Interim Payment of Retiring Allowance
Definition
- The 'interim payment of retiring allowance' is defined by paying a retiring allowance in advance, upon request by employees due to a valid ground for interm payment, in an amout calculated based on the continuous service period (the former part of Article 8(2) of the Act on the Guarantee of Workers’ Retirement Benefits).
※ Useful Tip before Applying for the Interim Payment of Retiring Allowance
Although an employee is entitled to a request for interim payment of retiring allowance on a valid ground therefor, it is recommended to make sure whether the employer will accept such request beforehand.
Valid grounds for the interim payment of retiring allowance
- Upon request by an employee due to any of the following grounds, the employer may pay his/her retiring allowance in advance prior to the retirement, in an amount calculated based on his/her continuous service period (the former part of Article 8(2) of the Act on the Guarantee of Employees’ Retirement Benefits; Article 3(1) of the Enforcement Decree thereof; and ‘Notice on the Use of a Retirement Pension Plan as Collateral, Acceptable Reasons and Required Conditions for the Interim Payment of Retirement Benefits, and the Maximum Value of Collateral, Etc.’).
· Where an employee, who is non-homeowner, purchases a house in his/her name.
Q1. How can I be recognized as a non-homeowner and to have purchased a house?
A1. If you meet the following criteria, you can be recognized as a non-homeowner and an actual home purchaser (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, August 28, 2022, p. 49).
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Category
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Description
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Qualification as a non-homeowner
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▪ A recipient of retirement benefits who does not own a house that is titled to him or her. It does not mean that the entire household members of the recipient shall not own a house. ▪ Eligibility is verified by checking whether the recipient of retirement benefits own a house shall be decided as of the application date of interim payment (interim withdrawal), and it does not mean that the recipient has never owned her/his house throughout his/her life.
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Determination on home purchase
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▪ It refers to the purchase of a house in his/her name, and therefore, a home purchased in the name of his/her spouse is considered ineligible. ※ A home purchase jointly with a spouse is considered eligible.
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Q2. In the case where I recently sold the house that I previously owned in my name, can I be recognized as a non-homeowner?
A2-1. Even if you owned a house before application for interim payment (interim withdrawal), you can apply for interim payment (interim withdrawal) as long as you do not currently have any house owned in your name as of the date of application for interim payment (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 50).
A2-2. In the event that the date of selling your house and the date of purchasing the house are the same, you are not allowed to make an interim payment (interim withdrawal) since it is considered that you own a different type of house as of the date (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 50).
· Where an employee, who is a non-homeowner, pays a tenancy deposit pursuant to Article 303 of the Civll Act or a security deposit pursuant to Article 3-2 of the Housing Lease Protection Act, for the residential purpose (the number of such occurrences is limited to one time while the employee works in the same business).
Q1. Does the tenancy deposit or the security depost involve the deposit for a monthly rent?
A1. Both jeonse deposits and security deposits on monthly rental homes are included in the scope of deposits referenced as “jeonse deposits on a home rented as a primary residence” under Article 303 of the Civil Act or as the “security deposit” under Article 3-2 of the Housing Lease Protection Act (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 52).
Q2. Can I apply for an interim payment of benefits when renewing an existing jeonse lease?
A2. Interim payment may be applied for in the event that a new contract for increasing a jeonse or security deposit at the same location is executed, but in the case of extending the contract period without an increase, interim payment may not be applied (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 53).
Q3. Am I still eligible for an interim payment of benefits if my spouse or some other member of my household is named as the tenant on the contract?
A3. Interim payment (interim withdrawal) under the burden of the jeonse or security deposit may be applied for in the case where a homeless person enters into a contract in his/her own name or in the name of a household member who has been proved to be in the same household with the applicant through a resident registration certificate, etc. (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 53).
However, if the home is jointly leased with a spouse, direct family member or a sibling who is the tenant on the contract, you can submit the evidence of residence in that home, for example, by reporting the address change to your local administrative office, after moving into the home. This is considered sufficient to establish the fact that you entered into a lease agreement on a property as a primary residence (Ministry of Employment and Labor, ‘Administrative Guidelines on the Interim Payment of Retirement Benefits,’ p5).
· Where an employee pays medical costs incurred for convalescence from illness or injury of any of the following persons, in which the convalescence period is more than six (6) months and the costs exceed 125/1000 of the total amount of wages per year:
√ Employee
√ Spouse of the employee
√ A dependent of the employee or his or her spouse
Q1. Who qualifies as dependents?
A1. ① Parents aged 60 years or older,② children up to the age of 20 years including adopted children who live with you, ③ siblings aged 20 years or younger, or aged 60 or older, ④ recipients of basic livelihood allowances under the National Basic Living Security Act, and ⑤ children who are raised by a foster family under the Child Welfare Act qualify as dependents. In this case, income levels are not considered in determining the scope of dependents set forth in Article 50(1) of the Income Tax Act (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 54).
Q2. What is a “dependent sharing livelihood?
A2. It refers to a person who is registered as a family member in the resident registration card and shares livelihood as the co-resident at his/her address or house (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 54).
Q3. Does the period of convalescence or rehabilitation care include only the period of hospitalization?
A3. Convalescence or rehabilitation care means all necessary medical care a patient needs to reach a full recovery following an illness or injury. Therefore, the period during which outpatient care or home care is received is also considered as part of the period of convalescence or rehabilitation care, and not just the period of inpatient care at a hospital (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 57).
Q4. When is the basis for calculating 125/1,000 of the annual amount of salary?
A4. The annual amount of salary of the person who applied for interim payment (interim withdrawal) shall be calculated based on the total amount of salary of the preceding year.
· Where an employee was declared bankrupt pursuant to the Debtor Rehabilitation and Bankruptcy Act, within the five most recent years counting backward from the date of application for the interim settlement of retirement pay.
· When an employee was ordered to start personal bankruptcy rehabilitation proceedings pursuant to the Debtor Rehabilitation and Bankruptcy Act, within the five most recent years counting backward from the date of application for the interim payment of retirement pay.
Q1. Does a decision by the Credit Counseling and Recovery Service that I undergo debtor rehabilitation proceedings also qualify as a valid reason for applying for an interim payment?
A1. The debtor rehabilitation proceedings in this context refer only to the court-ordered proceedings pursuant to the Debtor Rehabilitation and Bankruptcy Act. Therefore, any decisions for a personal workout or pre-workout (pre-bankruptcy debt relief) by the Credit Counseling and Recovery Service, under its debtor rehabilitation program are not considered valid reasons for the interim payment of retirement benefits (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 59).
· Where an employer implements a program to reduce the wages of employees based on a particular age, the length of continuous employment or the amount of wage through a collective agreement, employment rules, etc. on the condition of extending or guaranteeing the current retirement age.
· Where the employer reduced an employee's contractual working hours by at least one (1) hour a day orfive (5) hours a week under the agreement with the employee, and the employee agreedto work for at least three (3) months based on the reduced contractual working hours.
· Where the contractual working hours at maximum is shorthened from sixty (60) hours to fifty-two (52) hours pursuant to the revision of the Labor Standards Act so that the amount of retiring allowance is likely to be reduced.
· In the case of a disaster under each subparagraph of Article 66 (1) of the 「Framework Act on Disaster and Safety Management」, and falls under any of the following:
√ Damage caused by loss, propagation, or half-breakdown of residential facilities in the disaster-affected area [In this case, residential facilities are dependents that share livelihoods with subscribers, spouses, and workers (including spouses) pursuant to Article 50 (1) 3 of the 「Income Tax Act」Limited to facilities where families reside]
√ In the case of a subscriber's spouse or dependents who make a living with the subscriber (including spouse) pursuant to Article 50 (1) 3 of the 「Income Tax Act」 are missing due to a disaster
√ When a subscriber suffers damage that requires more than 15 days of inpatient treatment due to a disaster
Application period and attached documents
- For the purchase of a first home (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 50)).
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Category
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Description
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Application period
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An application may be filed as early as on the day of the signing of the home purchase agreement and must be filed no later than a month after the transfer of the title.
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Attached documents
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▪ Evidence establishing the status as a first-time home buyer √ Full tranx-script of resident registration in the town/ neighborhood of current residence. √ Full transcript of the property record or the building management ledger of the current residence. √ Certificate of property tax (non-) assessment (the document issued by a local government)
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▪ Proof of the purchase of a home: √ In the case of new house construction, a construction plan and a construction contract, a construction permit or a certificate of reporting construction commencement √ In the case of successful bidding: a statement of decision permitting the bidding (sale price) (which includes marking on the real estate), and a price payment notice √ In the case of purchasing a house: a real estate sale contract [a parceling-out contract] (including the detailed address of an apartment) ※ In the case of application after registration: For a house applied for and purchased within one month from the registration of the ownership transfer, a building register or a building management register shall be used for confirmation of a house purchase.
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- For the rental of a primary residence for personal occupancy, requiring a jeonse or security deposit (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 53).
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Category
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Description
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Application period
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From the date of the signing of the home rental agreement to one month after the payment of the balance of the jeonse deposit remaining after the initial deposit.
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Attached documents
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▪ Evidence establishing the existence of no other owned or rented residential property: √ Certified copy of resident registration in the town/ neighborhood of current residence. √ Certified copy of register of the current residence building or certified copy of building management ledger √ Certificate of property tax (non-) assessment (the document is issued by a local government)
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▪ Evidence of the requirement of a jeonse or security deposit: √ A copy of the jeonse or lease agreement. √ In the case of application after paying the remaining amount: The application shall be filed after the remaining amount is paid, and a receipt of jeonse or security deposit payment shall be submitted.
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- When the employee or his/her spouse or a dependent requires convalescence or rehabilitation care for a period of six months or longer (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 56).
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Category
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Description
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Application period
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▪ The application can be filed either while the care is received following an illness or injury or after the care is terminated. ▪ Provided that, the application may be filed when the sum of the medical expenses spent and the medical expenses confirmed exceeds 125/1000 of the annual wage, and if the patient no longer receives the care, the application may be filed no later than a month from the last day of care.
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Attached documents
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▪ Documents required for confirming the necessity of care: √A medical certificate, statement by the treating physician or the Certificate of Long-term Convalescence and Rehabilitation Care issued by the National Health Insurance Corporation that specifies the name of the illness, injury or condition and indicates the need for convalescence or rehabilitation care for at least six months. √ If the application is filed after the termination of care: The document confirming the last day of care and medical expenses (application shall be filed within one month from the last day of care)
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▪ Documents required to confirm the dependents: A certificate of family relationship or a certified copy of resident registration, confirming that a family remember is a dependent living in the employee’s household.
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▪ Documents required to confirm themedical expenses spent √ Documents confirmingmedical expenses, such as a receipt from a medical institution, medicalbills, confirmation of medical bill payment, and a detailed statement ofmedical expenses. √ Evidence of medical expenses shallcontain information that can identify a patient and a disease number.
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▪ Documents required to confirm theannual wage √ An enrollee’s withholding receipt, total amount of allowances for industrialaccident compensation and employment insurance, a payslip, or any otherdocuments that can confirm the enrollee’s wage ※ With respect toretirement pension, wage materials (gross wages calculated backwards by usingthe employer’s wage notification and contributions)held by a retirement pension business entity may be used for confirmation.
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- When an enrollee was declared bankrupt by a court of law, pursuant to the Debtor Rehabilitation and Bankruptcy Act, within the five most recent years, counting from the date of application for interim payment (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 58).
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Category
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Description
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Application period
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Within 5 years from the date when the bankruptcy was declared ※ Regardless of whether discharge or rehabilitation has been decided
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Documents required
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Text of bankruptcy ruling by the court.
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- When an enrollee was ordered to start personal debtor rehabilitation proceedings, pursuant to the Debtor Rehabilitation and Bankruptcy Act, within the five most recent years, counting from the date of application for interim payment (Ministry of Employment and Labor, 『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 58).
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Category
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Description
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Application period
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Within 5 years from the day when an individual rehabilitation procedure was initiated; Provided, however, that a decision on the commencement of an individual rehabilitation procedure shall remain in effect at the time of application). ※ If a decision to end the rehabilitation proceedings or a decision of discharge was issued, an application for interim payment (interim withdrawal) can no longer be filed on account of rehabilitation proceedings, as this effectively voids the earlier decision by the court.
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Attached documents
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The text of the court decision to initiate personal debtor rehabilitation proceedings or the affidavit of the approval of the personal debtor rehabilitation debt repayment plan.
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- When an employer implements a program to reduce the wages of employees starting at a certain age or a certain point in time during the period of employment in exchange for extending the retirement age or guaranteeing continuous employment until the retirement age, based on a collective agreement or the internal rules of employment (Ministry of Employment and Labor,『Retirement Benefits System Manual (Guideline for Interim Payment)』, p. 60)
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Category
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Description
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Application period
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In principle, on the day when the wage peak program enters into effect if the employee whose wage is affected by the program. ※ However, in the case where the employer and employees agreed on separate dates of application for interim payment, the application may be filed after the date of the entry into effect of the wage peak program, on these agreed-upon dates.
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Documents confirmed by the employer
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▪ Documents indicating that a wage peak program is in place, such as the rules of employment or the collective agreement. ▪ Documents proving that the applicant is affected by the wage peak program, such as a copy of the employment contract (wage agreement) or paystubs. ※ The above document may be confirmed by the documents placed in a place of business (Since the documents owned by the employer themselves can determine whether the wage peak program was implemented, no separate attached documents, other than an application for interim payment, are required to be provided from an employee)
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