Raising the Elderly Age Standard: Differentiated Adjustment Speeds by System [Why&Next]

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As the government is moving forward with discussions on raising the age standard for defining the elderly, academic experts in the field are planning to propose a specific increase to the government in early May.

There is a growing consensus that the age standard for the elderly, currently set at 65 and older, should be raised. This is due to the fact that the healthy life expectancy is increasing, and the costs associated with elderly welfare are rising rapidly as the population ages quickly. The key issues are how quickly and to what extent the age standard should be raised.

Experts believe that the speed and timing of the increase should be differentiated for each system, such as senior citizen privileges, the Basic Pension, the National Pension, and the Long-Term Care Insurance for the Elderly. This is because the practical needs and financial conditions of each system differ.

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According to the Ministry of Health and Welfare and other related ministries on the 29th, academic experts are preparing recommendations to raise the age standard for the elderly, which will be presented at the “Expert Roundtable on the Age Standard for the Elderly” scheduled to be held around May 9 by the Ministry of Health and Welfare. Currently, both the Senior Citizen Privilege standard in the Welfare of the Aged Act and the Basic Pension eligibility are set at 65 and older, so the general perception is that the elderly are those aged 65 and above. The National Pension eligibility is also scheduled to be raised to 65 and older by 2033. International statistics also define the working-age population as those aged 15 to 64. Academic experts are reportedly reaching a consensus that, rather than raising the age standard for the National Pension, Basic Pension, and senior citizen privileges all at once, the increase should be implemented at different speeds, taking into account the unique characteristics of each system.

Experts consider the period from 2035 to 2040, when those born between 1970 and 1975?a relatively large cohort?turn 65, to be a critical turning point. The background for the government’s push to adjust the age standard for the elderly is the concern over a sharp increase in welfare spending for the elderly. Therefore, there is an opinion that the adjustment of the eligibility age should be completed by the time the baby boomer generation retires and begins to receive pensions in earnest. In addition, experts believe that a concrete roadmap for the increase should be established within at least five years, so that citizens can prepare for their future planning.

For the Basic Pension, the focus is on raising the eligibility age from the current 65 to 70 by 2040. Options under consideration include increasing the eligibility age by one year every year from 2035 to reach 70 by 2040, or increasing it by one year every two years starting from 2030. However, experts believe that, since the government needs to reduce the mandatory Basic Pension expenditure and people born in the 1960s and later generally have a certain level of income and assets, the current eligibility criteria (the bottom 70% in income) should be revised so that benefits are concentrated on vulnerable elderly individuals.

For the National Pension, there are discussions about raising the eligibility age to 68 by 2048, which is later than the 2040 target for the Basic Pension. The current eligibility age is 63, but it is already set to be raised to 65 by 2033, so it is considered difficult to raise the age at the same pace as other systems by 2040. The explanation is that, while the overall trend is toward raising the age, some adjustment in the speed is necessary.

In addition, there is talk of raising the age standard for senior citizen privileges, which is defined as “those aged 65 and older” in the Welfare of the Aged Act, from 65 to 70 by a time earlier than 2040. The rapid pace of population aging in Korea means that the proportion of people aged 65 and older surpassed the super-aged society threshold of 20% at the end of 2024, and is projected to reach 25.3% in 2030, 34.3% in 2040, and 40.1% in 2050. As a result, the costs incurred by the government and local governments for senior citizen privilege programs will increase significantly, putting a heavy burden on public finances.

The government also believes that, as experts have suggested, it should apply different timelines for each system, taking into account their unique characteristics, rather than raising the age standard for the elderly uniformly across all systems. If the age standard were fixed uniformly, the number of people eligible for social security programs and social insurance for the elderly would suddenly decrease, potentially excluding vulnerable groups who must receive benefits from the system.

In particular, for the Basic Pension and National Pension, raising the eligibility age could exacerbate the “income crevasse” phenomenon, where a gap in income occurs because the retirement age and the pension eligibility age do not coincide. For this reason, even if a roadmap for raising the age is established, it will be necessary to develop social measures for continued employment, such as reemployment after retirement, in order to make the age increase a reality. If only the pension eligibility age is postponed without providing solutions for elderly employment, it will not only be difficult to reach a social consensus, but could also worsen the problem of elderly poverty. Professor Seok Jae-eun of the Department of Social Welfare at Hallym University said, “Without finding a solution to the income crevasse, it will be difficult to make the age increase a reality,” adding, “The key will be whether social system changes can be achieved, such as extending the retirement age and reforming the wage system.”

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