Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Moon's savings assistance funding stirs controversy over foreigners' subscriptions
A mobile subscription page of the government's Youth Hope savings product is seen at a bank's sales office in Seoul on Feb. 21. Yonhap
By Lee Min-hyung
By Lee Min-hyung
The government's ambitious savings product is stirring controversy, as foreign nationals residing here can also sign up for the high-interest product, which many people argue goes against its original intent.
Those aged between 19 and 34 can subscribe to the so-called “Youth Hope” savings product if their annual salary from the previous year does not exceed 36 million won ($29,800). The product has drawn popularity among young people here, as it offers a maximum of 10 percent interest returns annually.
A total of 11 commercial banks here started registration for the product on Feb. 21. The government will allocate a 45.6 billion won budget to providing high returns for subscribers to the welfare program.
But this has drawn strong public backlash from those who believe it is a waste of Korean taxpayers' money to provide equal assistance to foreigners residing and paying taxes here.
Under the budget, only around 380,000 people can subscribe to the product if they join with a maximum monthly deposit of 500,000 won over a period of two years. Foreign residents who satisfy the basic criteria are qualified to sign up for the benefit if they have resided in Korea for more than 183 days and pay income tax here.
“It would be better for the government to come up with policies in more detail, so Korean citizens do not feel a sense of frustration due to such reverse discrimination,” a 32-year-old office worker surnamed Kim said.
“The point should be to make more young people benefit from the product, rather than helping foreigners who pay less taxes than locals win the benefit.”
On top of that, the government failed to forecast demand for the products by a huge margin, so the government is advised to take into consideration a number of factors before launching such a welfare product, Kim said.
The highly controversial youth savings product received greater-than-expected response, causing connection delays in some banking apps on the day of its launch.
The government is considering an expansion of the budget, so more young people can take advantage of the product.
But cries of discrimination from disenfranchised citizens show little sign of abating unless foreign residents are disqualified from eligibility for subscription.
A 34-year-old salaried worker also expressed complaints over the annual salary limit of the product.
“Every time the government introduces such a financial product for public welfare, I am unqualified for it, as my salary exceeds the limit slightly,” he said. “I have been in a welfare blind spot. If the government had restricted foreign residents from signing the product, it would have been able to increase the salary limit or reshape the program, so more young people here could benefit from the product in various ways.”
Another office worker, identified only by her age of 34, posted a petition on the presidential office's website a few days after the savings product became mired in controversy over claims of reverse discrimination against Korean citizens. The post has since drawn agreement from more than 12,600 people only four days after it was uploaded to the website on Feb. 24.
“It is desirable that the minimum wage increases and the government provides support to young people here,” she said. But it is not fair that foreign residents can receive the benefit with Korean taxpayers' money at a time when local citizens who also paid taxes cannot do so, according to her.
It is not known how many eligible foreign residents have signed up.