South Korea to Keep Basic Pension for 70% of Seniors, Add 30,000 Won for Lowest-Income Recipients

South Korea will keep its basic pension within the lower-income 70% of people aged 65 and older next year, abandoning for now a proposal to link eligibility to median income and gradually reduce coverage.

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The purpose of giving more to the lower-income group is to improve income security for poor seniors, but it is difficult to expect much effect from paying the bottom 30% an additional 30,000 won a month.

Instead, the government will divide recipients into three income groups. The lowest 30%, representing about 3.48 million people, will receive 380,000 won a month, an increase of roughly 30,000 won. Those in the 30% to 45% bracket will receive 359,000 won, reflecting inflation, while payments for the 45% to 70% group will remain at 350,000 won. Because pension payments normally rise with consumer prices, the freeze amounts to a real reduction for the highest-income recipients within the program.

The plan also eases the reduction applied when both spouses receive the pension. For couples in the bottom 45%, the reduction will fall from 20% to 10%. Payments for couples in the lowest income group could rise from 559,520 won this year to as much as 684,000 won next year. Couples in the 30% to 45% group could receive about 86,000 won more. Around 2.34 million people, or 28.8% of the 8.12 million pension recipients, are expected to qualify for the change.

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The basic pension is a system that guarantees a basic floor for older people. If benefits are differentiated among recipients by dividing them into three groups, the system takes on a stronger selective-assistance character.

People receiving occupational pensions, including civil servants’ and military pensions, will also become eligible if they fall within the lowest 45% by recognized income. About 110,000 people are expected to gain access. The program’s budget will rise 11% to 25.7 trillion won, although the government attributes the increase mainly to population aging and inflation.

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Considering the reality that reform cannot move quickly while the national pension has not yet matured sufficiently, this could become a framework that very slowly weakens guarantees for the upper group while developing supplementary payments for the lower group.

The approach has drawn criticism from welfare experts. Oh Geon-ho said an additional 30,000 won would have limited impact on poor seniors. Nam Chan-seop argued that dividing recipients into three payment groups could make a basic income guarantee look more like selective assistance. Another expert, Seok Jae-eun, viewed the plan as a possible first step toward supplementing benefits for poorer seniors while slowly reducing guarantees for higher-income recipients. The government said longer-term eligibility and payment rules require further parliamentary and public discussion.

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We believe it is necessary to change from the current target-recipient-rate system to an income-based system. Long-term eligibility criteria and payment systems require further parliamentary and public discussion.