South Korea's 2027 welfare budget to top W152tr, with revamped child allowances and new medical fund

The Ministry of Health and Welfare announced Friday that its 2027 budget proposal stands at 148.77 trillion won ($109 billion), an 8.2 percent increase from this year's main budget.

When combined with funds allocated separately under the government's Future Response Fund — covering programs such as the child basic allowance and the child-welcoming support grant — the total reaches 152.43 trillion won, up 10.9 percent from this year.

Of the 148.77 trillion won approved at a Cabinet meeting on Tuesday, social welfare accounts for 86.2 percent, or 128.27 trillion won, while healthcare makes up 3.8 percent, or 20.5 trillion won.

The most significant change is a restructuring of the birth and child-rearing allowance system.

The existing first-meeting voucher and parental benefit will be merged into a new "child-welcoming support grant," while the existing child allowance will be consolidated into a new "child basic allowance," with both programs expanded in scale.

Under the Future Response Fund, next year's budget allocates 429.6 billion won for the child-welcoming support grant and 183.5 billion won for the child basic allowance.

The child-welcoming support grant will provide 10 million won for a first child, 12 million won for a second child, and 15 million won for a third child or more. Children living in designated priority regions, determined by a regional preference index, will receive an additional 5 million won.

The grant will be paid in cash in four installments over one year.

The current child allowance of 100,000 to 130,000 won per month will be expanded to a child basic allowance of 200,000 won per month. Children in priority regions will receive 300,000 won per month under the same regional preference principle.

The child basic allowance will be paid half in cash and half in local gift certificates. Families with children aged zero to one who are cared for at home will receive an additional 300,000 won per month.

The revamped child-welcoming support grant and child basic allowance will apply to children born on or after July 1 next year, with children born before that date continuing to receive benefits under the existing system.

The cutoff has drawn equity concerns, as children born just one day apart could receive different levels of support. The ministry said the eligibility criteria "may be subject to further discussion during the National Assembly review process."

Childcare support funding will also be expanded.

The budget includes 36.9 billion won for maternal and child health programs such as fertility testing, 6.7 billion won to cover medical costs for premature and congenitally ill infants, 59.4 billion won to supply diapers and infant formula to low-income families, and 27.9 billion won for gap-filling childcare support for elementary school students during school vacations.

In the health and medical sector, the government will establish a new "Regional and Essential Healthcare Special Account" worth 1.26 trillion won.

The special account will fund 21 regional and essential healthcare support projects in total, including three new programs focused on training and supporting regional doctors and helping localities address gaps in medical access.

The budget for high-risk maternal and newborn care will nearly double, rising from 15.4 billion won this year to 30.7 billion won next year — an increase of 15.3 billion won.

Funding to strengthen national university hospitals — which serve as hubs for comprehensive critical care within the government's "five poles, three specials" regional medical framework — will rise by 139.7 billion won from this year to 255.1 billion won.

The budget to strengthen public hospitals, including regional medical centers, will also increase by 7 billion won to 235 billion won.

Next year's suicide prevention budget will reach 94.7 billion won, up 21.1 billion won from this year. The increase includes 1 billion won to establish a National Suicide Response Center and 1.3 billion won to build an AI-integrated system for the 109 suicide prevention hotline.

Funding to build a support system for managing addiction to narcotics and other substances will increase by 3.7 billion won from this year to 13.4 billion won.

Starting next year, a new pilot program will place dedicated staff at specialized treatment facilities for drug offenders and at addiction management integrated centers following treatment, with 2.2 billion won allocated.

A pilot program to improve the hospital transfer system for psychiatric patients and provide treatment cost support will receive 1.7 billion won.

The standard median income — the baseline used to determine welfare eligibility — will rise by 6.7 percent.

As a result, the budget for basic livelihood benefits will increase by 1.63 trillion won from this year to 10.8 trillion won, while the medical benefits budget will grow by 2.46 trillion won to 12.3 trillion won.

The basic pension budget has been set at 25.65 trillion won, reflecting a restructured tiered system that provides an additional 30,000 won per month to recipients in the bottom 30 percent of the income bracket.

Total basic pension spending will increase by 2.54 trillion won from this year.

The disability pension will be expanded to cover all people with severe disabilities — those previously classified as grades one through three — with the budget rising by 212.3 billion won from this year to 1.12 trillion won.

To support the rollout of community-integrated care, the government will provide 155.8 billion won to local governments, an increase of 64.4 billion won from this year. An additional 6.1 billion won will be newly invested to establish 30 public care centers in depopulating vulnerable areas.

The senior employment budget will increase by 126.2 billion won from this year to 2.49 trillion won, with the number of positions set to expand from about 1.15 million this year to about 1.18 million next year.

The roughly 11,000 public youth jobs in the health and welfare sector will be expanded to 20,000 with an investment of 80.9 billion won.