Transition Team: "100,000 KRW Monthly for Parents with Children Under 1 Year Old... Establishment of Public Pension Reform Committee"

Ahn Cheol-soo Announces New Government's Welfare State Reform Direction

Ahn Cheol-soo, Chairman of the 20th Presidential Transition Committee, announced the welfare state reform plan of the Yoon Suk-yeol administration on the afternoon of the 29th at the transition office in Tongui-dong, Jongno-gu, Seoul. [Image source=Yonhap News]

The Presidential Transition Committee has unveiled the blueprint for the welfare state reform direction of the Yoon Seok-yeol administration. It plans to introduce a monthly parental allowance of 1 million won for children under the age of one and to establish a Public Pension Reform Committee for structural pension reform. Additionally, work incentives such as the Earned Income Tax Credit (EITC) will be strengthened.

On the afternoon of the 29th, Ahn Cheol-soo, the head of the Transition Committee, announced the new government's welfare state reform direction at the briefing room of the Transition Committee in Tongui-dong, Jongno-gu, Seoul. The committee emphasized that due to growth without employment and low birthrate and aging, the sustainability of our society is deteriorating, and they aim to build a sustainable welfare system that grows and circulates positively through employment.

First, the committee plans to introduce a parental allowance of about 1 million won per month for children under one year old (0-11 months) and support child-rearing through full-day elementary schools and phased integration of childcare for infants and toddlers aged 0-5.

Regarding the parental allowance, the amount will be gradually increased. Ahn Sang-hoon, a professor in the Department of Social Welfare at Seoul National University and a member of the Social Welfare and Culture Subcommittee, said at the briefing, "We plan to start with 300,000 won this year, increase to 700,000 won next year, and reach 1 million won in 2024."

Furthermore, the committee has set a policy to expand the coverage and level of basic livelihood security to strengthen support for low-income households, and to increase work incentives by reviewing the maximum payment amount of the Earned Income Tax Credit and rationalizing asset requirements.

They will also promote a phased increase in the basic pension payment linked to pension reform and expand customized elderly jobs such as social service jobs. In the field of disability support, they plan to introduce a "personal budget system" that strengthens users' choice, and expand disability care services including activity support services and care systems for people with developmental disabilities.

To respond to new social service demands from youth, dual-income families, and single-person households, the government will encourage various forms of investment such as government support, corporate and religious social contributions, and social finance. Through innovative social economy organizations in the form of cooperatives and social contributions from companies and religious groups, an environment will be created where social service providers can diversify.

In particular, the committee will accelerate public pension reform. To discuss the overall pension system related to old-age income security, including the basic pension, National Pension, special occupational pensions, and retirement pensions, the establishment of a Public Pension Reform Committee is being pursued.

Countries like Sweden and Germany, which have succeeded in structural pension reform, went through sufficient public discussion processes, so the Public Pension Reform Committee will also operate transparently, ensuring sufficient learning and deliberation led by the public.

The committee explained, "Along with this, after recalculating the National Pension finances, we will prepare parameter reforms (adjustments to contribution rates and benefit rates) to enhance the sustainability of the National Pension and prioritize these through parliamentary discussions."