A claim has been made that the continued employment of the ‘new elderly’—individuals with strong work motivation and extensive experience—should be promoted in response to an ageing population. To this end, it has been suggested that the retirement age be extended or abolished or that the definition of ‘senior’ be adjusted.
Additionally, calls have been made for the introduction of a ‘family allowance’ that consolidates cash-based financial and tax support. Furthermore, it has been proposed that the recruitment of caregiving personnel, including both foreign nationals and older adults, should be expanded to help address declining birth rates.
The Ministry of Strategy and Finance’s Long-Term Strategy Committee convened a full meeting, and the committee announced a ‘Vision for Future Generations and Long-Term Strategy’ outlining these proposals. Attendees included Commissioner Bahk Jae-wan, head of the Long-Term Strategy Committee, and Vice Minister Bom Kim, among others.
This long-term strategy marks the first such presentation in eight years, following the previous one in March 2017. A Ministry of Strategy and Finance official explained that the strategy was designed to explore opportunities while addressing risks and uncertainties facing future generations. ‘We gathered input from younger generations through surveys and interviews and reflected their aspirations in our policy recommendations to shape the future of Korea,’ the official stated.
During the meeting, the committee emphasised the need for tailored support for the baby boomer generation, which is entering old age in relatively good health and with a strong willingness to work. As of 2023, the first baby boomer generation (born 1955–1963) comprises 7.05 million people, or 13.7% of the total population, while the second baby boomer generation (born 1964–1974) accounts for 9.54 million, or 18.6%.
The committee advised that measures be introduced to facilitate continued employment for the ‘new elderly’, such as extending or abolishing the retirement age and encouraging re-employment after retirement. It also recommended strengthening employment-related services, including job placement and retraining, as well as expanding opportunities for older adults in both social service and private sector roles. Furthermore, the committee highlighted the need for public discourse on adjusting the age classification of ‘seniors’ in light of evolving elderly welfare considerations, suggesting the development of a phased roadmap.
Additionally, the committee stressed the urgency of restructuring the National Pension and health insurance systems in response to the rapid increase in the elderly population, which is driving up social insurance costs. ‘Without expenditure restructuring, the premium rate required to sustain social insurance will rise to an unsustainable level,’ the committee warned, noting that ‘once the National Pension funds are depleted, the contribution rate could reach between 30 and 40%.’
The committee argued that the National Pension contribution rate should be increased but that the burden on generations facing relatively high premiums should be eased. It also emphasised the need for greater efficiency in health insurance expenditure, advocating for a more differentiated self-payment system based on necessity and increased investment in essential medical services and undervalued areas.
To enhance income security for the elderly, the committee suggested providing pension enrolment support for vulnerable individuals and considering the introduction of a ‘partial pension system’, which would allow for partial pension withdrawals before the official retirement age. Additionally, it proposed gradually increasing the guaranteed living expense level from 32% (as of last year) to 35% of the median income, given South Korea’s relatively high elderly poverty rate compared to other OECD countries.
Addressing the issue of low birth rates, the committee observed that ‘although significant support is needed for marriage, childbirth, and childcare, current policies suffer from inefficiencies due to fragmentation and overlap.’
To improve policy impact and provide greater financial flexibility for families, the committee advocated for the creation of a ‘family allowance’ consolidating existing financial and tax-based support schemes. It also called for a comprehensive review of all low birth rate programmes, considering differential payments based on income and family size. In addition, it emphasised the importance of establishing a robust caregiving system by expanding the workforce through the recruitment of both foreign nationals and older adults.
During the meeting, Vice Minister Kim stated, ‘Given the urgency of the issues discussed today, we will actively review feasible initiatives and aim to develop specific policies, with some measures to be announced within the year.’ — ChosunBiz
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