DistantNews
Support us
🇰🇷 South Korea /Economy & Trade

South Korea plans to cut monthly unemployment benefits by about 200,000 won while extending payment periods

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Official statement New plan
  • South Korea’s Employment Insurance Committee approved a plan to reduce monthly unemployment benefits by about 200,000 won while extending eligibility periods.
  • The change would calculate benefits over six days rather than seven, addressing cases in which benefits exceed the take-home pay of minimum-wage workers.
  • The government also plans a separate employment and family-support account from 2028, funded by higher worker and employer contributions and 900 billion won in government support.

South Korea plans to reduce monthly unemployment benefits by about 200,000 won for some recipients, while extending the period over which they can receive payments. The changes could begin next year if the government secures the necessary legal amendments.

The Employment and Labor Ministry said its Employment Insurance Committee had approved the reform package. The main change would replace the current seven-day calculation with a six-day calculation, excluding the unpaid weekly holiday commonly associated with Saturdays.

The ministry said the existing system, introduced when 44-hour workweeks were common, had produced an income reversal. Because unemployment benefits are calculated over seven days and do not face taxes or social insurance deductions, some recipients receive more in take-home income than minimum-wage workers.

Unemployment benefits were designed in 1995, when 44-hour workweeks were common.

— South Korea’s Employment and Labor MinistryThe ministry explained why it wants to change the weekly calculation used for benefits.

For a recipient who receives benefits for 150 days, the monthly maximum would fall from 2.04 million won to 1.81 million won. The lower payment level in the example would drop from 1.98 million won to 1.76 million won. The payment period would increase from five months to about 5.8 months, leaving the total amount unchanged in that case. Those eligible for the maximum 270-day period would receive benefits for about a month and a half longer. Some 1.72 million people received unemployment benefits last year.

The government also plans to change the maximum daily benefit from a fixed 68,000 won to 103% of the lower benefit level, which is set at 80% of the minimum wage. From 2028, a separate account will finance maternity and parental-leave benefits. Workers and employers would each raise their employment-insurance contribution from 0.9% to 1%, while the government would provide 900 billion won. The Korean Confederation of Trade Unions said government support for parental protection should be larger.

Maternity protection benefits are 100% the responsibility of the state.

— Hong Seok-hwanThe Korean Confederation of Trade Unions official criticized the planned division of funding for maternity and parental-leave benefits.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

More Stories

From Our Blog