As the news has spread that foreigners are entitled to open ‘Youth Hope Installment Savings,’ which offer a special annual interest rate of up to 10 percent, a growing number of young Koreans are expressing discontent, with some posting complaints on the presidential office’s website. While young Koreans in their 20s and 30s who cannot prove their income are not allowed to open the special savings account, giving the special benefit to foreigners is unjustifiable at best, those critics say.
According to financial industry sources on Sunday, a total of 1.9 million people have opened the Youth Hope Installment Savings account for five days since Feb. 21 when the savings program was launched. The total number of applicants at all banks will likely reach an estimated 2 million. This number is more than five times the original estimate (380,000) by the government.
As applications for the savings have surged, there is growing criticism against the government that has failed to predict demand accurately, while controversy continues to mount over the fairness of the policy. Only people aged 19 to 34 who earned 36 million won (26 million won in net income) or less last year are entitled to open a Youth Hope Installment Savings account.
Thus, jobseekers who have no income and those who landed job for the first time last year and thus cannot prove their income are not entitled to open the account. On the contrary, foreigners who earn taxable income while residing in Korea for 183 days or longer are allowed to open the account if they meet relevant requirements.
In this light, some young Koreans have urged the government to “expand the scope of beneficiaries to other Korean citizens in lieu of foreigners,” while others question “Does the government have taxpayers’ money sufficient to support even foreigners?” Someone indeed posted a critical comment on the policy granting more preferential benefit to foreigners on the presidential office’s website on Thursday. “Does Korea have to lavishly give away money to foreign youth with my taxpayers’ money. Youth who actually paid taxes are not allowed to get the support,” said the person who identified himself as a 34-year-old office worker. The comment earned consent from 10,600 web users as of Sunday.
“Most foreigners are permitted to open most savings plans granting tax exemption under the ‘law on restrictions to special tax benefit,’ including the special housing purchase deposit for youth,” a government official said. The government is considering a plan to give a chance for youth who landed their first job last year to open the Youth Hope Installment Savings account from July.