'Incentives and Tax Deductions' Youth-Only Savings and Funds Launched... Employment Incentive Support of '9.6 Million KRW per Person'

Government Announces 'Youth Special Measures'... "Mitigating Polarization and Securing Growth Engines"

[Sejong=Asia Economy Reporter Moon Chaeseok] The government will provide up to 9.6 million KRW annually as a 'Job Leap Incentive' to small and medium-sized enterprises (SMEs) that hire young people. Alongside this, a policy supporting asset formation by dividing youth income into three tiers will be implemented. The goal is to resolve youth polarization through early employment market entry and asset accumulation, thereby strengthening the nation's growth engine.

On the 26th, the government announced this 'Special Youth Measures' at the Youth Policy Coordination Committee chaired by Prime Minister Kim Boo-kyum, jointly prepared by related ministries.

Asset Formation Programs by Three Income Tiers

Customized asset formation policies by income level and mental health support projects to reduce the number of discouraged job seekers, such as those experiencing disappointment and unemployment, will be implemented.

The asset support policies are divided into income brackets of up to 24 million KRW, up to 36 million KRW, and up to 50 million KRW annually. The 'Youth Tomorrow Savings Account' policy for youth earning up to 24 million KRW annually is designed so that if they save 100,000 KRW per month, they can receive up to 14.4 million KRW after three years.

For those earning up to 36 million KRW, the 'Youth Hope Savings' policy will be implemented. This is a two-year maturity product with a savings incentive of up to 4%, allowing recipients to receive '12 million KRW + 360,000 KRW (savings incentive) + market interest' at maturity. The 'Youth Income Deduction Long-term Fund' for those earning up to 50 million KRW annually offers an income deduction of up to 40% of the contribution amount. The expected return after three years is '18 million KRW + 7.2 million KRW (income deduction amount) + fund returns.'

The youth expanded unemployment rate (perceived unemployment rate), which includes part-time workers, job seekers, and public service exam takers not counted in the official unemployment rate, was 22.7% as of last month. Currently, one in four youths falls into this category, and if job-seeking activities are not active, the future national growth engine could falter. Therefore, the government will implement the 'Mental Health Voucher' policy, providing psychological counseling services worth 200,000 KRW per month for three months to 15,000 young people.

Job Leap Incentive Provided to 140,000 Youth

From the second half of the year, vocational training will be strengthened and private sector jobs increased. Additionally, to boost youth hiring in SMEs, the government will provide up to 9.6 million KRW annually as a 'Job Leap Incentive.' Previously, the government has offered cash-like wage support to match young job seekers with SMEs facing recruitment difficulties, and a similar approach is being taken this time.

However, within next month, a task force (TF) will be formed within the government to build a 'public-private cooperation model' to increase jobs in institutions where youth want to work, such as large corporations, financial institutions, and public enterprises. Youth will be intensively trained in high-income promising sectors such as Information Technology (IT), Artificial Intelligence (AI), digital, green, and bio industries. To this end, related ministries including the Ministry of Economy and Finance, Ministry of Education, and Ministry of Science and ICT will cooperate to expand talent development programs based on a 'company-led, government-supported' approach.

Other measures include ▲expanding the number of youth recipients of the National Employment Support System's job-seeking promotion allowance by 20,000 (from 150,000 to 170,000) ▲employment increase tax credits (5 million to 13 million KRW per youth hired).

Social Reintegration Preparation Fund of 10 Million KRW per Military Personnel

A social reintegration preparation fund policy will also be implemented for military personnel who face relatively difficult employment market entry. The government will match contributions so that up to 10 million KRW can be accumulated upon discharge. Government support will provide up to 2.5 million KRW per person. Additionally, annual self-development expenses of 120,000 KRW and support for 50% of online course fees (to be expanded to 80% next year) will be provided.

Furthermore, to revitalize youth entrepreneurship, a 'three major package policy' will be implemented. At the start of entrepreneurship, youth-exclusive loan funds will be provided. After starting a business, youth-exclusive savings and long-term funds will help increase profits.

The government stated that any supplementary measures identified during the detailed planning process will be reflected in next year's youth policy implementation plan and then pursued.

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