South Korea to announce basic pension reform by early September

South Korean Minister of Health and Welfare Chung Ho-young announced plans to unveil a revised basic pension system by late August or early September. The proposed reform aims to adopt a "less for the rich, more for the poor" structure, prioritizing benefits for lower-income elderly households.

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We are discussing various scenarios for the basic pension reform within the government. We plan to announce the reform by late August or early September.

Currently, the basic pension, implemented in 2014, provides a flat rate of 349,700 won per month to 70% of elderly individuals aged 65 and above, based on their income level. While household adjustments exist, the principle has been a uniform payment for those within the bottom 70% income bracket, regardless of their exact income.

Minister Chung indicated that discussions are underway within the government, exploring various scenarios for the reform. She explained that amending the Basic Pension Act would be necessary, requiring parliamentary consensus and legal review. The Ministry of Health and Welfare's work report also highlighted the goal of strengthening income support for low-income seniors through this revised structure, targeting implementation next year.

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To reform the basic pension, we need to amend the Basic Pension Act. We must gather opinions in parliament and undergo legal review.

Chung clarified that the principle of providing pensions to the bottom 70% would be maintained. However, within this group, the distribution would be adjusted to favor those with lower incomes. Additionally, the government is reviewing improvements to the spousal reduction system and the non-payment of pensions for certain occupational pensions alongside the basic pension reform.

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We will maintain the principle of providing pensions to the bottom 70% income bracket, and design it to allow for a 'less for the rich, more for the poor' distribution within that range.