The South Korean government has submitted its budget proposal for the next fiscal year, outlining one of the largest increases on record as a “super budget” centered on a major expansion of child allowances and investment in education and human resources. The plan expands spending on both livelihoods and future investment.
The fiscal proposal for next year sets total spending at 820 trillion won, with an increase of more than 90 trillion won from the previous year aimed at strengthening investment in livelihoods and the future. Key measures include expanded child allowances, the integration of childbirth and childcare benefits, and increased support for education and human resources.
Monthly child allowances are expected to more than double from the current level of around 100,000–130,000 won, while the eligibility age for payments is to be expanded to children under 13 by 2030. The launch of a “My Child Independence Fund” from birth has also been finalized, with a system under consideration to build up a fixed amount alongside government matching contributions.
The government will use a Future Response Fund to strengthen education and human resources. All students at regional national universities will become eligible for full national scholarships, while a proposal is being considered to expand the program to 30 regional universities and ultimately make tuition free. Youth support is also set to be expanded on a large scale.
The Youth Future Savings Fund will have its income cap on contributions removed and eligibility expanded, becoming a three-year maturity product allowing people aged 19–34 to save between 1,000 won and up to 500,000 won per month. The Youth Culture and Arts Pass will be reformed to expand eligibility to age 34 and provide annual support. The related budget is expected to increase substantially.
Under the proposed reform of the basic pension, linkage with the median-income benchmark would be introduced gradually, with the payment structure tilted toward greater support for lower-income recipients and less for higher-income recipients. Concerns have also been raised about a large-scale fiscal expansion for the second consecutive year, with some warning that spending growth could reach double digits.