The government and the ruling party are considering increasing South Korea’s welfare budget by about 10 percent to around 120 trillion won ($117 billion) next year from 106 trillion won this year.
The Saenuri Party’s policy planning committee and the Ministry of Strategy and Finance said Wednesday the welfare budget is expected to account for over 30 percent of the total expenditure for the first time.
This would also mark the first time for the country to seek a double-digit percentage increase in welfare spending since 2009 in the aftermath of the global financial crisis.
The government is considering increasing its total spending by 5 percent to some 373.6 trillion won next year.
The increase is due to the government’s expanded legal obligations to raise funding for programs such as the basic pension for the elderly and four basic social insurance benefits ― health, pension, employment and industrial accident coverage.
“The low income group and senior citizens are facing difficulties making ends meet as the economy is growing at its slowest pace (in years). To share the burden, we are considering the measure to increase the welfare budget by more than 10 percent to 118-120 trillion won,” a Saenuri Party official said.
The ruling Saenuri Party and the Ministry of Finance plan to come up with a budget plan this week that focuses on stabilizing the livelihoods of the people in line with efforts to improve the economy.
“A specific figure has not been decided yet. It will be announced next week after negotiating with the ruling party this week,” a government official familiar with the issue said.
Given that the government and the ruling party are mulling an average 5 percent increase for the total expenditure next year, the welfare budget hike is more likely to double the average rate of increase.
“The budget will reduce the burden of major living expenses including education, housing and medical costs, and strengthen the social safety net by boosting spending on health, welfare and job creation, which could contribute to an economic recovery,” another government official said.
The expenditure on the basic pension for the elderly is expected to be raised to 7.7 trillion won next year from 5.2 trillion won this year.
The national pensions for soldiers, teachers and civil servants will be expanded to 40.3 trillion won from 36.4 trillion won in the same period.
The government is also looking to implement a scheme enabling low-income households to purchase energy supplies such as gas, kerosene oil and coal with vouchers or coupons for the first time next year.
The elderly, disabled people and children from that income bracket will receive such benefits, government officials said.
The government will raise the pay for soldiers by 15 percent and provide free flu vaccinations for those over 65, and hepatitis A vaccines for children.
It added that more spending will be allocated to support students paying university tuition, and help supply about 3,000 rental houses for college students.
By Park Han-na (email@example.com)