[Population Crisis Response] Increasing 'Yukhyu' and Establishing 'Immigration Policy'... Full Effort to Address Low Birthrate and Aging Population

2nd Population Future Strategy Vice Ministers' Meeting of Related Ministries
'Population Structure Changes and Response Measures'
Selection of 4 Major Areas and 6 Core Tasks

[Asia Economy Sejong=Reporters Kim Hyewon and Song Seungseop] In response to South Korea's low birthrate and aging population, known as the 'world's fastest aging and poorest country with the lowest birthrate,' the government has selected four major areas and six core tasks to initiate structural reforms.

The government is considering providing parental leave benefits to special-type workers and artists enrolled in employment insurance, as well as unemployment benefits for newly employed seniors aged 65 and over. The duration of infertility treatment leave will be extended, and regulations on foreign workforce recruitment will be relaxed.

A medium-term teacher supply and demand plan to adapt to the declining school-age population will be prepared by the first quarter of next year, and the distribution method of the fund for responding to local extinction will also be improved.

On the 28th, the government held the '2nd Population Future Strategy Vice Ministerial Meeting' chaired by Na Kyung-won, Vice Chairperson of the Low Birthrate and Aging Society Committee, at the Government Seoul Office, announcing the 'Population Structure Changes and Response Measures' containing these details.

This policy agenda was jointly identified by the Ministry of Economy and Finance's Population Crisis Response Task Force (TF) and the Presidential Low Birthrate and Aging Society Committee since the new government took office.

Through the six core tasks, the government plans to promote bold institutional reforms based on social discussions on structural reform tasks such as extending senior employment and welfare system reforms, and effectiveness analysis of existing policies like childcare support. Based on policy effectiveness analysis, existing projects will be reorganized, and the 'Basic Plan for Low Birthrate and Aging Society' will be supplemented and announced next year.

Consideration of Parental Leave Benefits for Special-Type Workers and Artists...Enhancing Effectiveness of Spousal Paternity Leave

The government is devising measures to create a work-life balance and a discrimination-free childbirth and parenting environment, considering ongoing career interruptions among women and blind spots in maternity protection systems for workers in small and medium enterprises and freelancers.

To resolve women's career interruption issues and increase economic participation rates, the government will improve the reduced working hours system during childcare. The eligible child age will be raised from the current 8 years to under 12 years, and measures to promote the employment of substitute workers will be prepared by the second half of next year. Methods such as strengthening recruitment services or providing incentives for hiring women who have experienced career breaks are being discussed. The 'Gender Employment Disclosure System,' which publicly releases gender data, will start in the public sector next year, with consideration for expansion to the private sector. Additionally, incentives will be expanded for small and medium enterprises that maintain family-friendly company certification from the Ministry of Gender Equality and Family for extended periods.

Childbirth and parenting systems will also be revised. Based on the maternal protection survey results, the parental leave period will be extended from 1 year to 1.5 years. The 'spousal paternity leave split-use system,' currently available only once, and the 'infertility treatment leave,' criticized for being only three days and insufficient, will also be extended. For infertility leave, the government plans to encourage its use by introducing an employer's confidentiality obligation. The provision of parental leave benefits to special-type workers and artists enrolled in employment insurance is also under consideration.

Incentives for small and medium enterprises maintaining family-friendly company certification for extended periods will be expanded, and laws and systems will be revised to prevent discrimination based on parents' legal marital status during childbirth and parenting processes. The government intends to consider granting institutional benefits similar to marriage by recognizing parents who are not legally married but meet certain conditions as the child's legal guardians or representatives.

Skilled Worker Conversion Quota Expanded 2.5 Times...Relaxation of Foreign Workforce Regulations

To alleviate labor shortages across industries caused by continued low birthrate and aging, the government will promote regulatory relaxation for active and flexible recruitment of foreign workers and consider establishing a systematic immigration policy to respond to the decline in the economically active population.

To attract excellent foreign talent, the visa issuance experience requirement for foreign professionals hired by small and medium enterprises will be relaxed from the current 5 years to 3 years. A negative visa system (E-7-S) will be newly introduced, allowing visa issuance regardless of the pre-approved occupations (93 categories) for outstanding foreign workers who meet certain conditions. The annual total quota for skilled worker conversion will be significantly increased from 2,000 this year to 5,000 next year. For non-professional workers, the residency qualification period for conversion to skilled workers will be relaxed from 5 years to 4 years, allowing conversion without leaving and re-entering the country.

The government will prepare improvement measures for the Employment Permit System to ensure timely supply of labor suitable for industrial demand, and will also consider expanding the allowed number of non-professional workers per workplace and improving labor market tests (such as shortening the mandatory job search period).

Foreign graduates with excellent Korean language skills who wish to work in non-professional jobs domestically will be converted to foreign workers under the Employment Permit System (E-9), and part-time work hours for foreign students (D-2) will be flexibly expanded based on academic achievement. A 'fast track' for permanent residency and naturalization of outstanding science and technology talents will be introduced in the first half of next year.

Plans to shift the paradigm through systematic immigration policies will also be discussed. The government plans to establish an immigration policy promotion system to serve as a control tower and prepare mid- to long-term immigration policy directions.

Increased Tax Deduction for Pension Savings...Consideration of Unemployment Benefits for Elderly Workers

In preparation for an aging society, the government will expand tax deductions for pension savings and re-pursue phased mandatory retirement pension implementation. It will also accelerate social discussions on introducing a Korean-style continuous employment system and consider applying unemployment benefits to newly employed workers aged 65 and over.

First, to increase retirement income, a multi-layered pension system will be established. The tax deduction for pension savings will be increased from 4 million KRW to 6 million KRW (combined with retirement pension tax deduction from 7 million KRW to 9 million KRW). The government plans to abolish severance pay and gradually mandate retirement pensions, while preparing measures to ease burdens on small and medium enterprise employers and workers, such as incentives for early adoption of retirement pensions. The amendment to the Employee Retirement Benefit Security Act will be submitted to the National Assembly in the second half of next year.

To comprehensively understand post-retirement income of the elderly, the government plans to complete the development of comprehensive pension statistics linking public and private pension data by October next year. South Korea's elderly poverty rate is known to be 38.9%, the highest among OECD countries.

Social discussions on extending senior employment, including the introduction of a Korean-style continuous employment system and reform of the win-win wage system, will be accelerated. This refers to procedures for establishing legislation on continuous employment for those aged 60 and over linked to wage system reform.

Continuous employment incentives for small and medium enterprises will be expanded from 10.8 billion KRW this year to 26.8 billion KRW next year, and senior employment support funds will increase from 5.4 billion KRW to 55.8 billion KRW.

Based on social discussions on continuous employment, the government will consider applying unemployment benefits to newly employed workers aged 65 and over.

To encourage reemployment and entrepreneurship among the elderly, an integrated employment tax credit will be introduced, and hiring support for those aged 60 and over will be expanded. For senior employment, the deduction amount for small and medium enterprises will be raised from 11 million KRW to 14.5 million KRW in the metropolitan area and from 12 million KRW to 15.5 million KRW in other regions.

Medical, care, and nursing services for the elderly will also be expanded. An integrated assessment system that evaluates medical and nursing care needs and links appropriate services based on health and function will be prepared within next year, and a pilot project for home medical care centers will be conducted. The government will support private sector entry into elderly care services and encourage diversification and scaling up, reviewing supply expansion measures.

To respond to increased medical demand due to aging and expand training of residents in regional hospitals, the government will negotiate adjustments to medical school quotas and explore phased introduction of foreign nursing specialists for the elderly.

Employment indicators will be refined to respond to aging by subdividing the economically active population survey age groups from '70 and over' to '70-74' and '75 and over,' and related indicators will be provided.

The government will also review the entire life-cycle care system for infants, children, and the elderly. To promote Neulbom School (full-time education with care provided until 8 p.m.), a dedicated operation system centered on education (support) offices will be established, and village care operating hours will be extended from the current 7 p.m. to 8 p.m.

Support for private sector entry into elderly care services and measures to encourage diversification and scaling up, as well as phased introduction of foreign elderly nursing specialists, will be reviewed together.

Medium-Term Teacher Supply and Demand Plan to be Prepared in Q1 Next Year...Non-Commissioned Officer Appointment Age Limit Raised to 29

To adapt to the declining school-age population and respond to local extinction, the government will promote efficiency and redistribution of resources, facilities, and personnel in the education sector. The medium-term teacher supply and demand plan (2024?2027) will be prepared by the first quarter of next year, and retirement returnee towns with quality residential and living conditions will be established in small and medium-sized cities experiencing population decline. The fund distribution method for the Local Extinction Response Fund project will be improved by the first half of next year, and the units of land, urban, and regional policies will be redesigned from the current administrative district units to reflect population size and economic activity.

The government will operate a special account for higher and lifelong education support funded by education tax and other sources from the education finance grant to invest in nurturing future talents, and will simultaneously work on education finance efficiency considering future changes in the educational environment. Additionally, the government will abolish alternative military service for police officers, coast guards, and firefighters, and reform the personnel recruitment system by raising the age limit for officer (second lieutenant and sergeant) appointments from the current 27 to 29 to secure military service resources.