[Exclusive] Focused Review on 'Income Insurance' Including Self-Employed and 'Transition Basic Income'... Democratic Party's 'New Welfare'

Democratic Party Social New Deal Division's 'New Welfare System' Responsibility Tasks

Lee Nak-yeon, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 2nd via video conference and delivering opening remarks. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea is focusing on reviewing 'income insurance' that encompasses self-employed individuals and freelancers, as well as 'transitional basic income' that supports life transition periods requiring lump sums. The party aims to present a 'new welfare' plan within the year to overcome vulnerabilities revealed by the COVID-19 pandemic.

According to the Democratic Party on the 2nd, the Social New Deal Subcommittee of the party's K-New Deal Headquarters, formed earlier last month, has set the 'new welfare system' as one of its key tasks and is exploring various institutional reform alternatives such as basic pensions, national pensions, and (quasi) basic income alternatives.

A representative of the Social New Deal Subcommittee told Asia Economy in a phone interview, "Since vulnerabilities were fully exposed due to COVID-19, we intend to strengthen the social safety net," adding, "We are preparing to complete the broad framework of the new welfare system within the year, and are considering introducing insurance based on income to eliminate blind spots in employment insurance."

Democratic Party leader Lee Nak-yeon also stated at a housing sector field meeting on the 19th of last month, "We will present the new welfare system plan and housing plan within the year."

The government is attempting to expand employment insurance coverage to include special-type workers (teukhyung hyeong geunro jongsaja, or teukgo), but the Democratic Party is seeking a more fundamental systemic change that comprehensively covers all cases with income, including the self-employed. The Justice Party also advocates for the introduction of such 'employment and income insurance.'

The representative said, "The key to income insurance is how accurately income can be identified," and added, "To this end, we are establishing a cooperative system with the National Tax Service to find ways to minimize controversies over fairness."

The intention is to provide benefits even to workers whose distinction between unemployment and employment is unclear. The representative explained, "For example, if a self-employed person or freelancer is in a difficult situation and earns only a few hundred thousand won per month, shouldn't that be considered unemployment? There is a need to provide insurance benefits when income falls below a certain standard."

Within the Democratic Party, there are also calls to change the target of the elderly basic pension, currently set at the lower 70%, to 100%, and to increase the payment amount from 300,000 won to 400,000 won. The long-standing issue of national pension reform is also being discussed at the task force level.

Strengthening support targeted at specific groups is another main focus. The party is reviewing a 'transitional basic income' plan that provides a type of allowance during life transitions such as employment, marriage, and retirement, not only for children and the elderly. This is a form of social allowance and differs from basic income paid regularly to all citizens nationwide.

This was also presented by Professor Yoon Hong-sik of Inha University’s Department of Social Welfare at a seminar held by the Democratic Research Institute, the Democratic Party’s think tank, on the 17th of last month. Hong Ik-pyo, head of the Democratic Research Institute and a member of the National Assembly, said in a phone interview, "The presentation emphasized the need for supplementary measures at specific times requiring lump sums, such as graduating from high school and entering society, the late 20s to early 30s period of independence and marriage, and post-retirement," adding, "This was an expert opinion shared during an evaluation of the existing welfare system, and we plan to hold another seminar with more detailed content in January next year. We will review it openly with various perspectives."

The 'new welfare' system plan has been proactively proposed by leader Lee. He attended the Democratic Research Institute seminar last month and said, "Before the social safety net is expanded, if employment and income become unstable, how do we prevent that? I told Director Hong Ik-pyo that it is time to study the new welfare system with that meaning, and that we need to have some alternatives as soon as possible."

However, the Social New Deal Subcommittee stated, "While various institutional reform alternatives to prepare for the 'age without employment' will be discussed, there will be no announcement within the year at the Social New Deal Subcommittee level."

This content was produced with the assistance of AI translation services.