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Pension Benefits for Families with more than Two Children

Pension Benefits for Families with more than Two Children

Posted March. 18, 2005 23:06,   


As early as next year, the old-age pension currently paid out to the poorest people over 65 or low income people over 71 will be expanded to low income people over 65.

Also, a “childbirth credit system” will be adopted, where families with more than two children will receive higher pension benefits later, in an effort to boost birth rates.

On March 18, Kim Geun-tae, Minister of Health and Welfare, reported to President Roh Moo-hyun the pension plans in the annual policy report.

Under the plan, senior citizens in the low income bracket, who earn less than 65 percent of the average workers’ income (543,000 won a month per person) and own less than 54.25 million won, will be eligible for benefits of 35,000 to 50,000 won per month in pension.

Currently, only those aged over 65 who belong to the lowest income bracket (monthly income of 350,000 or less per person) or people aged over 71 who belong to the low income bracket are eligible for the pension. The pension plan will be expanded, and an additional 208,000 senior citizens will be able to apply for the pension.

When the childbirth credit system is adopted, parents who have a second baby and parents who have a third baby will be regarded as if they paid 12 months and 18 months of pensions, respectively. For example, if a person with 1.45 million won in monthly wages has a second baby, the person will get 240,000 won more a month in pension benefits after the age of 60 years. However, only one parent is eligible for the additional benefit even though both parents has subscribed for the pension. The childbirth credit system will be applied to those who have a second baby after the national pension revision passes the Assembly.

“With the incident last year in which a five-year-old boy was found dead in a cabinet at his home after suffering from malnutrition, the government plans to enact a special law on emergency benefits under which the government will provide emergency livelihood subsidies and medical fees to the needy before it starts fact-finding research,” said the minister.

However, as the Ministry of Health and Welfare said that it did not have a negotiation with relevant government agencies on how to finance the plan, a bumpy road may still remain ahead in order to actually materialize the plan.

Meanwhile, regarding the report, President Roh suggested “to review a scheme in which welfare workers and health advisors visit nursing homes to create programs for maintaining health and for physical activities, and that those who design the administrative capital adopt health-friendly construction structures to help reduce diabetes and obesity.”

Hee-Kyung Kim susanna@donga.com