Audit Finds Crypto Exclusion From Basic Pension Asset Test Lets Wealthy Seniors Receive Benefits

A South Korean government audit found that cryptocurrencies are excluded from the asset calculation used to determine eligibility for the basic pension, allowing some wealthy seniors to receive benefits.

Audit findings released by the Board of Audit and Inspection on April 13 showed that cryptocurrencies and overseas financial assets are currently excluded from the "income conversion of assets" calculation under the basic pension system.

As a result, crypto holdings are not reflected in pension eligibility reviews. The audit said this could cause fiscal leakage and raise fairness concerns because eligibility can differ depending on how assets are held. It also identified cases in 2023 in which some elderly people with at least 500 million won ($342,000) in overseas financial assets received the basic pension.

The audit also found insufficient legal grounds to obtain information on crypto holdings. Current rules do not adequately allow authorities to obtain holding data from virtual-asset service providers or require pension applicants to submit related documents.

The Board of Audit and Inspection said it notified the Ministry of Health and Welfare that the system needs to be improved. It proposed pursuing revisions to the Basic Pension Act and related rules so overseas financial assets and cryptocurrencies are included in the asset calculation.