Seoul short on funds for basic pension

By Claire Lee
  • Published : Aug 12, 2014 - 21:30
  • Updated : Aug 12, 2014 - 21:30
Almost a month after Korean seniors received their first payout under the new basic pension program in July, some district municipalities in Seoul announced on Tuesday that they may not be able to give out payments starting next month due to budget deficits.

The Seoul district offices demanded that the central government finance the needed budget for the revised program, which is one of the key pledges of the Park Geun-hye administration.

The municipalities are currently 60.7 billion won ($59 million) short of the 145.86 billion won needed for the program this year.

Without the central government’s support, some municipalities, including Seongdong-gu and Geumcheon-gu, may not be able to give out payments starting in September, according to Jung Hyo-sung, Seoul’s deputy mayor for administrative affairs.

There are a total of 25 municipal offices in Seoul.

In early July, prior to the first payout on July 25, Seoul’s municipal offices announced that they had only secured 63 percent of the required budget for this year.

The Seoul Metropolitan Government is currently 115.4 billion won short of the required budget for all of its welfare programs, which includes the 60.7 billion won needed for basic pension.

Aside from basic pension, the city is 46.1 billion won short of the needed budget for its free day care program for children aged 5 and under, and in need of an additional 8.6 billion won for a vaccination program against pneumonia.

Among the welfare programs, the revised basic pension requires the largest amount of funds and the lack of support from the central government puts the city’s already-precarious financial situation at higher risk, Seoul officials said.

The revised program is to benefit the poorest 70 percent of Koreans aged 65 and older by giving them a monthly allowance ranging from 100,000 won to 200,000 won, depending on their income level.

The previous program, on the other hand, only paid a monthly benefit of 97,000 won to seniors in the lower 70 percent income bracket.

“The budget deficit for basic pension is affecting other welfare programs, such as free child care,” said Kim Eui-seung, the director-general of administrative affairs for Seoul Metropolitan Government.

“We are making this request (to the central government) in a desperate effort to continue our welfare programs for seniors and children.”

By Claire Lee (