[Changes in the New Year] National Pension Contribution Rate to Rise from 9% to 9.5%

Increase in National Pension Contributions and Income Replacement Rate
Contribution Rate to Rise by 0.5 Percentage Points Annually for Eight Years
Higher Median Income Raises Various Benefits
Livelihood Benefit for Four-Person Household Set at 2,

Starting next year, the national pension insurance premium rate will increase from 9% to 9.5%.

The median income, which serves as the basis for calculating various benefits such as livelihood, medical, housing, and education support, will rise by 6.51% for a family of four. As a result, the maximum monthly livelihood benefit will be 2,078,000 won, surpassing 2 million won for the first time.

A view of the shantytown in Donui-dong, Jongno-gu, Seoul.

The Ministry of Economy and Finance published the booklet "Changes from 2026" on December 31, outlining the upcoming changes in health, welfare, and employment policies starting next year.

Next year, due to the implementation of the revised National Pension Act, both the national pension insurance premium rate and the nominal income replacement rate will increase. The premium rate will rise by 0.5 percentage points each year for the next eight years, starting from next year. Since the current rate is 9%, it will become 9.5% next year. For employees, the portion of their salary paid as a national pension premium will increase from 4.5% to 4.75%. The nominal income replacement rate will rise from 40% to 43%.

The credit system, which provides additional recognized periods of national pension enrollment for military service and childbirth, will be expanded. The recognized period for military service will increase from the current 6 months to a maximum of 12 months. For childbirth, the 12-month credit previously applied only to the second child will now also apply to the first child. For the third child and beyond, the credit remains at 18 months per child, but the previous cap of 50 months has been removed.

Additionally, from January next year, the standard median income (the median income of national households, used as the selection criterion for 80 welfare programs) will increase by 7.20% for single-person households and 6.51% for four-person households. As a result, the monthly eligibility criteria for the Basic Livelihood Security Program, which applies a certain percentage of the standard median income, will also rise.

Accordingly, the maximum monthly livelihood benefit will increase from 765,000 won to 821,000 won for single-person households, and from 1,951,000 won to 2,078,000 won for four-person households. This is the first time the benefit for a family of four will exceed 2 million won per month.

From March next year, spouses of veterans will also be eligible to receive livelihood support payments. Previously, only low-income veterans aged 80 or older with a median income at or below 50% received 100,000 won per month. Going forward, surviving low-income spouses aged 80 or older of deceased veterans will receive 150,000 won per month, an increase of 50,000 won compared to this year.

In March next year, with the implementation of the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act), negotiation channels will open between principal employers and subcontractor labor unions. If the principal employer substantially controls or determines certain working conditions for subcontracted workers, the principal employer will be recognized as the employer for those conditions and will be obligated to negotiate. Excessive compensation for damages will also be restricted.

Business owners with 50 to fewer than 100 regular employees who increase employment of persons with severe disabilities will receive incentives for up to one year. The support amount is 350,000 won for men with severe disabilities and 450,000 won for women with severe disabilities. In addition, those who obtain work-study qualifications with the same content and scope as process-based national technical qualifications will also be recognized as holders of national technical qualifications.

The minimum hourly wage, effective from January next year, will rise to 10,320 won from this year's 10,080 won. This equates to a daily wage of 82,560 won for an 8-hour workday, and a monthly wage of 2,156,880 won based on a 40-hour workweek (209 hours per month, including 8 hours of paid weekly leave).

To ensure that products incorporating the latest technologies are quickly adopted in medical settings, the approval process for changes to medical devices will shift to a negative-list system. Only significant changes that affect safety and efficacy will require prior approval, while all other changes will be evaluated and managed voluntarily by companies.