Article 40 (Calculation of Public Pension Income)

Public pension income (hereinafter referred to as "public pension income") under Article 20-3 (1) 1 of the Act shall be calculated as the amount calculated according to the following formulas for each payer of public pension for the public pension received in the relevant tax period, based on January 1, 2002 (hereinafter referred to as the "tax reference date" in this Article and Article 42-2 (1)) (hereinafter referred to as the "tax reference amount" in this Article). 1. Pension income under the 「National Pension Act」 and linked old-age pension under the 「Act on Linkage of National Pension and Occupational Pension」<img src="http://www.law.go.kr/flDownload.do?flSeq=22010501" alt="img22010501" >┌──────────────────────┐│ Amount received × Cumulative converted income ││ during the tax │ after the tax reference date of ││ period │ payment period of pension ││ │──────────────────────││ │ Cumulative converted income of total ││ │ payment period │└──────────────────────┘</img> 2. Other public pension income<img src="http://www.law.go.kr/flDownload.do?flSeq=22010503" alt="img22010503" >┌───────────────────┐│ Amount received × Number of months of contribution ││ during the tax │ paid after the tax reference date││ period │───────────────────││ │ Total number of months of ││ │ contribution paid │└───────────────────┘</img>

Notwithstanding paragraph ①, if there are contributions or personal payments (only amounts confirmed under Article 201-10; hereinafter referred to as "tax-excluded contributions, etc.") paid without receiving the pension premium deduction under Article 51-3 of the Act after the tax reference date (or the date of re-employment or re-enrollment if calculated considering the date of re-employment or re-enrollment as the tax reference date under paragraph ②), the amount obtained by subtracting the tax-excluded contributions, etc. from the tax reference amount shall be the public pension income. In this case, if the tax-excluded contributions, etc. exceed the tax reference amount for the relevant tax period, the excess amount shall be deducted from the tax reference amount from the following tax period. <Amended 2014.2.21>

In the calculation formula in Article ① 1, "converted income" means the amount obtained by converting the standard monthly income for each year of the subscriber's enrollment period to the present value of the year before the commencement of pension benefits, according to the revaluation rates by year announced by the Minister of Health and Welfare, pursuant to Article 51 (1) 2 of the 「National Pension Act」.