[New Government Growth Strategy] Gradual Mandate of Retirement Pension Plans... Child Allowance Eligibility Raised by One Year Annually

After-School Program Vouchers Provided
"1,000 KRW Breakfast" for University Students to Be Expanded

The government will gradually make it mandatory to introduce retirement pension plans in order to strengthen old-age income security. To support housing stability for young people, the monthly rent support program will be converted into a permanent initiative. To ease the burden of raising children in the era of low birth rates, the government will provide vouchers for after-school programs to reduce educational expenses, and the eligibility age for child allowances will be expanded by one year each year.

On August 22, the Ministry of Economy and Finance announced these measures as part of the "New Government Economic Growth Strategy." The ministry plans to strengthen the multi-layered old-age income security system through pensions by gradually making it mandatory for all workplaces to enroll in retirement pension plans. Currently, employees can choose between a retirement pension, which is paid out in installments, and a lump-sum severance payment received upon retirement or resignation.

This is in line with the multi-layered old-age income security system outlined in the five-year policy implementation plan of the Lee Jaemyung administration. The government has presented a blueprint to gradually mandate the introduction of retirement pensions and expand the retirement pension fund for small and medium-sized enterprises, aiming to cover all workers, including special employment types and platform workers. At present, small business retirement pension coverage is limited to workplaces with 30 or fewer employees. Starting next year, it will be expanded to those with 50 or fewer employees, and by 2027, to those with 100 or fewer employees.

To support stable old-age income for the elderly, the government will also improve the home pension system. The home pension is a state-guaranteed financial product that allows homeowners aged 55 or older to live in their homes while receiving a fixed monthly amount for life, using their home as collateral. To promote the home pension, the government is considering increasing the monthly payment amount and lowering the entry barriers. In addition, the government will gradually improve the couple reduction policy for low-income couples who both receive the basic pension, which currently reduces the benefit by 20%, and will also revise the national pension reduction system. Currently, if a beneficiary's average monthly income (309,000 KRW as of 2025) is exceeded, the pension amount is reduced.

After-School Program Vouchers and Child Allowance Eligibility Expanded by One Year Annually

Financial and tax support to ease the burden of raising children will also be strengthened. The income criteria for single-parent families to receive child-rearing support will be relaxed to reduce their childcare burden. Currently, child-rearing support is provided to single-parent families with an income at or below 63% of the median income, but the government plans to improve these criteria. In addition, tax credits for arts and sports academy tuition will be expanded to include first and second graders in elementary school, and vouchers for after-school programs will be provided to reduce educational expenses required for child-rearing.

The eligibility for the monthly child allowance of 100,000 KRW will be expanded by one year each year. The child allowance was introduced to reduce the financial burden of child-rearing and is currently provided to all children under the age of eight. Previously, on August 13, the National Policy Planning Committee decided to gradually expand the eligibility for the child allowance by one year each year from under eight to under thirteen by 2030.

Youth Monthly Rent Support of Up to 200,000 KRW Becomes Permanent

Policies to reduce living costs and improve housing stability for young people and low-income households will also be expanded. The government will convert the youth monthly rent support program, which was scheduled to end this year, into a permanent initiative. This program provides up to 200,000 KRW per month in rent support for one year to young people from non-homeowning households with an income at or below 60% of the median income. By making this program permanent, the government aims to address housing instability among young people.

The "1,000 KRW Breakfast" program will also be expanded in stages. This program provides a rice-based breakfast to university students for 1,000 KRW to promote healthy eating habits among young students with a high rate of skipping breakfast and to encourage rice consumption. For meals costing 5,000 KRW, the government provides 2,000 KRW, and local governments and universities each provide 2,000 KRW. The government will also work to reduce the burden of communication costs. By introducing the "National Data Safety Option," which allows basic communication services such as search and messaging to be used even after the data allowance is exhausted, the government aims to alleviate the burden of communication expenses.