On Oct. 29, Minister of Health and Welfare Jeong Eun-kyung stated at the 8th plenary meeting of the National Assembly’s Special Committee on Pension Reform that changing the target beneficiary rate for the basic pension to an income-based standard is necessary. Minister Jeong’s remarks came in response to a question from People Power Party lawmaker Woo Jae-jun, who asked whether it is appropriate to label 70 percent of elderly citizens as impoverished and distribute funds to them.
Shifting Basic Pension Criteria and the Search for Social Consensus
The Ministry of Health and Welfare previously examined a proposal to alter the current basic pension eligibility criterion—which targets the bottom 70 percent of individuals aged 65 and older—to a standard based on median income. However, the ministry reverted to maintaining the status quo when it announced its reform plan on the 1st of this month. Under current guidelines, the basic pension is disbursed to 70 percent of all elderly people regardless of their recognized income amount. Shifting to an income-based standard would exclude elderly individuals who exceed the cutoff point, even if they theoretically fall within that 70-percent bracket.
Minister Jeong explained that while the ministry reviewed several scenarios for adjusting the system to a median-income standard, there was insufficient time for social discussion. She noted that consensus was lacking to make an immediate decision on the matter. Long-term reform measures will instead be formulated as a government proposal and discussed alongside the National Assembly’s Pension Reform Special Committee.
Debate Over the Graduated Payment Principle
During the committee meeting, lawmakers criticized the current basic pension reform plan for failing to adequately reflect the principle of providing more assistance to those with lower incomes while offering less to those with higher incomes. Under the government’s current proposal, individuals in the bottom 30 percent of income will receive 380,000 won per month, an increase of 30,000 won over current levels. Meanwhile, those in the 45th to 70th income percentiles will continue to receive 350,000 won, which is unchanged.
Addressing these concerns, Minister Jeong pointed out that the payout amounts for the 45th to 70th income percentiles will remain frozen for the upcoming year. She cautioned that if this freeze continues over time, the disparity in payment amounts could widen further. She added that there are inherent limitations to fully realizing a graduated payment structure within just the first year of implementation.
Did You Know?
The basic pension is currently provided to 65-year-old and older adults who fall within the lower 70 percent of recognized income, meaning payments are distributed without adjusting for individual income brackets unless reforms alter the baseline framework.
Reasons for keeping the current elderly pension standard
What is the current eligibility standard for the basic pension?
The basic pension is currently given to the bottom 70 percent of elderly individuals aged 65 and older, regardless of the precise amount of their recognized income.
Why did the government decide against shifting to a median-income standard?
Minister Jeong Eun-kyung explained that although the Ministry of Health and Welfare reviewed multiple scenarios for a median-income shift, there was not enough time for social discussion and public consensus before finalizing the recent reform plan.
How do payouts differ under the current reform proposal?
Individuals in the lowest 30 percent income bracket will receive 380,000 won per month—an increase of 30,000 won—while those in the 45th to 70th income percentiles will continue to receive 350,000 won.
How should policymakers balance broad elderly support with targeted financial assistance in future pension revisions?
Keep reading