China-South Korea Sign Social Insurance Contribution Agreement and Protocal

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Feb. 18 – China and South Korea signed the “Social Insurance Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea (hereinafter referred to as ‘Agreement’)” as well as the “Social Insurance Protocol between the Government of the People’s Republic of China and the Government of the Republic of Korea (hereinafter referred to as ‘Protocol’)” on October 29, 2012, aiming to solve the issues concerning double contributions of social insurance between the two countries.

For the purpose of better implementing the Agreement and the Protocol, China’s Ministry of Human Resources and Social Security released the “Circular on Implementing the Sino-Korean Social Insurance Agreement and Protocol (renshetingfa [2012] No.120, hereinafter referred to as ‘Circular’)” on December 28, 2012. The key points of the Circular can be found below.

Main contents of the Agreement

Scope of mutually exempted social insurance

In China:

  • Basic pension insurance for urban employees
  • New rural social pension insurance
  • Social pension insurance and unemployment insurance for urban residents

In Korea:

  • National annuity
  • Annuity for government officials
  • Annuity and employment insurance for private school faculty

Chinese nationals eligible for exemption from paying social insurance in Korea

  • Dispatched persons: This refers to employees of a Chinese company that have participated in the social insurance schemes in China and are dispatched to a company or an organization established in Korea by the same Chinese company.
  • Short-term employees: This refers to employees who are employed for less than five years by an employer having a place of business in South Korea, and who have participated in China’s social insurance scheme.
  • Self-employed persons and investors
  • Persons who are employed as crew members on ships or aircraft
  • Persons employed by diplomatic and consular organs: This refers to Chinese nationals who are employed by China’s diplomatic organs in South Korea or by the staff thereof.
  • Employees in governmental or public authorities: This refers to persons employed by China’s central government, local governments or other public organs who have been dispatched to South Korea.

Korean nationals eligible for exemption from paying social insurance in China

Persons who meet criteria similar to Chinese nationals listed above

Exemption period

  • Exemption can be automatically granted upon first application, but certifications by relevant agencies are still required.
  • The maximum exemption period for dispatched individuals is 60 calendar months upon first application; 120 calendar months of exemption period may be granted under some circumstances, such as work needs, but this is subject to approval.
  • The maximum exemption period for the short-term employees is 60 calendar months.

Main contents of the Protocol

Scope of provisionally exempted Chinese insurance applicable to Korean nationals

  • Basic medical insurance for employees

Korean nationals eligible for exemption from paying the basic medical insurance in China

Dispatched persons, short-term employees, self-employed persons and investors,
as well as employees in governmental or public authorities as stipulated in the Agreement.

Korean nationals are provisionally exempted from paying basic medical insurance in China if:

  • They have commenced their work in China prior to the enforcement of the Agreement
  • They have participated in China’s social insurance schemes according China’s Social Security Law
  • They have purchased commercial health insurance

Exemption period

The exemption period shall be counted from the enforcement date of the Agreement and the maximum exemption period shall not exceed December 31, 2014.

Where the commercial health insurance purchased by South Korean nationals expires before December 31, 2014, they should contribute basic medical insurance from the expiration date of such insurance.

Starting from January 1, 2015, all South Korean nationals working in China must participate in the basic medical insurance scheme.

Participation of Chinese nationals in South Korea’s national health insurance

The Protocol shall not affect Chinese nationals working in South Korea and participating in Korea’s national health insurance.

Relationship between the Agreement and Protocol

The Protocol forms an integral part of the Agreement and serves as a provisional measure for the exemption of South Korean nationals working in China with regards to the basic medical insurance scheme.

The Agreement and the Protocol came into force from January 16, 2013.

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