Changes in 2016

Fathers taking paternity leave will get more subsidies from the government. / Korea Times

By Yoon Ja-young, Jhoo Dong-chan

More job chances for moms

The government will set up more centers to help women, who quit work after marriage or childbirth, get jobs again through job training.

It will also offer financial benefits to companies that hire such women as interns.

More paternity leave

To encourage more fathers to take paternity leave, the government will provide a childcare leave subsidy for three months to fathers, up from the current one month.

Up to 1.5 million won is offered per month.

Eased rule on hotel construction

Hotels can be built 75 meters away from schools, instead of the previous 200 meter rule, a measure to provide more accommodation amid the rising number of inbound travelers.

Hotels near schools must be business hotels with more than 100 rooms and be without entertainment facilities such as bars to prevent possible negative effects on students.

Cancellation of tour programs available anytime

Customers can cancel their trip contracts at any time before departure. So far, cancellation was often unavailable a couple of days before the tour, as the contract was subject to each travel agency’s own terms.

But it will not necessarily mean customers will be exempt from cancellation fees.

Korean history will be a mandatory subject on the college entrance exam. / Korea Times

Korean history mandatory at CSAT

Korean history will become a compulsory subject in the college scholastic ability test (CSAT).

The subject has been optional so far, but the government decided on the change following criticism that students who do not take the course have little knowledge of the nation’s history.

Free-learning semester

All middle schools will adopt a “free-learning semester” which will allow students to join discussions, field trips and other on-the-job training without taking exams.

It was one of the key education policies of President Park Geun-hye, aiming at giving students an opportunity to explore their potential.

Minimum wage at 6,030 won

The minimum wage will rise to 6,030 won ($5.16) per hour, up 8.1 percent from 2015’s 5,580 won.

It is 48,240 won per day and some 1.26 million won per month for workers who work eight hours a day and 40 hours a week.

Retirement age

The retirement age will rise to 60 from 58 for companies with more than 300 workers.

Companies are encouraged to adopt the “peak wage system” in which elderly workers get paid less to provide more job opportunities to young jobseekers. The government will expand financial support for companies adopting the system.

A new guideline on mortgages will strengthen the evaluation of individual incomes. / Korea Times

Updating address at financial firms

When people move residence, it is troublesome to update their new address with banks, insurance companies, and other financial institutions, as they usually have transactions with many of them.

From 2016, there won’t be such a nuisance as they will be able to change their addresses registered at all financial institutions by changing only one of them through the Internet or by visiting an outlet.

Launch of Internet-only banks

Two consortiums, one led by KT and the other by Kakao, will launch the first Internet-only banks in the latter half of 2016.

Consumers are expected to enjoy convenient payment and money transmittance services via mobile devices, overcoming limits in time and space. Those with low credit ratings, who had to turn to loan sharks as they couldn’t borrow money from commercial banks, are also expected to get loans from Internet-only banks at lower interest rates.

Stricter regulation on mortgages

A new guideline will be applied to mortgages, strengthening the evaluation of a person’s income. Those seeking to borrow 30 million won or more should verify their income.

They will also have to pay both principal and interest each month in the installment payment schedule, which contrasts with previous rules that make many pay the entire principal at the end of the loan term while paying only interest each month.

Foreign tourists buying items worth less than 200,000 won will have their taxes refunded immediately

Tax refund for foreign tourists

Previously, foreign tourists who shop at duty free shops receive their tax money back at ports and airports when they leave Korea. From 2016, however, foreign tourists who buy items that cost less than 200,000 won will be able to get their taxes back immediately at duty free shops.

Foreign tourists who get cosmetic surgery will get value added taxes refunded, temporarily from April 1 next year to March 31, 2017.

Individual Savings Account

Individual Savings Account, where a person can manage all their investments such as funds as well as savings in one account, will be launched in March. They will be exempt of tax for gains less than 2 million won, and will also be subject to low tax rates for gains surpassing that.

This aims at encouraging individuals to save and make financial investments, thereby helping them accumulate assets as well as promoting the financial market.

Overseas equity funds

For those making capital gains from funds that invest in overseas stocks, tax will be exempted. To get the tax exemption, the person should subscribe to the fund between January 2015 and December 2017. They will get a tax exemption for 10 years.

This aims at controlling the huge foreign exchange reserve as well as diversifying individuals’ investment.