Welfare in South Korea

Overview

South Korea's welfare level has evolved significantly over time. In the past, limited resources and defense spending priorities hindered welfare development. But since the early 2000s there has been a gradual increase in welfare spending. In 2023 the welfare budget amounted to 109 trillion won ($84.4 billion) – one-sixth of the national budget. The perception of welfare has shifted from negative to positive, with positive reviews for education and health policies. The National Health Insurance system is regarded as one of the best globally, but there are concerns about wasteful resource use. While certain welfare policies have surpluses, others face shortages, such as low allowances for veterans. The national pension system is essential due to aging demographics. Women's welfare has been a significant focus, with efforts to address gender inequality and promote women's rights. Overall South Korea's welfare system has undergone significant transformations and improvements.

History

Past and present level

The level of welfare in South Korea was significantly low in the past. In the 1940s and 1980s South Korea had to devote much of its government finances to defense spending to prepare for the threat of North Korea's Invasion. Thus could not afford to spend it on welfare.

Since the beginning of the 2000s, Korea's welfare level has gradually increased. As welfare policies in Europe became known and polarization problems – elderly poverty, a poor child, etc. – intensified, political discourse on welfare formed in Korea. Many people are insisting on strengthening welfare as the OECD ranking of the welfare budget relative to GDP is lower than that of the United States, a neoliberal country. In particular, Korea's welfare policy for the disabled is still the lowest among major OECD countries. As public sentiment pays attention to welfare, politicians are also strengthening welfare policies.

It is 109 trillion won(approximately $84.4 billion) that the welfare budget in 2023, one-sixth of the total national budget for a year. The reason for spending such a large proportion on welfare is ostensibly people's livelihoods and human rights, but in fact, it is the maintenance of vested interests and populism of politicians. In the past, when the state was poor, socialist ideas spread among the people, making it difficult to maintain vested interests.

Korea, a late welfare state, established the basic framework of the traditional social welfare system in the early 2000s, but exposed a wide blind spot due to its low level of coverage, and new social risks became important due to rapid aging and changes in economic and social structures. As a result, there was a debate over whether to focus on eliminating blind spots in the traditional welfare system (mainly cash benefits) or preparing for new social risks such as work-family compatibility and active labor market policies.

Change in people's perception of welfare

Negative perception

The perception of welfare in Korean society was negative. "Person who do not work, do not eat," "The poor are punished because they have been lazy without trying, and there is no need to help such people." The South Korea people in past had a laissez-faire tendency that could only be found in 19th-century England.

Positive perception

Korea's welfare policy has begun to receive positive reviews. In particular, it stood out in the fields of education and health.

Surplus of welfare policy

National Health Insurance

It is one of Korea's social security systems and belongs to public health care. The annual medical expenses of one American are more than four times higher than those of Koreans. The basis for application is in accordance with the National Health Insurance Act and is operated by the National Health Insurance Corporation and the Health Insurance Review and Assessment Service. Health Insurance Review and Assessment Service under the Ministry of Health and Welfare. The National Health Insurance Corporation is in charge of financial management of health insurance payments and expenditures, and the Health Insurance Review and Assessment Service is in charge of managing medic.

Korea's medical insurance is among the best in the world. Korea's health insurance system has opened the era of national health security 12 years after its introduction, the fastest in the world. Considering the low insurance premium burden and health indicators above the OECD average (average life expectancy, infant mortality rate per 1,000 people, high medical accessibility, high quality of medical care, etc.), it is clear that it is a good system that foreign countries envy. There will be no disagreement that one of the best policies since the establishment of the Korean government is the introduction of the national health insurance system.

However, the practice-specific fee system adopted by Korea is wasting resources by encouraging excessive medical treatment. According to the statistical yearbook related to health insurance, the current balance of health insurance was 2.7 trillion won to 5.9 trillion won every year from 2013 to 2016, but it began to deteriorate in 2017 and recorded losses of 3.3 trillion won and 2.9 trillion won in 2018 and 2019, respectively.

Shortage of welfare policy

Support fund for persons of national merit

The monthly allowance for Korean War veterans is 250,000 won, and the monthly allowance for veterans' honor is 200,000 won. In addition, the allowance for widows of war veterans is only 50,000 won.

Typical welfare policy

The national pension

The national pension is an income security system that helps you maintain a basic life by paying monthly premiums when you have income and then being unable to work due to age, or being disabled or killed by an unexpected accident or disease. While the average life expectancy is increasing due to the improvement of living standards and the development of Medical Technology, the birth rate is decreasing and the proportion of the elderly population is rapidly increasing. However, not many people can afford to prepare for their own retirement. If this is left unattended, most of the elderly can be reduced to the elderly and have a difficult retirement, so it is the national pension system that the state implements to prevent this problem. The public pension system, such as the National Pension Service, first started in Germany in 1889 and is currently operating in more than 170 countries. In Korea, it was started on January 1, 1988, for workplaces with more than 10 workers, and the target was expanded step by step so that the entire nation could subscribe to the national pension on April 1, 1999. As of the end of January 2022, the number of National Pension recipients exceeded 5.93 million and the number of subscribers was 22.1 million, serving as the country's basic social safety net along with health insurance, employment insurance and industrial accident insurance.

Women's welfare policy

The concept of women's welfare (female welfare) can be defined in various ways depending on the perspective of view. In other words, it is not easy to define the concept of women's welfare in a word because there are various perspectives on the causes and solutions of women's problems. However, despite various perspectives, it can be a common starting point for women's welfare that it should passively improve women's realistic inequality and actively contribute to improving women's quality of life as humans.

Even before women's welfare established itself as a field of social welfare, the term women's welfare was already used in various academic fields. However, efforts to attempt or agree on the concept and definition of women's welfare became active in the late 1990s.

The early concept of women's welfare was used as a general concept of "welfare for women" or as a "collective term for welfare policies and programs that affect women." In the early days, women's welfare was used as an ideological and symbolic concept rather than a specific realistic movement. However, for women's welfare to become a field of social welfare, it has been argued that realistic and specific concepts should be included rather than the definition of declarative meanings or ideological concepts.

According to the Korea Women's Development Institute, "women's welfare refers to a state in which women's health, property, and happiness are satisfied by equally guaranteeing human dignity and the right to a human life by the state or society, and at the same time includes all practical efforts to realize women's human life." Such a definition is a concept that includes the ideological purpose of realizing gender equality as well as specific aspects of improving the patriarchal social system and legislative system.

In the 2000s, the definitions of the concept of women's welfare emphasized not only the feminist position of realizing gender equality by overcoming gender inequality caused by patriarchy and capitalism, but also the social system and legal system to realize it. This means all theoretical and practical efforts made by society as a whole in terms of macro aspects of institutional and policy perspectives and microscopic aspects of technical and large perspectives for all women, with the aim of eliminating mechanisms that suppress women such as patriarchy and capitalism. In addition, if policy for women is a government policy related to various areas of women's lives, women's welfare is a part of "Social Welfare" among various areas of women's lives and includes not only government policies but also private-level efforts.There are several policies to encourage women's participation in society and enhance women's human rights. It helps women whose careers have been cut off due to pregnancy, childbirth, and childcare to enter society again. For example, monthly subsidies are provided to multi-child households.  To create high-quality women's jobs, there is also a welfare policy that provides free education for women and provides them with jobs.

1) Women's Movement and Women's Welfare in the 1980s

The women's movement in the 1980s brought about a major shift in women's welfare. The women's movement in the 1980s is characterized by active women's group activities advocating "feminism," which is distinct from the conservative mainstream women's groups that have been led by the government. In 1983, the Women's Council worked to break down the culture of gender discrimination, highlighting the problems of beaten women and sexual violence as social problems, and presented Korea's first temporary shelter model. In addition, in the 1980s, women's movement organizations such as "Another Culture", "Korean Women's Association", "Christian Women's Association", "Korean Women's Workers' Association", and "Korean Women's Association" were created, affecting women's welfare. In addition, the women's movement joined forces to enact the Gender Equality Act and revise the Family Act.

Laws and systems related to women's movement and women's welfare in the 1980s

the women's movement

Government Policy and Women's Welfare (Law, System-oriented)

• Support for early retirement litigation and activities to cope with retirement • Opposition to unpaid menstrual leave • Call for the introduction of political and employment quotas • Demand for Expanded Women's Welfare Budget • Sexual torture countermeasures committee activities and human trafficking countermeasures activities • a struggle to revise the Equal Employment Law for Men and Women • a campaign to revise the family law • Daycare legislation

• The Constitution's New Regulations on the Rights of Gender equality (1980 and 1897) • U.N. Convention on the Elimination of Discrimination Against Women (1984) • Comprehensive revision of the Maternal and Child Health Act (1986) • Enactment of the Equal employment Act (1987) • Amendment to the Equal Employment Act (1989) • Enactment of the Mother and Child Welfare Act (1989) • Revised appointment of local public officials (abolition of gender-restricted recruitment) • Third Amendment to the Family law (1989)

2) Women's Movement and Women's Welfare in the 1990s

In the 1990s, the growth of civil society and various social movements were activated in Korean society amid the global wave of openness. Under this environment, the women's movement became more active policy-oriented activities. In addition, the social welfare-level tasks encountered in women's daily lives were set as the specific goal of the women's movement, expanding the public base, and diversifying exercise methods and contents. In addition, each women's organization has specified the direction of activity and specialized its own characteristics, focusing on interest in a specific field. In this regard, laws and systems related to women's movement and women's welfare were shown in the 1990s. As shown in Table 2 below, the women's movement in the 1990s led the most reformative legislation in the field of social welfare, including the enactment of the Infant Care Act and the revision of the Special Act on Sexual Violence and Domestic Violence.

Laws and systems related to women's movement and women's welfare in the 1990s

the women's movement

Government Policy and Women's Welfare (Law, System-oriented)

• Campaign to enact the Infant Care Act • a campaign against the abolition of menstrual leave • Campaign to introduce the quota system for women's employment • a campaign to revise the Equal Employment Law for Men and Women • Japanese Military Sexual Slavery countermeasure activities • a campaign to enact a special law on sexual violence • a campaign to expand women's political participation • Campaign for the Prevention of Family violence Act • a campaign to abolish family headship system

• Enactment of the Infant Care Act (1991) • Enactment of the Japanese military Sexual slavery Support Act (1993) • The Punishment of Sexual violence Crimes and the Protection of Victims Act (1994) • Enactment of the Framework Act on Women's Development (1995) • Amendment of the Act on Prevention of Recreation, etc. (1995) • Introduction of the women's recruitment target system under Civil Service Appointment Test Decree (1995) • Establishment of the Child Care Leave System and Nursing Leave System under the National Public Officials Act (1995) • Revision of the Act on Family Violence (1997) • Second and third amendments to the Equal Employment Act (1995, 1999) • Act on the Prohibition and Relief of Gender Discrimination (1998) • Abolishing Military Additional Points (1999)

3) Women's Movement and Women's Welfare in the 2000s

In the 2000s, above all, the Ministry of Gender Equality and Family (currently, the Ministry of Gender Equality and Family), which is in charge of women's policy, became more active in public-private and academic cooperation. Through active intervention by the women's movement, the Maternal Protection-related laws, such as the Gender Equality Act, the Labor Standards Act, and the Employment Insurance Act, were revised. Table 3 below shows laws and systems related to women's movement and women's welfare in the 2000s.

Laws and systems related to women's movement and women's welfare in the 2000s

women's movement

Government Policy and Women's Welfare (Law, System-oriented)

• a campaign to abolish family headship system • Women's Solidarity for the Presidential Election • a campaign against prostitution • a campaign to expand women's budgets • Women's Political Power and Political Reform Movement • a campaign to secure the public nature of childcare • Campaign to expand social security system and create jobs to prevent poverty for women

• Establishment of the Ministry of Gender Equality in the Government Organization Act (2001) • Amendment of the Act on the Prohibition and Relief of Gender Discrimination (2001, 2003) • Revision of the Equal Employment Act, the Labor Standards Act, and the Employment Insurance Act (2001) • Strengthening the quota system for female nominations under the Political Parties Act (2001) • Adolescent Sex Protection Act (2001) • Enactment of the Act on the Promotion and Support of Women in Science and Technology • the enactment of the Mother and Father's Welfare Act • Introduction of the target system for training and recruitment in the appointment of public officials • Enactment of the Act on the Punishment and Prevention of Crimes such as Prostitution Mediation (2004) • Revision of the Family Law (2005) • Revision of the Government Organization Act (Transfer of the Ministry of Gender Equality, 2004) • Reorganization of the Ministry of Gender Equality and Family (2005) • Abolition of the Act on the Prohibition and Relief of Gender Discrimination(2005) • Act on the Promotion of Family-Friendly Social Environment (2007) • Enforcement of the Family Relationship Registration Act (2008) • Multicultural Family Support Act (2008) • Act on the Prevention of Sexual Violence and Protection of Victims (2010)

As such, women's welfare in Korea has led to remarkable growth by the women's movement since the 1980s. In particular, it has been developed by improving numerous women's welfare laws and systems, including the Special Act on Sexual Violence, the Domestic Violence Prevention Act, the Prostitution Prevention Act, and the Family Act. In the process of developing the women's movement, a cooperative relationship with the state was formed, and the state has also developed laws and systems related to women's welfare by institutionalizing the needs and experiences of women activists.

Youth welfare policy

Youth welfare policies can be easily found throughout life. Youth welfare policies mainly focus on economic difficulties or better educational conditions. Many teenagers have experienced discounts on transportation and culture and art viewing. There is also a policy to provide academic support so that no students give up their studies due to poverty.

In 2023, the government began to overhaul the youth support system. There are new systems, and there are cases where the existing system has been reorganized.

• 'Youth Leap Account' to Raise Large Amount of Money

It is scheduled to be released in June 2023, and is a financial product for young people aged 19 to 34 with work and business income. If you pay 700,000 won per month for five years, the government will pay up to 6% of the monthly payment, so you can get a large sum of 50 million won.

The subscription period is from June 2023 to December 31, 2025. It must meet the income standard of less than 60 million won in personal income and less than 180% of the median household income. However, if the mandatory five-year subscription period is not met and the termination is canceled in the middle, the reduced tax amount may be collected.

• Rising transportation costs 'support for youth public transportation costs'

The "Youth Public Transportation Expense Support," which was first implemented in 2022, is a support project that was so popular that 150,2015 people applied in the first year. Through this, 136,028 young people in Seoul saved an average monthly transportation cost of 6,181 won.

The project will continue in 2023. It plans to recruit a "Youth Public Transportation Support Project" in March to secure a budget that can support more than 150,000 people. The "Youth Public Transportation Expense Support Project," which received the second application from July to September, supplemented the support conditions so that more young people can apply. It has signed business agreements with six credit card companies so that they can apply for the business with their existing transportation cards without issuing separate transportation cards. The six credit card companies are BC Card, Samsung Card, Shinhan Card, Woori Card, Hana Card and KB Kookmin Card.

• Changing 'Youth Fill Tomorrow Deduction'

In the case of the Youth Tomorrow Fill Deduction, a system in which companies and the government support large sums of young people together, some reorganization will begin in 2023.

The Youth Tomorrow Fill Deduction is a financial product that allows young people, companies, and the government to make 12 million won at the expiration of two years after establishing a certain amount. It is for young people aged 15 to 34 working for small and medium-sized companies with a monthly salary of 3 million won or less.

Starting in 2023, the target of companies will be changed first from 2023. In all existing occupations with more than five employees, it is limited to manufacturing and construction industries with more than five to less than 50 employees. In addition, the amount of reserves has changed, increasing the amount that young people and companies have to pay. Previously, young people and companies paid 3 million won and the government paid 6 million won, respectively, but from now on, all young people, companies, and the government will pay 4 million won each. In the case of corporate levies, they were previously paid differently depending on the size of the company, but now they are 100% paid by the company.

• Youth Job Support System to Expand Opportunities

Youth challenge support projects will also be expanded to increase opportunities for young people to work. To promote employment for young people, mid- to long-term programs for more than five months will be introduced from 2023, and short-term programs will be paid up to 500,000 won and mid- to long-term programs will be paid up to 3 million won (2.5 million won in participation allowance and 500,000 won in incentives).

The youth job leap incentive system will also be expanded from 2023 to encourage companies to expand youth employment. The main goal is to provide up to 12 million won for two years through youth job leaping incentives if companies hire young people who are having difficulty finding jobs. In 2023, 600,000 won (a total of 7.2 million won) will be provided per month for the first year, and 4.8 million won will be temporarily provided after two years of service. From 2023, young people who extend protection, young people who enter and leave youth shelters, and young people who leave North Korea are also included.

Welfare policy for the elderly

• Basic pension: Approximately 270,000 won per month paid to senior citizens aged 65 or older and with less than 1.19 million won in income

• Comprehensive care services: Support for living education services for senior citizens living alone in need of protection

• Job support: Volunteer and talent sharing for 270,000 won per month

The term "elderly" subject to welfare for the elderly generally refers to a person aged 65 or older. The elderly who can receive long-term care benefits refer to people who are unable to live their daily lives alone due to old age or senile diseases, that is, those aged 65 or older or those under 65 who have senile diseases such as dementia and cerebrovascular disease.

The Basic Direction of Welfare for the Elderly

1. As a person who has contributed to the upbringing of descendants and the development of the country and society, the elderly are respected, guaranteed a healthy and stable life, and guaranteed the opportunity to engage in appropriate work and participate in social activities according to their abilities.
2. In addition, the Minister of Health and Welfare should conduct a survey on the health and welfare of the elderly every three years and announce the results.
3. To raise social interest and respect for the elderly, October 2nd is every year as Senior Citizens' Day and October is every year as Senior Citizens' Month.
4. Parents' Day is held on May 8 every year to enhance filial piety toward parents.
5. To raise awareness and induce interest in elder abuse nationwide, June 15th should be set as Senior Abuse Prevention Day every year, and the state and local governments should try to hold events and promotions suitable for the purpose of Senior Abuse Prevention Day.
6. The state and local governments divide elderly welfare into areas such as housing, health, income, leisure, safety, and protection of rights and interests, and publish "Guide to Elderly Health Welfare Project" and "Basic Pension Project" every year.

Multicultural Family Welfare Policy

Seoul Metropolitan Government's Self-Support Project

Business name	Business details
Support for social integration of multicultural families	Operation of employment support and employment education programs for multicultural families Regional Specialization Project for Multicultural Family Supporting Multicultural Families
Support for multicultural children's learning	Support for visiting children from multicultural families Career Advancement Project for Children of Multicultural Families Self-help groups for multicultural families and support programs for mother tongue education
Providing customized care services for multicultural families	Multicultural family care service before and after childbirth Part-time child care service for multicultural families

The positive effects

Korea provides high-quality compulsory education to middle school students. The number of students per teacher is 11.4. It also introduced a free school meal system so that poor students can eat school meals without worrying.

In the health sector, the "National Health Insurance" is receiving the best evaluation from the public. The state provides a certain portion of the cost of medical treatment and medicine so that there are no people who can endure pain due to lack of hospital expenses.

Limitations

Korea's public social welfare expenditure is 12.3% of gross domestic product (GDP), which is 60% of the average of the Organization for Economic Cooperation and Development (OECD).

According to the Ministry of Health and Welfare, the OECD recently released the "OECD Social Expenditure Update 2023" containing these contents.

Korea's public social welfare expenditures in 2018 and 2019 were 206.8 trillion won (10.9% of GDP) and 235.9 trillion won (12.3%), respectively. This is an increase of 11.5% and 14.1% from the previous year, respectively.

The Ministry of Health and Welfare attributed the increase to the expansion of the use of medical and long-term care services, the increase in public pension recipients, the expansion of basic pensions, the introduction and expansion of child allowances, and the expansion of the National Basic Living Security. It increased by about 27% between 2017 and 2019, but compared to other OECD countries, spending relative to GDP is very low.

France had the highest public social welfare expenditure compared to GDP at 30.7%, followed by Finland (29.4%), Denmark (28.4%), Belgium (28.2%), Italy and Austria (27.7%), and Germany (25.6%).

Korea (12.3%) accounted for the same proportion as Costa Rica, with only Chile (11.7%) and Mexico (7.4%) having a lower proportion than Korea.

The average public social welfare expenditure to GDP in 38 countries where the ratio of public social welfare expenditure to GDP was identified was 20.1%, and Korea spent 61.2% of the OECD average.

The biggest problem with the Korean welfare system is that it does not properly prevent poverty, the most basic function of the welfare system. Cash benefits for the vulnerable are politically less popular than universal social service provision. However, support for the vulnerable is the foundation of the welfare system. A system that is not well-founded is not complete and is bound to be weak.