The Korea Herald


Korea raises minimum household living cost by 3.4 pct

By 김소현

Published : Aug. 28, 2012 - 21:54

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The government said Tuesday it has decided to raise the minimum cost of living for a four-member household by 3.4 percent to 1.55 million won ($1,365) next year in a bid to increase support for low-income earners.

The decision was made during a 12-member committee meeting of the Ministry of Health and Welfare. The amount serves as the legal standard for selecting beneficiaries of welfare programs and determining benefit levels. In 2012, the minimum cost of living was set at 1.49 million won.

The government sets the standard living cost every three years by taking into consideration the latest data on income levels, lifestyles and consumption. For the two years between, the amount is adjusted to reflect inflation only.

The changed standard will go into effect starting on Jan. 1, 2013, the ministry said.

The marking up of living costs for a four-member household with no reported income also affects the maximum amount of cash support that can be given by the government to 1.27 million won per month.

The total reflects actual cash payments only and does not include support given in the form of medicare, education support and other basic welfare subsidies.

The latest tally also showed that for single-person households, the minimum living cost has been set at 572,168 won, with the total going up to 974,231 won for homes with two members. Policymakers also raised living costs for three and five member households to 1.26 million won and 1.83 million won, respectively.

The increase comes amid calls to hike the minimum living cost standard in line with reality as the livelihoods of low-income earners are getting tougher, affected by slowing economic growth.

South Korea's economy, the fourth largest in Asia is expected to grow just 3.3 percent this year down from 3.6 percent in 2011.

Advocates of adjusting living costs stressed that despite overall stabilized inflation, prices of necessities and food items have moved up, which raised concerns that costlier living conditions could negatively affect poor households. (Yonhap News)