President Lee Signals Further Basic Pension Reforms: "How About Giving More to Poor Seniors and Applying Increases on a Sliding Scale?"

"Couples Should Not Be Penalized for Living Together"

"Some Even Fake Divorces to Avoid Reductions"

Government Plans Gradual Reduction of Couple Deduction Starting in 2027

Discussion on Differentiated Increases in Basic Pension Likely

President Lee Jaemyung on March 16 signaled a possible revision of the current "couple reduction" rule in the basic pension system, which reduces pension payments simply because a couple lives together. He also publicly expressed the view that, rather than merely easing the couple reduction, the government should consider distributing future increases in the basic pension more generously to low-income seniors.

Yonhap News

On this day, President Lee shared a related news report on X (formerly Twitter) and stated, "A couple living together should not be penalized. I hear there are even cases of people faking divorce to avoid the basic pension reduction." He added, "Reduced payments are due to a lack of fiscal resources, so it is something that should be corrected as much as possible." President Lee continued, "The basic pension amount is the same for seniors earning several million won per month and those with zero income," and suggested, "It might be an option to maintain the current payments but apply future increases more favorably for those with lower incomes. What do you all think?"

Under the current basic pension system, seniors aged 65 and older in the bottom 70% income bracket are eligible. As of 2026, the maximum monthly payment is 349,700 won for an individual household, and if both spouses receive the pension, each receives a 20% reduction. For 2026, the eligibility threshold is a monthly income of 2.47 million won for an individual or 3.952 million won for a couple.

The government has already formalized the direction of the system's reform. In this year's major work plan, the Ministry of Health and Welfare announced that, following discussions by the Pension Reform Special Committee, it would pursue a phased reduction of the couple reduction in the basic pension starting in 2027 to strengthen income security for seniors. When announcing this year's basic pension eligibility, the Ministry also stated that it would discuss basic pension reforms with the Pension Reform Special Committee, considering both the need to reinforce retirement income and ensure the sustainability of the system.

President Lee's message on this day is seen as both supporting the government's ongoing discussions on reducing the couple reduction and proposing a more refined structure for basic pension payments, shifting from a "universal fixed amount" to "priority support for low-income seniors." In particular, the idea of maintaining existing payment levels but applying future increases differentially is interpreted as a compromise that could minimize resistance to reform while also considering fiscal constraints and distributional effects.

The backdrop for these discussions on basic pension reform remains the severe poverty among the elderly. According to national indicators, the relative poverty rate among those aged 65 and older in Korea was 35.9% in 2024 based on disposable income, and by the Organisation for Economic Co-operation and Development (OECD) comparison standard, Korea's elderly poverty rate is the highest among member countries.

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