President Lee Jae-myung appears to be pushing welfare policies centered on expanding child allowances, restructuring the pension system, and publicizing caregiving. The goal is to implement a 'basic society' that reinforces income security across the lifecycle in response to declining birth rates and an aging population.
President Lee pledged to expand the recipients of the child allowance, currently set at 100,000 won per month, from under the age of 8 to under the age of 18, and to increase the amount to 200,000 won. He also announced plans to establish a new 'Our Child Independence Fund' that will be jointly funded by the government and parents to help asset formation from childhood.
He stated that the credit card income deduction rates and limits would be increased based on the number of children, child tax credits would be expanded, and the introduction of a French-style 'family coefficient system' would be considered.
Restructuring the pension system is also a key welfare pledge of President Lee. His plan includes redefining the relationship between the national pension and basic pension, transforming retirement pensions into public pensions, and supporting the extension of subscription periods for younger generations, establishing a multi-layered old-age income security system.
The plan includes gradually eliminating the criteria for spousal reductions in the basic pension and relaxing the requirements for housing pension subscriptions to bolster old-age income. There are also plans to expand the basic livelihood guarantee system and the earned income tax credit system to reinforce safety nets for the poor.
Unlike the Yoon Seok-yeol administration, which focused its welfare policies on vulnerable groups, President Lee is envisioning a welfare model that sets universal income security throughout one's life as a national responsibility. He stated, "We will establish a comprehensive income security system from birth to old age." However, there are concerns that the majority of support is focused on cash benefits, which raises fears of long-term fiscal burdens.
According to the National Assembly Budget Office, expanding the child allowance recipients to 18 years old would require an estimated budget of about 35.5 trillion won from 2026 to 2030, averaging over 7 trillion won annually. The Policy Evaluation Research Institute (PERI) estimates that if all pledges, including expanding child allowances, reforming the basic pension, and instituting basic income for agriculture, are implemented, the national debt ratio could reach 202.5% of the gross domestic product (GDP) by 2055.
An economist who requested anonymity noted, "Cash benefits accompanied by new or expanded policies such as child allowances and the independence fund are difficult to reverse once implemented," adding, "If the system design does not consider long-term fiscal burdens, it will ultimately lead to debates over fiscal populism."