Will asset thresholds for cars and homes for basic benefit recipients be eased···livelihood benefit threshold to 35% of the standard median income - 경향신문

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A conditional recipient under the National Basic Living Security system moves along an alley near Euljiro 4-ga in Jung District, Seoul, to collect discarded cardboard. Photo by Sung Dong-hoon

At a government public hearing, a proposal was presented to relax the asset criteria for vehicles and owner-occupied housing applied when selecting basic livelihood recipients. Another proposal would gradually raise the eligibility threshold for livelihood benefits to 35% of the standard median income by 2030.

On the 28th, the Ministry of Health and Welfare held a public hearing at the President Hotel in Jung District, Seoul, to prepare the ‘4th Comprehensive Basic Livelihood Security Plan (2027~2029)’ and unveiled 16 key tasks by benefit prepared by the Korea Institute for Health and Social Affairs (KIHASA). Under the National Basic Living Security Act, the comprehensive plan is a statutory plan established every three years and sets the direction for operating the system, including eligibility criteria and benefit levels.

The proposal presented by Kim Tae-wan, a senior research fellow at KIHASA, includes measures to adjust income and asset criteria and application procedures to more broadly protect households in need of support. The current National Basic Living Security system determines eligibility by converting not only actual income but also assets such as homes and cars into income at a certain rate. For example, if you own a 5,000,000 KRW car to which a 100% income conversion rate applies, the 5,000,000 KRW vehicle price is counted as income regardless of what you actually earn. As a result, you may be excluded from eligibility simply because you have a car needed for daily life.

To reduce these coverage gaps, Kim proposed simplifying the vehicle asset standard, which has used the same conversion rates set when it was introduced in 2003, to focus on vehicle price. The various income conversion rates that have differed by engine displacement, model year, vehicle type, and household characteristics would be unified into a single rate, while excluding high-priced or luxury vehicles above a certain price from eligibility.

The situation is similar for homes. Because an owner-occupied home is considered an essential asset, a certain amount is deducted, but the portion above that is converted into income. Even when it is difficult to sell the home immediately to cover living costs or to move to a cheaper place, a rise in the home price alone can be calculated as an improvement in circumstances, pushing households away from eligibility. In response, he proposed lowering the rate at which residential property assets are converted into income and, in the mid to long term, considering a policy that exempts a certain portion of the value of the home up to a set limit.

On the 28th, the Ministry of Health and Welfare held a public hearing at the President Hotel in Jung District, Seoul, to prepare the ‘4th Comprehensive Basic Livelihood Security Plan (2027~2029)’ and unveiled 16 key tasks by benefit prepared by the Korea Institute for Health and Social Affairs (KIHASA). Provided by the Ministry of Health and Welfare

Eligibility thresholds will also change. Livelihood benefits are available when income, including the amount converted from assets, is at or below 32% of the standard median income (2,078,316 KRW per month for a four-person household). The plan is to gradually raise this ratio, which has remained unchanged for three years after increasing from 30% in 2024, to 35% by 2030 as set out in the national agenda.

They also proposed phasing out the dependent obligor requirement. Although the government effectively abolished this requirement for livelihood benefits in October 2021, eligibility can still be blocked if a supporting obligor such as a parent or child has annual income of at least 130,000,000 KRW or assets of at least 1,200,000,000 KRW. The sequence would be to relax the rule first for labor-vulnerable groups such as people with severe disabilities, then expand to elderly households and those with significant medical or care needs.

Improvements were also proposed for households that fail to apply for benefits due to lack of information or complex procedures. It would allow the state and local governments to identify beneficiaries in crisis and apply ex officio for livelihood benefits without consent from the individual.

The results of the ‘2024 National Living Conditions Survey’ were also presented at the hearing. Based on this survey, the research team calculated the minimum cost of living for a four-person household consisting of a couple and two elementary school children, and found that, on a metropolitan city basis, 2,534,861 KRW per month is needed. After subtracting costs separately covered by housing and medical benefits, the portion that must be filled by the livelihood benefit is 1,516,655 KRW.

A four-person household with no income receives up to 2,078,316 KRW per month this year in livelihood benefits, which is 561,661 KRW more than that. The research team explained this as the effect of steadily raising the standard median income and the selection criteria. However, the number of poor people who are financially distressed enough to qualify for livelihood or medical benefits yet do not receive support is estimated at 990,000.

The Ministry of Health and Welfare plans to review the opinions gathered at the hearing, revise the draft plan, and finalize it in November after deliberation and resolution by the Central Living Security Committee.