Things to be changed in 2017

By Jhoo Dong-chan

New Year’s Day is just around the corner while the nation is going through a political crisis following the Choi Soon-sil gate. Despite the absence of political and administrative leadership at the moment, there are several things to be changed next year.

Retirement age and minimum wage

The newly set retirement age of 60 will be implemented to all workplaces starting Jan. 1.

Government and public agencies as well as workplaces having more than 300 employees has implemented such retirement age so far, but the extension is now expected to be applied in all workplaces across the country.

In April 2013, the National Assembly passed a revised bill guaranteeing the right to retire at the age of 60 despite strong opposition from the business circles. Lawmakers agreed that enterprises and public institutes with more than 300 employees would be influenced by the new revision from January 2016, while the rest will be applied from January 2017.

Along with the extension of retirement age, the minimum wage is also expected to be raised by 7.3 percent to 6,470 won ($5.38) from Jan. 1.

The government has decided to increase next year's hourly minimum wage by 440 won, or 7.3 percent, from this year's 6,030 won.

The wage hike means a daily salary of 51,760 won for people who work eight hours a day, a monthly salary of 1.35 million won for those who work 40 hours per week, or 209 hours per month. The Ministry of Employment and Labor said the pay raise would affect 3.36 million workers in Korea.

Despite the hike, the decision reportedly neither labor nor management.

The labor circles, which has demanded the hourly minimum wage to be raised into 10,000 won for two years in a row, expressed their disappointment, claiming the government has ignored the desperation of workers by not allowing a double-digit increase.

The Korea Employers Federation, which represents employers, also insisted the hike would add to the woes of smaller firms and self-employed business owners already grappling with difficulties, saying the raise will mean that workplaces with fewer than 30 employees have to spend an additional 2.5 trillion won every year.

Income tax hike

The government has decided to create a new top-tier rate for income taxes. Those earning more than 500 million won per year will be subject to a 40-percent income tax rate.

It marks the first time in 16 years for South Korea's income tax rate to reach 40 percent. The highest rate bracket, which hovered around 70 percent in the 1970s, continued to decline over the past decades to reach 36 percent in 2002 and then went up to 38 percent in 2012, which currently applies to those earning more than 150 million won per year.

The finance ministry estimates around 46,000 people will be affected by the change, and the hike is expected to enable the government to collect around 600 billion won more annually.

Birth and childcare leave

Those workers who apply for birth or miscarriage leave are allowed to receive 1.5 million next year, a 150,000 won increase from the previous grant.

Applicant workers are required to submit their applications one month after their leave starts or 12 months within their returns.

In a bid to encourage married workers give births, the government will expand their subsidies to small and medium-size enterprise for child-care leave. It has subsidized 200,000 won so far, but will increase the grant in 300,000 per each worker who leave for the care.

Resident registration number

Starting May 30, Korean nationals are allowed to change their Resident Registration Number (RRN) if satisfying certain requirements.

Those Korean citizens who are considered to be threaten their life, property and rights through Personal information leakage are allowed to change their RNN. Except applicant’s date of birth and sex, the last six-digit numbers in RNN will be allowed to be changed.

Eco-friendly vehicle

The government will encourage old diesel-powered vehicle drivers to change their cars next year.

Those drivers who have owned a diesel car for more than 10 years since 2006 are eligible to be exempted 70 percent of consumption tax if they buy a new car within two months after scraping their old ones, next year.

In a bid to introduce more eco-friendly cars in the streets here, the government will continue exempting maximum 4 million won for those who buy and register a new electric, plug-in, or hybrid vehicles until December 2019.