Court upholds ministry's abolition of extra caregiver payment system in South Korea

A South Korean court has upheld the Ministry of Health and Welfare's controversial decision to eliminate additional payments for exceeding the mandated caregiver-to-resident ratio in elderly care facilities. The ruling dismisses a lawsuit filed by 12 operating corporations of long-term care institutions.

Previously, the ministry revised regulations in December 2024, tightening the caregiver-to-resident ratio from 2.3:1 to 2.1:1, with a grace period until the end of 2024. Simultaneously, the ministry abolished the additional payment system for employing more caregivers than required and reduced the scope of additional payments for other staff like social workers and nurses. This change means facilities must hire more caregivers to meet the new ratio but will not receive extra compensation for any staff hired beyond that requirement.

Operators argued the ministry failed to adequately consult stakeholders, violating procedural fairness, and that the decision infringed upon principles of proportionality, trust, and equality. They claimed the abolition of the system, in place for about 16 years, would hinder service quality improvements and better treatment for caregivers, while the public benefit did not outweigh the private interests harmed.

However, the Seoul Administrative Court ruled that the ministry had sufficiently gathered opinions from stakeholders. The court found the ministry's actions did not constitute an abuse of discretion, stating that while alternative measures like gradually lowering additional payments for other staff were less intrusive, they would incur greater long-term care insurance costs for society. The court concluded that the increased base staffing ratio already addressed some concerns and that the public interest in managing the national budget outweighed the private interests of the institutions.