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Civic groups calling for an improved system of pension and livelihood benefits for impoverished seniors gather around Gyeongbokgung Station near the Blue House in Seoul on Mar. 21 to protest the current “give and take back” pension system. (Baek So-ah, staff photographer)
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Those in lowest income bracket find basic pension system incomprehensible
“We’re the poorest ones. Why don’t they give us a basic pension?” Kim Ho-tae, an 85-year-old resident of a flophouse in the Huam neighborhood of Seoul’s Yongsan district, described the administration’s basic pension policy as “incomprehensible.” Ever since basic pensions were first paid to the lowest-earning 70 percent of seniors over 65 in 2014, he has been traveling to Blue House every July to demand a solution on the matter of the basic pension being “given and then taken back.” As a basic livelihood security recipient, Kim receives 490,000 won (US$435) in livelihood benefits every month. The amount is equal to the minimum livelihood of 501,600 won (US$445.60) for a single-person household (30 percent of the median income) minus his own recognized earnings (estimated value of income plus assets converted into income). He also receives a basic pension of around 200,000 won (US$178) a month – but it makes no difference, since an equivalent amount is subtracted from his next month’s livelihood benefits. The basic pension is included in his recognized income, which makes him ineligible to receive that amount in livelihood benefits. Kim’s livelihood benefits come out to 490,000 won (US$435) a month, regardless of whether he receives the basic pension. To provide income support for low earners, the administration recently made plans to pay a higher basic pension of 300,000 won (US$266) as of next year to the lowest-earning 20 percent of seniors – around 1.5 million people. But the roughly 450,000 of the lowest-earning 20 percent who also receive basic livelihood benefits are left out of the policy. Observers are now voicing concern that the poorest seniors may feel increasingly deprived as the basic pension level rises. If the basic livelihood beneficiaries are excluded from basic pension benefits, their disposable income will ended up falling compared to the majority of seniors receiving the basic pension. Lowest earners receiving smallest basic pension payout Indeed, an examination of basic pension receipts by household in a 2016 National Assembly Budget Office report titled “Basic Pension System Assessment” showed the first decile with the lowest income receiving a smaller basic pension payout than the third decile. In principle, beneficiaries should be receiving a larger basic pension payout the poorer they are – yet the reverse was seen with the lowest earners in the first through third deciles. In contrast, basic pension payments were smaller proceeding up from the fourth through eighth deciles. The report described this as “the result of some basic livelihood security beneficiaries not receiving a basic pension.” In response to the debate over the basic pension being “given and taken back,” the administration maintains that there are no easy solutions, given the “supplementary principle” in public assistance. Since the basic livelihood security system exists to make up the difference when income and assets fail to reach the minimum livelihood level, the principle holds that the basic pension payout should be included as part of income. With the government failing to produce a solution in the four years since the basic pension’s introduction, 99 seniors filed a Constitutional appeal in November of last year, contending that the subtraction of the basic pension was unconstitutional. Their argument is that because the benefits paid through the basic livelihood security system are inadequate to resolve the issue of senior citizen poverty, they should be paid the same amount in benefits from the basic pension as part of a system introduced to guarantee post-retirement income. Over 70 percent of senior basic livelihood recipients are single-person households According to figures from the office of Justice Party lawmaker Yun So-ha, over 70 percent of the 458,176 senior citizens receiving basic livelihood security represent single-person households. The average amount of livelihood benefits received by seniors living alone amounts to 263,965 won (US$234.47) a month. “Most of the seniors receiving benefits live on their own, suffer from ill health, and scrimp and save to get by on their money,” said Kim Ik-hwan, director of the Dongjak Senior Citizen Welfare Center in Seoul. “We have a service called ‘Single Senior Peace of Mind Phone’ to check on people’s safety in real time, and there are people who don’t even turn it on in order to save the 1,000–2,000 won (US$0.89–1.78) in electricity charges,” Kim said. With no progress in the debate over the basic pension’s subtraction, attention is turning to a new proposal from academics, who suggest a portion of basic benefits should be excluded from recognized income for a certain length of time. “If we take into account the failure of the basic livelihood security system to guarantee a humane existence, we may consider something that involves paying 50 percent of the basic pension to senior beneficiaries until their benefit level rises to a certain level within that system,” said Yoon Hong-sik, a professor of social welfare studies at Inha University. By Park Hyun-jung, staff reporter Please direct comments or questions to [english@hani.co.kr]
