Kim Tae-nyeon Democratic Party Bill Adopted as Party Policy
Expansion of Beneficiaries to Be Pursued After Regular National Assembly
Plan to Coordinate with Pension Reform Special Committee and Proceed
[Asia Economy Reporter Naju-seok] The Democratic Party of Korea has stepped back from its position of providing a basic pension of 400,000 won to all elderly aged 65 and over. In this year's regular National Assembly session, they plan only to revise the regulation that reduces the pension amount when both spouses receive the basic pension, postponing any expansion of eligibility until after the session.
On the 10th, a policy committee official from the Democratic Party said, "We have decided to proceed with the basic pension step by step," adding, "We intend to adopt the bill proposed by Democratic Party lawmaker Kim Tae-nyeon as the party's official stance."
The bill proposed by Representative Kim centers on abolishing the spousal reduction rule for the basic pension. Currently, the basic pension is paid to those aged 65 or older who fall within the bottom 70% income bracket, but if both spouses are eligible recipients, each pension amount is reduced by 20%. Kim argued, "Despite the existence of an income reversal prevention clause, uniformly applying a reduction to couples is excessive considering the severity of elderly poverty," and thus proposed the bill.
Lee Jae-myung, leader of the Democratic Party of Korea, visited the Central Association of the Korean Senior Citizens Association in Yongsan-gu, Seoul on the 4th and is taking a commemorative photo with Kim Ho-il, president of the Korean Senior Citizens Association, and other executives. Photo by the National Assembly Press Photographers Group
At the Democratic Party's parliamentary meeting the previous day, Floor Leader Park Hong-geun confirmed that Kim's proposal is the party's official stance. Explaining the direction of the amendment, Park said, "We aim to abolish the unreasonable regulation that cuts the pension amount by 20% when both spouses receive the basic pension," and added, "The Democratic Party will do its best to ensure that all elderly receive the same basic pension." This plan was also included in the Democratic Party's budget increase proposal for this year. The party had previously announced plans to increase the budget by 1.6 trillion won next year for amending the Basic Pension Act as a major budget expansion project.
Originally, Democratic Party leader Lee Jae-myung aimed to eliminate the bottom 70% income rule, the combined spousal income rule, and the income reversal prevention clause to provide the basic pension to all aged 65 and over. Accordingly, the party had promised to expand the basic pension through its initial seven legislative tasks. However, this comprehensive revision of the current basic pension system faced criticism regarding funding and the framework of pension reform. The bill closest to providing 100% basic pension was proposed by Democratic Party lawmaker Ko Young-in, which was estimated to cost an average of 14.6 trillion won annually over the next five years.
A Democratic Party official explained, "Pension reform inevitably involves budget considerations," adding, "For now, we will start with abolishing the spousal reduction and then proceed with expanding eligibility after the budget phase is over."
Moreover, there were concerns that retirement planning for citizens should be approached in connection with the National Pension and other public pensions, not just the basic pension. Increasing only the basic pension could lead to arguments that the National Pension is ineffective, and relying on the basic pension?which can be reduced anytime due to legal amendments?for retirement is risky.
Since a special committee on pension reform was originally formed in the National Assembly to discuss the basic pension alongside the National Pension and other public pensions, related laws are expected to be discussed within this pension reform special committee.
A Democratic Party official said, "Abolishing the spousal reduction does not affect the existing pension system, but increasing the basic pension amount or expanding eligibility could impact the system," adding, "We can handle the abolition of the spousal reduction separately from pension reform discussions and proceed with it first, while coordinating with the pension reform special committee on expanding the basic pension." Another official explained, "Even abolishing the combined spousal income rule alone can contribute to strengthening the guarantee of retirement life."
The Democratic Party plans to hold a party meeting on the afternoon of the 10th to finalize the party stance on the Basic Pension Act.
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