Calculation of farmland pension receipt, conditions for joining? (Advantages and disadvantages)
The Farmland Pension is a pension product similar to the National Pension for farmers. This is a system implemented by the Korea Rural Community Corporation as a means of preparing for old age for farmers. If you sign up for a farmland pension, you can receive a certain amount later by calculating it. However, farmland pension can be received only when certain qualifications are met. 농지연금 수령액 계산
farmland pension 좋은뉴스
1. What is Farmland Pension?
The Farmland Pension is a system in which farmland owned by an elderly farmer is used as collateral for those aged 60 or older* to receive stable funds for their retirement as a monthly pension.
(Originally, it was 65 years old or older, but in September 2021, it was decided to lower the subscription age to 60 years old. It is expected to be applied from 2022.)
Unexpectedly, the participation rate of farmers in the national pension is 35.6%, which is less than 70% of the entire nation. Farmland Pension is the government’s policy for this because farmers’ retirement lives are unstable due to non-enrollment in the National Pension.
It is a loan product in which farmland owned by farmers is secured by the Korea Rural Community Corporation as collateral and a fixed amount is received in the form of an annuity each month.
2. Conditions for Joining Farmland Pension
The conditions for subscribing to farmland pension are that the farmland owner must be at least 65 years of age as of the end of the year of application. This age is based on the date of birth on the resident registration.
You must also have farming experience.
Farming experience: more than 5 years
More than 5 years in the past as of the farmland pension application date
It does not have to be consecutive, and the sum of farming periods must be more than 5 years.
Also, the farmland you own must meet certain conditions.
Farmland for which no real rights such as mortgages have been established (However, farmland where the maximum amount of senior bonds is less than 15% of the land price as collateral is allowed)
Farmland that is not subject to foreclosure or provisional foreclosure
Farmland that meets all of the following
Under the Agricultural Land Act, farmland owned by the project target and actually used for farming is designated as a fence, field, orchard among farmland.
Farmland owned by the project target for more than 2 years (including the period of holding the inherited farmland by the heir)
The address (resident registration) of the subject of the project is located in the municipality where the collateral farmland is located and the adjacent si/gungu, or farmland located in an area within 30 km of the address and the collateral farmland in a straight line (No. 2 and 3 are farmland newly acquired after January 1, 2020) apply)
Farmland excluded from farmland pension
– Land with illegal buildings installed
– Farmland jointly owned by a person other than the principal or spouse
– Farmland, etc. in the area where the development plan has been finalized as the development area and development plan designation and implementation have been notified
– Farmland acquired through auctions and public auctions (including sales and purchases) after January 1, 2018
However, as of the farmland pension application date, the applicant’s holding period of collateralized farmland is more than 2 years, and ‘collateral is possible if the applicant resides within 30 km of the city/gun-gu where the collateral farmland is located and the city/gun-gu adjacent to it)
farmland pension
3. Types of Farmland Pension
There are two types of farmland pension: term type and life type.
Term type is to receive pension for a certain period of time, and there are 5 years, 10 years, and 15 years depending on age.
Life imprisonment is a method of receiving an annuity every month for a certain period of time until death.
Before and after type: Received more than the fixed-rate type during the first 10 years of subscription, and then less from 11 years
Temporary Withdrawal Type: A method of withdrawing the necessary amount from 30% of the total available amount at any time
Management transfer type: A type of receiving more pension on the premise of transferring ownership to the corporation at the end of the payment period
Fixed-term payment type: A method in which a subscriber receives a certain amount every month for a certain period of time selected by the subscriber
Payment method Life imprisonment, management transfer type Fixed-term fixed-term (5 years) Fixed-term fixed-term (10 years) Fixed-term fixed-term (15 years)
Membership age 65 years of age or older 78 years of age or older 73 years of age or older 68 years of age or older
4. How to apply for Farmland Pension
You can apply for farmland pension at the Farmland Bank Farmland Pension website (fbo.or.kr).
If you apply online, an employee of the Rural Community Corporation will contact you directly to apply for a farmland pension.
After that, documents are received, documents are prepared, and farmland price evaluation is selected based on publicly announced land price or appraisal price, and awaits review.
When the farmland pension review is completed, you will visit the local Rural Community Corporation to sign a contract.
5. How to calculate farmland pension receipts
As of 2018, the average monthly payment for farmland pension was KRW 982,000.
In addition to the farmland pension, it is now possible to obtain additional farmland pension + farming income if farmland is directly cultivated or leased.
The maximum amount of the farmland pension is 3 million won.
Farmland pension can be calculated by simulation on the Farmland Bank and Farmland Pension website.
Farmland Pension Receipt Calculation
I randomly set the date of birth and farmland price to 500 million won and entered it.
Farmland evaluation is 100% if the public price is used, and only 90% of the appraisal rate is applied if the appraised price is used.
Farmland Pension Receipt Calculation
Monthly payments are calculated for flat-rate, back-and-forth, and lump-sum withdrawal types. If you do it for a period of time, you can only receive up to the upper limit of 3 million won.
6. Advantages of Farmland Pension
The benefits of subscribing to the farmland pension are as follows:
It is paid for life to the married couple: If the farmer receiving the farmland pension dies, the spouse can succeed and receive the farmland pension until the death of the spouse. In this case, it is only applicable when the spouse is over 60 years of age at the time of application and selects pension succession.
Stability is secured through financial support. : As a product for farmers’ retirement plans, they are partially supported by the government budget and can receive a stable pension.
Property tax exemption: Farmland under 600 million won is fully exempted, and property tax over 600 million won is exempted up to 600 million won.
Farming and rental income is possible: You can directly farm or rent the farmland secured while receiving a pension, so you can have additional income while receiving a pension.
Farmland Pension Receipt Calculation
7. Disadvantages of Farmland Pension
The biggest drawback of farmland pension is probably the biggest drawback and stumbling block of children’s opposition.
It is good for the farmer himself as a guarantee of old-age life, but if he joins the farmland pension, he will not be able to pass on his legacy to his children, and many people will be reluctant to sign up for opposition from their children.
Also, if the farmland has a priority security, you cannot sign up at all. Farmland pension is allowed only when the price of senior bonds is less than 15% of farmland price, so many farmers say that it is difficult to sign up for farmland pension.
In the farmland pension payment method, the period-type pension receives more pension than the life-term pension, but there is a disadvantage that it cannot be received after a certain period of time. Therefore, it is necessary to choose whether to be a term type or a life type in consideration of various circumstances.
Above, we learned about the farmland pension.
You can download the file below and refer to the Farmers Pension manual distributed by the Rural Community Promotion Corporation.
The manual provides more detailed explanations such as the interest rate of the loan.
Farmland Pension Manual.pdf
0.31MB
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