Korea’s unemployment benefits could be depleted next year: Data

(MK DB)

South Korea’s unemployment benefit account reserves could be completely depleted as early as next year, data showed on Thursday.

The unemployment benefit account is a government-managed fund used to provide unemployment benefits to the unemployed.

According to data obtained by the office of Representative Kim So-hee of the main opposition People Power Party from the Ministry of Employment and Labor on Thursday, the unemployment benefit account within the country’s Employment Insurance Fund is expected to post a deficit of 233 billion won ($168.4 million) this year and a 132 billion won deficit next year.

The government has expanded the scope of benefit recipients to include young people, the elderly, and specially employed workers amid an economic slowdown and growing instability in the labor market.

It already spent 6.4 trillion won on unemployment benefits in the first half of this year alone - well over half of the originally budgeted 10.92 trillion won.

In response, the employment ministry allocated an additional 1.29 trillion won for unemployment benefits in the second supplementary budget, but critics argue that this amount is still far from sufficient.

The bigger issue is that expenditures are likely to grow even further under the government’s current policy direction.

The government is considering a plan to provide job-seeking benefits once in a lifetime to those aged 34 or under who voluntarily change jobs.

The employment ministry estimates that this could require an additional 500 billion to 1 trillion won in annual funding.