Committee mulls reducing basic pension eligibility but increasing amount

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A basic pension evaluation committee under South Korea’s Ministry of Health and Welfare is positively considering a proposal to reduce the eligibility for the country’s basic pension for seniors, currently paid to elderly citizens at the bottom 70 percent of the income eligibility scale, as well as increasing the amount by 100,000 won ($73.81).

According to welfare ministry data obtained by Jung Choun-sook, a lawmaker for the Democratic Party and member of the National Assembly’s Health and Welfare Committee, the Ministry of Health and Welfare’s Scheme Improvement Committee recently presented a report with the proposal. Considering the financial sustainability of the current system, the committee believes that it is necessary to revise the system toward reducing the number of beneficiaries and increasing the pension amount to achieve the goals of efficiently easing elderly poverty and ensuring stability in their later years.

The proposal specifically includes narrowing the scope of recipients from the bottom 70 percent of the income eligibility scale to 100 percent of the median income, or the income of the household in the middle of a line of households in order of income, while increasing the pension amount from the current average of 300,000 won to 400,000 won. The median income for a single-person household is 2.08 million won per month in 2023.

The proposal also suggests considering a differentiated payment system that gives more to low-income elderly citizens.

The committee believes that the scope of recipients should be further reduced in the long term to around 50 percent of the median income, while increasing the pension amount to a level that guarantees a minimum income. In this case, 40 to 50 percent of the elderly population is estimated to be eligible for the pension.

The welfare ministry, however, cautioned that the proposal from the committee is “one of the various basic pension reform proposals suggested by the advisory body” and that “the government has yet to make any decision on the direction of basic pension reform.” However, given that the idea of reducing the number of recipients and increasing the pension amount has been raised many times among experts, there is a high possibility that the proposal will be included in the government‘s pension reform plan to be announced next week.