[2021 Budget] Health, Welfare, and Employment 199.9 Trillion Won... 36% of Next Year's Budget Focused (Comprehensive)

2021 Budget Proposal

Introduction of the National Employment Support System
Eliminating Blind Spots in Employment Insurance
Providing 570,000 Private Sector Jobs and 1,030,000 Public Sector Jobs

Industry, SMEs, and Energy Sector Increase by 22.9%, the Highest Growth Rate

[Sejong=Asia Economy Reporter Joo Sang-don] The government has decided to allocate 200 trillion won, accounting for 36% of next year’s budget of 555.8 trillion won, to the 'Health, Welfare, and Employment' sector. Through this, employment insurance will be gradually expanded to cover all workers, and the 'National Employment Support System' will be introduced to eliminate blind spots in the employment insurance system. Additionally, 570,000 private sector jobs and 1,030,000 public sector jobs will be provided.

According to the '2021 Budget Proposal' announced by the Ministry of Economy and Finance on the 1st, the government has allocated 199.9 trillion won to the health, welfare, and employment sector. This is an increase of 19.4 trillion won (10.7%) compared to this year’s 180.5 trillion won, continuing a four-year streak of over 10% growth since 2018 (11.7%).

The budget for this sector will be used to expand the social safety net by eliminating blind spots in the Basic Livelihood Security System and strengthening coverage. First, the obligation for support persons for livelihood benefits will be completely abolished in 2022. To strengthen coverage, the standard income will be increased by 2 percentage points annually over the next six years. The increase rate will be applied differentially, focusing on 1-2 person households. Improvements to housing benefits will also be pursued, such as adjusting the separate payment standard rent for youth housing benefits from 90% to 95-100% of the minimum housing standard.

Investment to expand infrastructure to overcome low birth rates and prepare for aging will also be strengthened. The supply of rental housing for newlyweds and youth will be expanded to 110,000 households, and support for early-life home visit health management will be increased (from 20 to 50 locations), along with the installation of obstetrics and gynecology clinics in vulnerable areas (5 new locations) and operation support (from 22 to 26 locations). To establish a stable income base for the elderly, the basic pension will be raised and elderly jobs expanded to 800,000.

Of the 30.6 trillion won job budget in this sector, 8.6 trillion won will be invested in 'job retention and creation.' This reflects the urgent need to overcome short-term employment shocks caused by COVID-19 and to proactively create jobs in response to rapid industrial structural changes. To maintain employment, employment retention subsidies will be provided to 450,000 workers (1.2 trillion won), and tailored support will be offered to youth, middle-aged workers, and small business owners to create jobs. Through this, 570,000 private sector jobs will be induced, and 1,030,000 public sector jobs will be provided to vulnerable employment groups such as the elderly and disabled.

The sector with the highest growth rate in next year’s budget is 'Industry, SMEs, and Energy.' It will increase by 22.9% (5.4 trillion won) to 29.1 trillion won from this year’s 23.7 trillion won. Investments in the Korean New Deal, including the digital economy and low-carbon energy transition, are central. Additional trade policy funds of 5.4 trillion won will be supplied, and comprehensive export support will be implemented through the establishment of non-face-to-face and online export support systems. The support budget for 'funding, research and development (R&D), and site' for the expansion of solar power and wind infrastructure has been increased to 1.3 trillion won.

The environmental sector budget has been set at 10.5 trillion won, an increase of 1.5 trillion won from this year, reflecting expanded investments in Green New Deal initiatives to address the climate change crisis and improvements in living environments such as air, water, and green spaces. The R&D budget will increase by 12.3% to 27.2 trillion won, with focused expansion of support for future advanced innovative technologies including the 'BIG3 (system semiconductors, future cars, bio-health)' and materials, parts, and equipment.