[2025 Budget] Livelihood Benefits Increased from 22 Million to 23.42 Million Won with 20.8 Trillion Won Invested to Strengthen Basic Livelihood Security

Historic Maximum Increase in Median Income Standard for 3 Consecutive Years
Senior Job Opportunities Expanded from Record 1.03 Million to 1.1 Million

From next year, 20.8 trillion KRW will be invested to strengthen the Basic Livelihood Security, including a 1.41 million KRW increase in livelihood benefits. This is 1.1 trillion KRW more than this year's budget (19.7 trillion KRW). The government believes that strengthening the Basic Livelihood Security is necessary to alleviate the increased living burdens of vulnerable groups in the era of high inflation. Additionally, the government plans to invest 24.4 trillion KRW to increase senior jobs by 100,000 compared to this year and to raise the basic pension.

On the 27th, the Ministry of Economy and Finance announced the '2025 Budget Proposal' containing these details. The total budget for Basic Livelihood Security-related expenses, including livelihood benefits, medical benefits, and housing benefits, is 20.8 trillion KRW, a 5.58% increase from this year's 19.7 trillion KRW. In particular, to strengthen the Basic Livelihood Security as the last safety net for vulnerable groups, the government decided to allocate 8.49 trillion KRW for livelihood benefits, a 12.58% increase from the previous year’s 7.5411 trillion KRW. The government also raised the ‘standard median income,’ which serves as the benchmark for various welfare programs, by a record-high rate of 6.42%, resulting in a 1.41 million KRW annual increase in livelihood benefits for a four-person household compared to this year. The standard median income represents the median value of household income and is used as the eligibility criterion for 74 welfare programs, including Basic Livelihood Security and national scholarships.

The government explained that it is a necessary time to reduce the living burdens of vulnerable groups due to accumulated high inflation. According to the Bank of Korea, the cumulative inflation rate from 2020 to 2023 was 13.2% for the highest income quintile but reached 15.5% for the lowest income quintile. The government’s increase in livelihood benefits over the past three years (4.98 million KRW annually) is more than twice the amount of the previous administration (2.35 million KRW annually).

The government plans to significantly expand senior jobs from the current 1.03 million to 1.1 million by investing 2.1847 trillion KRW, a 7.81% increase from this year’s 2.0264 trillion KRW. In particular, to improve job quality, the government will increase social service-type and private sector jobs, which are classified as quality jobs, by 37% compared to this year. A Ministry of Economy and Finance official stated, “While social service-type and private sector jobs averaged about 22% over the past five years under the previous administration, we will expand them to 37% next year, nearly a 1.7-fold increase.” Since those born in 1960, classified as ‘Baby Boomers,’ will enter the elderly population from next year, the government judged that policies targeting seniors should focus on labor rather than simple cash support.

The government will also invest 21.8646 trillion KRW, an 8.23% increase from this year’s 20.2015 trillion KRW, to raise the basic pension from 334,000 KRW to 344,000 KRW. This is based on the assessment that although the elderly poverty rate is improving, it remains at a high level. According to the Ministry of Economy and Finance, the relative poverty rate among the elderly was 43.2% in 2019, 40.4% in 2020, 39.3% in 2021, and 39.7% in 2022. The number of senior-friendly national sports centers will also be more than doubled from 8 to 20. These centers receive 3 billion KRW in construction support over four years. Additionally, a new lifelong education voucher exclusively for seniors, worth up to 350,000 KRW annually, will be introduced.

To promote labor activities among vulnerable groups, 3.4 billion KRW will be invested to provide self-sufficiency success funds of up to 1.5 million KRW. The government plans to provide 500,000 KRW if labor activity continues for six months after exiting welfare and 1 million KRW after one year. The number of self-sufficiency workers will be expanded from 69,000 to 72,000, and the self-sufficiency allowance will be increased by 3.7%, with an additional budget of 60.1 billion KRW. This aims to provide opportunities to escape poverty through increased labor incentives and opportunities.

Low-income unemployed youth will also be supplied with low-interest youth self-reliance funds. In a situation where the lack of quality jobs is reducing social mobility for low-income groups, the government plans to newly provide loans for self-reliance to 13,000 youths. According to the Ministry of Economy and Finance, the rate of maintaining the same income quintile for five years in the lowest income quintile increased from 7.2% in 2009 to 12.3% in 2021, and the rate of exiting welfare through private employment among Basic Livelihood Security recipients decreased from 33.7% in 2015 to 24.8% in 2023.