The Struggles of Low-Income Seniors: The 'Give and Take' of Basic Pensions

Recent revelations highlight a critical issue affecting over 670,000 seniors in South Korea, who, while eligible for basic pensions, 

Recent revelations highlight a critical issue affecting over 670,000 seniors in South Korea, who, while eligible for basic pensions, find themselves unable to benefit from these funds due to reductions in their living allowances. This blog explores the complexities of the current pension system and the urgent need for reform.

According to data obtained from the Ministry of Health and Welfare by Rep. Kim Seon-min (Justice Innovation Party), more than 670,000 elderly individuals are receiving basic pensions as part of the national basic livelihood protection program. However, an alarming 99.9% of these pension recipients—67,4639 seniors—have had their living allowances reduced as a direct consequence of receiving these pensions.

The average monthly reduction in these living allowances is approximately 324,993 won, nearly equivalent to 97.1% of the maximum monthly pension amount of 334,810 won for this year. This situation arises from specific principles outlined in the National Basic Living Security Act, such as the 'principle of supplementation' and the 'priority of other benefits.' Under these rules, receiving a basic pension increases the recognized income level, which subsequently leads to a reduction in the living allowance.

This means that many low-income seniors effectively do not experience the benefits of the basic pension. Critics have referred to this phenomenon as a 'give and take' system, where the government provides aid but then retracts it through cuts in other benefits.

In light of these concerns, the government announced on September 4 that it plans to revise its pension policies. Specifically, it intends to allow seniors over 65 who are part of the lowest income bracket to receive basic pensions without having their living allowances reduced. Currently, other types of benefits, such as disability pensions and child allowances, are excluded from income calculations, and advocates argue that the basic pension should also be treated in the same manner.

Rep. Kim emphasized the ongoing concerns surrounding the basic pension system, stating, “There have been continuous calls for change regarding the 'give and take' of the basic pension, and we will work hard to address these issues in the upcoming pension reform.”

The basic pension is adjusted annually based on inflation rates, and this year, the maximum amount is set at 334,814 won per individual for those living alone. The ongoing situation calls for immediate attention to ensure that our elderly population can genuinely benefit from the support intended for them.

The current basic pension system for low-income seniors needs urgent reform to address the unintended consequences that leave many in financial distress. Policymakers must prioritize solutions that ensure these individuals receive the support they need without punitive reductions to their living allowances. Ensuring that the most vulnerable members of society are genuinely supported is essential for fostering a more equitable and compassionate social safety net.