Gov't proposes raising livelihood benefit threshold to 35% of median income by 2030

The government is considering a plan to gradually raise the eligibility threshold for livelihood benefits — the state support designed to guarantee a minimum standard of living — to 35 percent of the standard median income by 2030.

Kim Tae-wan, a senior research fellow at the Korea Institute for Health and Social Affairs, presented the key proposals Wednesday at a public hearing on the draft 4th Basic Livelihood Security Comprehensive Plan (2027–2029), hosted by the Ministry of Health and Welfare at the President Hotel in Seoul.

The current eligibility threshold for livelihood benefits has been held at 32 percent of the standard median income — defined as the midpoint when all household incomes are ranked in order — a level set in 2024.

Starting next year, the government will change how the standard median income is calculated, applying the average growth rate of the household finance and welfare survey median income over the most recent three years. To offset volatility and time-lag issues in that survey data, the new formula will also incorporate key indicators such as the latest consumer price index and real GDP growth rate.

"The livelihood benefit eligibility threshold should be raised step by step to 35 percent of the standard median income by 2030," Kim said. "After the revised calculation method has been applied for three years, its adequacy should be assessed as part of the Basic Livelihood Security evaluation."

On the family support obligation criteria for livelihood benefits, Kim said the rules were being phased out but had not yet been fully abolished, as income and asset thresholds for households with family support obligations remained in place. "In medical benefits as well, improvements to the family support obligation criteria have been insufficient, and the standards remain strict and complex, leaving a population of poor households outside the system," Kim said.

Kim went on to say the obligation criteria should be eased first for people with severe disabilities and others with limited capacity to work, with further improvements made for elderly households and those with high medical or care needs under both the livelihood and medical benefit programs.

The hearing also raised the need to overhaul the system that converts assets into income when determining benefit eligibility, with participants noting that the current regime fails to reflect contemporary economic conditions and is overly complex.

Kim proposed simplifying the conversion rate for vehicle assets by centering it on the vehicle's market value, while excluding high-value or luxury vehicles above a certain price from benefit eligibility in the interest of public acceptability and fairness.

"The income conversion rate for residential property should be eased, and over the medium to long term, it is worth considering applying deductions up to the recognized ceiling," Kim said. "The financial asset living-preparation deduction, which has been frozen for 10 years, should be raised to reflect current realities."

Kim also called for moving away from the current approach of subdividing and adjusting conversion rates by asset type, toward a system that evaluates income and assets separately.

Additional proposals included converting the medical benefit program into a proactive health coverage system based on individual need, and raising the housing benefit eligibility threshold to 50 percent of the standard median income while also increasing the standard rent and repair cost ceilings.

For education benefits, the plan proposes gradually raising the minimum guarantee level. For self-sufficiency benefits, it calls for improving effectiveness through a tailored support system. The plan also proposes redefining the non-recipient poor as households earning below 50 percent of the standard median income, up from the current 40 percent threshold.

The Ministry of Health and Welfare said it would review the opinions submitted at Wednesday's hearing and bring the 4th Basic Livelihood Security Comprehensive Plan to a vote at the Central Livelihood Security Committee next month.