contribution requirement in either country faced the possibility of not qualifying for pension benefits. Now, the aggregation of pension periods—five years in South Korea and five in the Philippines, for instance—will satisfy the minimum requirement, ensuring eligibility for pension benefits from both countries. The pension amount will be proportionately calculated based on the contribution periods in each country, providing a fair benefit scheme for expatriates.
Filipino workers stand to gain from this agreement as well. Those contributing to the South Korean National Pension while working in South Korea will see an expansion in their pension benefits. Additionally, the agreement formalizes the provision for a lump-sum return, expected to positively impact the influx of foreign workers to South Korea.
With the enactment of the Korea-Philippines Social Security Agreement, South Korea now implements 40 social security agreements worldwide. The South Korean government is actively pursuing similar agreements with other countries to lessen the burden of foreign pension insurance premium payments on its citizens and improve their pension rights globally.
This agreement not only exemplifies the strengthening labor relations between South Korea and the Philippines but also sets a precedent for future international cooperation in social security. By providing significant financial relief and securing pension benefits for workers, both countries affirm their commitment to the welfare of their citizens working abroad, paving the way for a more secure and prosperous future for all involved.
