Korea to pay inflation-linked basic pension retroactively to bottom 45% of elderly
In short
Health and Welfare Minister Jeong Eun-kyung said the government will retroactively pay the inflation-linked increase in the basic pension to elderly people in the bottom 45% of income, after criticism that freezing payments for the first quarter of next year amounted to a de facto cut. Under the reform plan, the bottom 30% would receive 380,000 won a month from April, those between 30% and 45% would get 359,000 won, and higher-income recipients would stay at 350,000 won. Payments from January to March would remain at this year’s 350,000 won, with the retroactive increase to be reflected in the National Assembly’s budget and legal review.
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Health and Welfare Minister Jeong Eun-kyung said on Oct 7 that the government will retroactively pay the inflation-linked increase in the basic pension to elderly people in the bottom 45% of income, after criticism that freezing payments in the first quarter of next year amounted to a de facto cut. Jeong said on social media that she would do her best to ensure the retroactive budget for the bottom 45% is reflected smoothly in the National Assembly’s budget and legal review. Newsis reported that the increase would be paid retroactively from the first quarter of next year. [ 1 , 2 , 3 ]
The Ministry of Health and Welfare had announced a plan to maintain the basic pension’s target coverage at the bottom 70% of elderly income while paying more to those with less. Under the plan, the bottom 30% would receive 380,000 won a month, 30,000 won more than now, and those between 30% and 45% would receive 359,000 won, linked to inflation. Recipients above that would stay at 350,000 won with no increase. But the government’s budget proposal kept payments for January to March at this year’s level of 350,000 won for all recipients, which drew accusations of a de facto cut, since the pension has been raised each year in line with prices. [ 2 , 3 ]
Jeong explained that the budget was drawn up to maintain the 350,000 won base amount for all recipients through March, to allow time to build the system and revise subordinate legislation for the differentiated payments, and that it did not include a retroactive inflation-linked payment. She said paying the inflation-linked increase to the bottom 45% retroactively when the reform takes effect in April would better serve the plan’s aim of strengthening income protection for low-income elderly. [ 2 , 3 ]
At the National Assembly’s health and welfare committee audit the same day, Jeong responded to Rep. Baek Jong-heon of the People Power Party, who said the ministry had promised to shift more support to lower incomes but had dropped the part that would reduce payments to higher-income recipients out of concern over political backlash, keeping the bottom 70% structure. Jeong said the gap will widen further if the freeze on recipients above the bottom 45% continues, that there are limits to achieving the shift within one year, and that the plan keeps the principle of giving more to those with less. She also said the couple reduction for the bottom 45% would be cut from 20% to 10%, raising payments by about 120,000 won for couple households and costing about 1 trillion won more. [ 2 ]
President Lee Jae-myung shared Jeong’s post, saying additional support for low-income people is a measure needed to ease polarization and that there is no reason to avoid an exceptional measure if it matches substantive fairness, according to Asia Economy. The report said budget work for the retroactive payment to the bottom 45% is expected to move forward in the National Assembly’s budget and legal review. [ 3 ]
Why it matters
The basic pension is a politically sensitive benefit for South Korea’s elderly, and the decision to pay the increase retroactively responds directly to accusations that low-income recipients would lose ground to inflation for three months. Carrying it out depends on the National Assembly reflecting the money in the budget and on legal revision, so the outcome is not yet settled. Support from President Lee Jae-myung, as reported by one outlet, signals the measure has backing at the top of the government.
Key facts
- Health and Welfare Minister Jeong Eun-kyung said on Oct 7 that the inflation-linked increase for the first quarter of next year will be paid retroactively to elderly people in the bottom 45% of income. [ 1 , 2 , 3 ]
- The ministry froze basic pension payments at this year’s level of 350,000 won a month for all recipients from January to March, which drew criticism of a de facto cut. [ 2 , 3 ]
- Under the reform plan, the bottom 30% would receive 380,000 won a month, 30,000 won more than now; those between 30% and 45% would receive 359,000 won linked to inflation; and higher-income recipients would stay at 350,000 won with no increase. [ 2 , 3 ]
- Jeong said the budget kept the 350,000 won base amount for all recipients through March to allow time to build the system and revise subordinate legislation, and did not include the retroactive inflation-linked payment. [ 2 , 3 ]
- Jeong said the couple reduction for the bottom 45% would be cut from 20% to 10%, increasing payments by about 120,000 won for couple households and costing about 1 trillion won more. [ 2 ]
- Jeong made the comments in response to Rep. Baek Jong-heon of the People Power Party at the National Assembly’s health and welfare committee audit. [ 2 ]
- President Lee Jae-myung shared Jeong’s post and said additional support for low-income people is a necessary measure to ease polarization, according to Asia Economy. [ 3 ]
Confirmed by several sources
- The government will pay the inflation-linked rise in the basic pension retroactively to elderly people in the bottom 45% of income. [ 1 , 2 , 3 ]
- Basic pension payments for January to March of next year were set at this year’s level for all recipients, prompting criticism of a de facto cut. [ 2 , 3 ]
- The reform plan sets 380,000 won a month for the bottom 30%, 359,000 won for the 30-45% bracket and 350,000 won for higher-income recipients. [ 2 , 3 ]
- Jeong Eun-kyung announced the retroactive payment through her social media account. [ 2 , 3 ]
Still unclear
- Whether the National Assembly will approve the retroactive payment for the bottom 45%. The documents say only that budget work is expected to move forward in the National Assembly’s budget and legal review; no decision has been reported.
- Whether recipients above the bottom 45% will receive any inflation adjustment for the first quarter. The documents describe the retroactive payment as applying to the bottom 45% and do not say what happens to other recipients.
- Exactly when families will receive the retroactive sum. One document says the retroactive payment would be made when the reform takes effect in April, but no payment date is stated.
What local media are saying
Timeline, local time
- Newsis reports that Minister Jeong Eun-kyung said the inflation-linked basic pension increase will be paid retroactively from the first quarter of next year. [ 1 ]
- Yonhap reports the plan, the frozen first-quarter payments and Jeong’s remarks at the National Assembly health and welfare committee audit. [ 2 ]
- Asia Economy reports the decision, Jeong’s social media statement and President Lee Jae-myung’s support for the measure. [ 3 ]