Folks line up for lunch at a welfare heart for older adults in Seoul, Aug. 26. Newsis
Twenty % of Korea’s inhabitants is now 65 or older, formally incomes the nation the standing of a „super-aged“ society. By 2070, when as we speak’s 20-year-olds flip 65, the proportion of the older grownup inhabitants to working-age inhabitants (aged 18 to 64) is projected to go up by 100%.
The biggest part of the nation’s welfare system is the essential pension, which is absolutely funded by taxes and supplied to the underside 70 % of revenue earners amongst adults aged 65 and older. In 2025, people incomes lower than 2.28 million received ($1,585) can be eligible for the pension.
Simply as child boomers, with substantial property and incomes, are getting into this demographic, the eligibility threshold has been considerably raised, sparking issues about equity and the fiscal sustainability of the system.
„There are younger individuals incomes lower than the aged receiving primary pensions. Imposing taxes on them to fund the pensions for seniors inevitably raises problems with equity,“ Kim Woo-chang, a KAIST professor who participated within the authorities’s pension reform discussions, mentioned.
„The system needs to be step by step reformed to restrict funds to senior residents dwelling beneath the poverty line.“
On the similar time, the federal government’s necessary expenditures are anticipated to develop from 347.4 trillion received in 2024 to 433.1 trillion received by 2028, with their proportion of whole expenditure rising from 52.9 % to 57.3 %.
Consensus is rising that raising the age threshold is an inevitable step to higher align with the truth that life expectancy for Koreans has been rising.
The Ministry of Well being and Welfare introduced plans to provoke discussions this yr on revising the present older grownup age threshold of 65, following a request from the Korea Senior Residents Affiliation.
If the age for outlining who’s an older grownup is raised, discussions about extending the retirement age and reforming the pension system are prone to achieve momentum.
The Nationwide Meeting Finances Workplace lately estimated that elevating the essential pension eligibility age from the present 65 to 70 might scale back annual fiscal expenditures by about 6.8 trillion received.
Consultants suggest the fiscal financial savings from this alteration needs to be reinvested as a catalyst to facilitate a transition into an „active aging“ society.
„Elevating the age threshold for the aged shouldn’t be considered as a discount in welfare however somewhat as a shift towards a system that extra aligns with the realities of a super-aged society,“ Lee Sang-rim, senior researcher at Seoul Nationwide College’s Inhabitants Coverage Analysis Heart, mentioned. „The monetary financial savings from this course of needs to be directed towards supporting the transition.“
Efforts to deal with the problem have been made a number of occasions, however progress has been lackluster because of the older grownup poverty fee.
In response to the OECD, Korea’s elderly poverty rate is the best amongst its member international locations. The nation is the one one the place the speed surpassed the 40 % stage.
„Discussions on a super-aged society mustn’t focus solely on welfare enlargement,“ Lee mentioned. „Elevating the age for senior residents is tied to challenges that necessitate adjustments to present existence, together with extending the retirement age and implementing reeducation methods.“
