A screengrab shows an online petition decrying the Youth Hope Savings Product on the Cheong Wa Dae homepage.
A bank‘s mobile app features the Youth Hope Savings Product. (Yonhap)
South Korea’s new financial welfare program for the younger generation is designed to disregard the nationality of the recipient. Anyone here who meets the income and age criteria -- Korean or not -- can sign up for a state-backed savings product that pays around 10 percent in yearly interest, tax breaks and saving incentives.
Some call it unfair.
“Why should (the government) give money to foreigners with the tax that we (Koreans) paid,” reads a petition on the homepage of the presidential office. Posted Thursday, it had garnered over 12,000 signatures as of midafternoon Monday. The petitioner, who identified herself as a 34-year-old female office worker, argued it is unfair that foreigners would receive the benefits when many tax-paying Koreans would be disqualified for failing to meet the criteria.
Launched on Jan. 21, the Youth Hope Savings Product is a two-year installment savings plan for those aged 19-34 who earned 36 million won ($29,900) or less in 2020.
Those aged over 34 or without income are not eligible.
Nearly 2 million people have so far applied to open the account, far exceeding the initial government projection of 380,000. President Moon Jae-in has ordered the securing of an extra budget in order to offer the benefits to all eligible applicants.
The scheme has no set guidelines on the nationality of the applicant. Foreign residents here who have stayed in the country for 183 days or more can apply for the account. Like Korean nationals, they also have to meet the same age and income criteria to be eligible.
Eleven banks across the country are offering the product: Kookmin, Shinhan, Hana, Woori, Nonghyup, IBK, Busan, Daegu, Kwangju, Jeonbuk and Jeju.
A local bank official told The Korea Herald that there is no tally as of now as to how many foreigners have applied. Applications remain open until Friday.
Although the Youth Hope Savings Product has been a hit among young Koreans, those denied access have been left with a bitter taste in their mouths.
According to Statistics Korea, an average worker in the country was paid 2.7 million won monthly in 2021, meaning an average salary-earning citizen would be ineligible for the Youth Hope Savings Product.
Another complaint with the program is that it only considers income and not the wealth of the applicant, which means those from wealthy backgrounds can potentially also apply.
The current criteria also make it impossible for those who started work last year to apply, as 2021’s income data is to be finalized in July. The Financial Services Commission is reportedly discussing possibly resuming applications around July or August to address this issue.
By Yoon Min-sik (firstname.lastname@example.org