[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 contribution 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 four-person household. 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 a booklet on the 31st titled "Changes from 2026 Onwards," detailing upcoming changes to health, welfare, and employment policies starting next year.

In 2025, amendments to the National Pension Act will take effect, raising both the contribution rate and the nominal income replacement rate. The contribution rate will increase by 0.5 percentage points each year for the next eight years, starting from 9% this year to 9.5% next year. For employees, the portion of their salary paid as a national pension contribution will rise from 4.5% to 4.75%. The nominal income replacement rate will also increase from 40% to 43%.

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

Additionally, starting in January next year, the standard median income (the median household income used as a criterion for 80 welfare programs) will increase by 7.20% for single-person households and by 6.51% for four-person households. Consequently, the monthly eligibility criteria for the Basic Livelihood Security Program, which applies a certain percentage to 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 monthly benefit for a four-person household will exceed 2 million won.

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 whose household income was below 50% of the median received 100,000 won per month. Going forward, surviving spouses of deceased veterans who are also 80 or older and low-income will receive 150,000 won per month, an increase of 50,000 won from 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 a principal employer substantially controls or determines specific working conditions for subcontracted workers, it will be recognized as the employer for those conditions and will be obligated to negotiate. Excessive damages claims will also be restricted.

Business owners with 50 to fewer than 100 regular employees who increase employment of persons with severe disabilities will receive disability employment improvement 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 dual system qualifications with the same content and scope as process-based national technical qualifications will also be recognized as having acquired national technical qualifications.

The minimum hourly wage effective from January next year will be 10,320 won, up from 10,030 won this year. This translates to a daily wage of 82,560 won for an 8-hour workday, and a monthly wage of 2,156,880 won for a 40-hour workweek (assuming 209 working hours per month, including 8 hours of paid weekly leave).

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