By Lee Kyung-min
Starting next year, about 150,000 people aged over 64 earning less than 20 percent of the median income will be able to receive 300,000 won ($270) as a basic pension, two years sooner than initially scheduled, the government said Wednesday. The program to raise the amount by 50,000 won will be expanded to those who earn less than 40 percent of the median income by 2020.
Strategy and Finance Minister Kim Dong-yeon and the ministers of welfare, SMEs and trade, unveiled the measure to expand state welfare subsidy programs for people in the lowest income bracket including the elderly, day laborers and self-employed.
The pension increase is in addition to a similar one set to take effect in September, which will allow those aged over 64 who earn less than 70 percent of the median income to receive 250,000 won, a 40,000 won increase from the current 210,000 won. About 5 million people will benefit from the increase, which comes nearly four years after the last increase in July 2014.
The ministry will help the elderly with daily expenses, housing and medical expenses over the next three years to cut the number of the elderly living in poverty by up to 65 percent.
The rise in the pension payout comes amid the government's continued efforts to boost financial independence of the elderly from their children. According to a survey commissioned by the National Pension Service, two out of five recipients of the basic pension said their relationships with their children, as well as spouse, friends and neighbors improved.
The state-run institution quizzed 1,800 people in 2017 between June and July. Out of the total, 39.4 percent said they had better relationships with people around them overall while 42 percent said marital relationships improved after they receive the monthly benefit. Nearly 80 percent said the pension helped them maintain a “decent” life, and 62.9 percent said they felt respected by society. However, more than half, or 53.3 percent, said they felt guilty for burdening future generations.
The government said implementation is due within the year of a separate law which was revised to allow people _ whose immediate family members have stable income, assets or property _ to receive the welfare subsidy. Around 70,000 people will be able to receive up to 140,000 won extra as the revision will expand the scope of the coverage to benefit those who live with family members who are either over 64 or disabled and earn less than 70 percent of the median income.
The earlier law disqualified such people from the subsidy as they were deemed “morally responsible” to take care of their vulnerable family members, most of whom have to depend heavily on their more “able” counterparts. This law has been long criticized for impoverishing the elderly and the disabled, as many people feel reluctant to support their financially bereft “burdensome” family members.
An estimated 4.8 percent of the population will be eligible for the basic welfare program, up 1.6 percent from the current 3.2 percent. Under the basic welfare program, households earning less than 30 percent of the median income are given a monthly state subsidy. The amount is calculated based on the number of family members and whether they are on other state-run support programs.