Ruling Party and Government Consider Lowering or Abolishing Minimum Unemployment Benefits... "No Sweet 'Syrup Benefits'"

Park Dae-chul "Current Unemployment Benefit Minimum Amount Too High"
Sanctions for False Job-Seeking Activities Such as Missing Interviews

The People Power Party and the government have decided to consider lowering or completely eliminating the minimum amount of unemployment benefits. Along with this, they plan to strengthen special inspections to prevent repeated and fraudulent claims.

On the 12th, Park Dae-chul, chairman of the People Power Party's Policy Committee, met with reporters after the "Unemployment Benefits System Improvement" public hearing held at the National Assembly and stated, “(Participants) agreed on the need for motivational measures that would encourage job seekers to engage more actively in job searching, including reducing or abolishing the minimum unemployment benefit amount, and on strengthening related administrative measures to prevent fraudulent claims.”

When asked, “Which option carries more weight, lowering the minimum amount or abolishing it?” Chairman Park replied, “Please understand that we intend to gather more opinions.”

The special committee pointed out the contradictory situation where unemployment benefits exceed the after-tax wages earned from working. Chairman Park noted, “Last year, the after-tax monthly income of minimum wage workers was 1,799,800 KRW, which is less than the minimum monthly unemployment benefit of 1,847,040 KRW.”

He added, “The current unemployment benefits system, with its high minimum amount set at 80% of the minimum wage and overly lenient eligibility criteria, has created a distorted practice of repeatedly taking short-term jobs and claiming unemployment benefits. We agreed that allowing unemployment benefits to be paid if one has worked only 180 days out of the previous 18 months is a cause of the increasing number of benefit recipients.”

According to the special committee, the number of unemployment benefit recipients increased from 1.2 million in 2017 to 1.8 million in 2021. Cases of repeated claims, where benefits are received three or more times over five years, have also been rising since 2018, exceeding 100,000 annually.

The ruling party and government will also strengthen administrative measures to prevent fraudulent claims. Chairman Park said, “We will enhance sanctions against false or formal job-seeking activities such as missing interviews, and intensify special inspections and planned investigations into fraudulent claims involving employer collusion or broker involvement.”

Im Eui-ja, a member of the party’s Labor Reform Special Committee who attended the hearing, said, “There is public criticism that the system favors grasshoppers over ants,” and added, “The Organisation for Economic Co-operation and Development (OECD) has also recommended lowering the minimum amount, noting that South Korea is the only country where recipients of job-seeking benefits experience a decrease in actual income when employed in minimum wage jobs.”

The ruling party and government plan to hold meetings with labor and management groups, academia, and experts to gather opinions before finalizing improvement measures. Chairman Park emphasized, “The ruling party and government will do their best to create a fair unemployment benefits system that favors those who work hard and helps the unemployed find reemployment quickly. We must ensure that unemployment benefits are not abused to the point where they are called ‘Syrup Benefits,’ a term implying a sweet bonus.”

The hearing was attended by Lee Sung-hee, Vice Minister of Employment and Labor, Kim Sung-ho, Director of Employment Policy, Lee Myung-ro, Head of Human Resources Policy at the Korea Federation of SMEs, Professor Park Cheol-sung of Hanyang University, and representatives of small and medium enterprises.

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