South Korea to Double Rural Basic-Income Pilot Areas and Give Freelancers Childcare Benefits

South Korea will expand its rural basic-income pilot to 35 counties next year, up from 17, covering about half of the country’s 69 declining-population counties. Residents will receive 150,000 won a month in local shopping vouchers.

The central government will also raise its share of the program’s cost from 40% to 50%. As a result, each metropolitan and basic local government will contribute 25%, down from 30%. The budget for the pilot will increase from 234.1 billion won this year to 1.1658 trillion won next year.

The budget also creates a childcare allowance for people who cannot take parental leave because they lack employment insurance coverage. One-person business owners, workers in special employment arrangements, and freelancers will receive 500,000 won a month for three months, for a total of 1.5 million won. The government has allocated 9.3 billion won for the program.

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Reducing K-shaped polarization is more urgent than ever, so that the difficulties faced by young people, small business owners, and other vulnerable groups in the shadow of growth can be overcome.

Small business owners who close their shops or hire replacement workers to undergo national health screenings will be eligible for a health-care support payment of up to 100,000 won per person. The government has budgeted 205 billion won for that program and will newly subsidize 20% of industrial accident and health insurance premiums for certain labor providers.

The government will also supply 600 billion won in annual low-interest loans to lower-credit borrowers, with the public and private sectors sharing the funding equally. Eligible borrowers can receive up to 1 million won at an annual interest rate of 4.5%, with a 10-year maturity. The standard median income used for welfare eligibility will rise 6.7%, while spending on the four main benefits will increase to 27.1 trillion won from 22.4 trillion won. A support obligation rule will be abolished for severely disabled people receiving livelihood and medical benefits. Still, welfare advocates said health, welfare, and employment spending, at 289 trillion won, would rise 9.3%, below the 12.8% increase in total spending.

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There was a mega-project for creating new growth engines, but no such project is visible in the social safety net.