Farmland Pension Subscription Conditions (Reforms in 2022)
Farmland pension subscription conditions will be eased from 2022. The age of subscribing to the Farmland Pension is lowered from 65 to 60, and a more stable retirement plan can be established by revising the management transfer type product and introducing a product that gives preferential treatment to low-income farmers and long-term farmers. 농지연금 가입조건
Below, we will summarize the conditions for joining the Farmland Pension, the changes in 2022, and the advantages and disadvantages for those considering joining. 좋은뉴스
• What is Farmland Pension?
• Farmland Pension Subscription Conditions
• Farmland excluded from subscription
• Types of farmland pension
• Calculation of farmland pension receipts
• Changes to Farmland Pension in 2022
• Farmland Pension Advantages and Disadvantages
• How to apply for farmland pension
• Closing remarks
What is Farmland Pension?
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How are you preparing for old age? If you own farmland, farmland pension can be an alternative to stably spend your old age.
Farmland Pension, also called Farmers Pension. Farmland Pension is a system that helps farmers live a comfortable life in their old age by providing a stable monthly pension using farmland owned by farmers as collateral.
Until death, each person can receive a farmland pension of up to 3 million won per month, depending on the appraised value of the land they own. However, not everyone can sign up, and only those who meet the conditions for joining the Farmland Pension can apply.
Farmland Pension Subscription Conditions
The conditions for joining the Farmland Pension are largely three conditions: age, farming experience, and target farmland. Below is a detailed look at the conditions for subscribing to the Farmland Pension.
Enrollment age
As of the last day of the application year, the farmland owner must be 60 years of age or older
Applicant can also apply if the applicant and his or her spouse jointly own the property.
farming experience
Applicant’s agricultural experience of 5 years or more
Based on the date of application for farmland pension, you must have farming experience of at least 5 years in the past
However, even if the farming experience is not 5 years in a row, it is possible if the total farming period is more than 5 years in total.
target farmland
◾ Farmland owned by applicants for farmland that is actually being used for farming
◾ The following requirements are applied from newly acquired farmland after January 1, 2020 (* For farmland sold at auction, it is applied from January 1, 2020)
Farmland owned by the applicant for 2 years or more (in the case of inherited farmland, including the holding period of the ancestor)
If the straight-line distance between the applicant’s address and the farmland must be within 30 km, or the applicant’s address is within the Si/Gun/Gu where the farmland is located and the Si/Gun/Gu adjacent to it
◾ Farmland without mortgage or other limited real rights
◾ Farmland that is not subject to seizure, provisional seizure, or provisional disposition
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farmland excluded from subscription
Illegal building installation land
Land jointly owned by a person other than the person and their spouse
Farmland in areas that have been converted as development areas and development plans have been announced.
Farmland acquired through public auction (after January 1, 2018) However, subscription is possible if all of the following conditions are met
As of the date of application for farmland pension, the applicant’s farmland holding period is 2 years or more
If the location of the resident registration is within 30 km of farmland
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Types of Farmland Pension
fixed-term life sentence
The subscriber (spouse) can receive a fixed amount every month until death.
back and forth thin type
During the first 10 years of membership, you will receive a larger pension than the fixed-rate pension, and from the 11th year you will receive less.
Occasional withdrawal type (changed from temporary withdrawal type to occasional withdrawal type in 2022)
You can withdraw the required amount from your pension at any time. (within 30% of the total payable amount)
fixed-term fixed-term
Subscribers can designate an annuity payment period and receive a flat amount every month.
Eligible age for subscribing to farmland pension by payment method
Payment Method Lifetime / Management Transfer Fixed-term fixed-term (5 years) Fixed-term fixed-term (10 years) Fixed-term fixed-term (15 years)
Membership age 60 years of age or older 78 years of age or older 73 years of age or older 68 years of age or older
Calculation of farmland pension receipt
The amount of farmland pension benefits depends on the appraised value of the collateral farmland and its age. The higher the assessed value and the older the person, the higher the pension paid each month.
To calculate the farmland pension receipt amount, click ‘Calculate Farmland Pension Receipt’ below to calculate the pension receipt amount.
Calculate farmland pension receipts
Changes to Farmland Pension in 2022
Reduced from 65 years old to 60 years old based on the farmland pension subscription age
Introduction of preferential products for low-income farmers (extra 10% monthly payment)
Introduction of preferential products for long-term farmers (5% additional payment per month)
Existing contractor product change allowed (once within 3 years without restrictions on re-subscription type)
Introduced an early repayment system (mid-term redemption possible once every 3 years)
In the event of the death of a subscriber during the management-directed product pension payment period, the heir can sell the farmland as collateral to the Corporation.
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Farmland Pension Advantages and Disadvantages
The farmland pension system has many advantages, but there are also disadvantages. Therefore, if you are considering joining, please take a good look at the advantages and disadvantages and make a decision after sufficient consultation.
Advantages of Farmland Pension
In the event of death of a farmland pension recipient, the spouse can succeed (however, the age of the spouse must be 60 or older and the pension succession must be selected)
Farmland worth less than 600 million won is fully exempted from property tax.
Property tax exemption for farmland exceeding 600 million won up to 600 million won
Possible to directly cultivate or rent farmland along with pension receipt (possible additional income other than pension)
Stable with government budget support system
Disadvantages of Farmland Pension
not inheritable by children
Since the collateral farmland is set lower than the market price, the actual amount of pension receipt is not high.
Since interest is compounded, if you receive it as a lump sum, the interest may be higher than the principal depending on the variable interest rate.
Additional interest burden when repurchasing collateral farmland after early termination or expiration (0.5% risk charge)
Conditions for subscribing to farmland pension are difficult
Repayment of annuity received at the time of sale of collateral farmland
Even if you search the Farmland Bank website, only the advantages are listed, but it is difficult to find the disadvantages. As it is a system supported by the government, there is a need to clearly list the shortcomings, but I think this part is unfortunate.
How to apply for Farmland Pension
You can apply for farmland pension through the farmland bank/farmland pension portal (https://www.fbo.or.kr/). If you submit an application form on the homepage, a counselor will guide you through consultation and application documents related to farmland pension over the phone.
If you click ‘go to farmland pension application’ below, you will be directed to that page.
Go to Farmland Pension Application
Closing remarks
Today, we learned about the conditions for joining the farmland pension. In fact, I was too busy to live day by day, so I hadn’t thought about old age, but this time, while writing an article related to farmland pension, I started to seriously think about old age. As it is an annuity with pros and cons, it is recommended that you carefully examine it and make a decision after sufficient consultation.
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