Yoon Administration Overhauls Housing Pension System... Expands Eligibility and Monthly Payments (Update)

Transition Team Announces Measures to Revitalize Housing Pension
Subscription Criteria Public Price Raised from 900 Million to 1.2 Billion Won... Preferred Type Market Price Increased from 150 Million to 200 Million Won
Total Loan Limit Raised to Increase Monthly Payments

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] The Presidential Transition Committee (PTC) announced on the 21st that it will promote measures to revitalize the Housing Pension by expanding the eligibility for subscription and increasing the monthly payment amount.

Shin Seonghwan, a member of the PTC's Economic Subcommittee 1, held a press conference at the PTC office in Tongui-dong, Jongno-gu, Seoul, and explained, "We are actively considering measures to revitalize the current Housing Pension by expanding the eligibility and improving the system without additional budget input."

The Housing Pension is a product that allows elderly households aged 55 or older (one spouse) who reside in their own home to receive a fixed monthly pension through a guarantee from the Korea Housing Finance Corporation using their home as collateral.

Considering its public nature, the Housing Pension restricts eligibility based on housing price criteria, but it has been criticized for failing to meet increased demand as it did not reflect past housing prices and inflation rates.

Accordingly, the PTC plans to expand the eligible housing for the "General Housing Pension," which allows one spouse aged 55 or older to subscribe, from a publicly announced price of 900 million KRW or less to up to 1.2 billion KRW. This requires an amendment to the Korea Housing Finance Corporation Act, and the Yoon Seok-yeol administration plans to prepare and promote the amendment as soon as possible.

For the "Preferential Housing Pension," which offers up to a 20% higher pension amount to elderly households receiving the basic pension, the eligibility will be expanded from houses with a current market price under 150 million KRW to those under 200 million KRW. This improvement can be made through internal regulation amendments.

In conjunction with this, the total pension loan limit will also be raised from the current 500 million KRW. Currently, the Korea Housing Finance Corporation limits the total pension loan amount (the total sum of pensions to be received until age 100) to 500 million KRW to maintain the soundness of the Housing Pension and calculates the pension amount accordingly. However, as the housing price eligibility expands, the total receipt limit will also be increased. This is expected to increase the actual pension amount received. Currently, the monthly payment ranges from a minimum of 160,000 KRW to a maximum of 4.98 million KRW depending on the housing price.

Additionally, a new standard and procedure will be established to refund the initial guarantee fee, which is about 1.5% of the housing price, paid when subscribing to the Housing Pension. Currently, except for exceptional cases such as death or disaster, refunds are generally not provided, which has been pointed out as a factor causing hesitation in subscription. Therefore, refund regulations will be created so that the initial guarantee fee can be refunded within three years of subscription based on reasonable criteria.

The PTC also requested the Financial Services Commission and the Korea Housing Finance Corporation to prepare mid- to long-term risk management plans for the Housing Pension to ensure stable and sustainable fund operation.

This content was produced with the assistance of AI translation services.