South Korea Shifts Employment Insurance to Income-Based Criteria

South Korea is set to revise its employment insurance eligibility criteria next year, shifting the focus from weekly working hours to monthly income.

Starting in 2025, individuals must earn at least 800,000 won (approximately $570 USD) per month to qualify for employment insurance, a change from the current requirement of working 15 hours or more per week. The Ministry of Employment and Labor stated this adjustment aligns with the existing 800,000 won monthly income threshold for gig workers and reflects the average monthly income of new employment insurance subscribers working around 15 hours weekly.

A significant new measure will be the introduction of an income aggregation system. This will enable workers employed at multiple companies to combine their earnings from each job. Even if individual monthly salaries fall below the 800,000 won threshold, workers can apply for employment insurance if their total monthly income reaches the required amount. The ministry anticipates this will bolster the social safety net for vulnerable groups, including low-income and part-time workers.

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Employment insurance based on income is the first step toward 'employment insurance for all citizens,' signifying the state's responsibility for everyone who works.

Furthermore, the system for collecting employment insurance premiums will be revamped. The current annual total income declaration by employers will be abolished, replaced by a monthly income declaration submitted to the Employment Insurance Service Center. Alternatively, income data reported to the National Tax Service can be used. This change aims to streamline the process and ensure more accurate, timely reporting.

Minister of Employment and Labor, Kim Young-hoon, emphasized that this reform is a crucial step towards achieving "employment insurance for all citizens," signifying the government's commitment to covering all working individuals. The ministry plans to continue expanding the scope of coverage, including for gig workers, and adapting the eligibility criteria based on inflation, wage growth, and the need to broaden coverage.

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We will resolve blind spots for low-income and short-time workers and continue to expand the scope of application for gig workers.