The government’s promised sweeping reform of the basic pension system has been significantly scaled back, leaving the program largely unchanged from its current form. Older adults walk toward a line for free meals at Tapgol Park in Jongno District, central Seoul, in January 2025.NEWS1
Shin Sung-sik
The author is a welfare specialist reporter at the JoongAng Ilbo.
“How could this happen?”
In February 2006, shortly after taking office as health and welfare minister, Rhyu Si-min reportedly blurted out those words while being briefed on liquefied petroleum gas (LPG) subsidies for vehicles used by people with disabilities. The program consumed 52 percent of the disability budget, yet did nothing for people unable to afford a car or without someone to drive them.
At a senior staff meeting, officials debated abolishing it. Nearly everyone opposed the idea. People around Rhyu warned that taking away an existing benefit was unlikely to succeed, according to his ministerial blog. One participant recalls being surprised that the minister himself proposed abolishment.
The ministry nevertheless moved in unison. Ministers, vice ministers and officials met disability groups more than 10 times to listen and persuade. They proposed redirecting the LPG money toward expanded disability allowances, allowances for children with disabilities and personal assistance services. Officials even held an overnight, two-day debate with leaders of disability organizations.
After that effort, the subsidy was phased out over five years. Few reforms are harder than taking back an existing welfare benefit. The government met stakeholders repeatedly and demonstrated sincerity.
I found myself repeating Rhyu’s words after the government effectively scrapped its basic pension reform plan following six days of confusion. At a Cabinet meeting on Tuesday to finalize next year’s budget, President Lee Jae Myung did not mention the basic pension. The entire plan fit on one page: a nominally progressive benefit structure and eased reductions for married couples.
At a Cabinet meeting in January, Lee questioned why someone earning 2.5 million won ($1,800) a month should receive about 350,000 won in basic pension while the annual fiscal burden rises by trillions of won. He suggested benefits should be more generous at the bottom and thinner at the top.
The basic pension currently pays up to 350,000 won monthly to the bottom 70 percent of older people by income.
It was a surprising directive. During the presidential campaign, Lee had pledged to expand eligibility. Now he was questioning the fiscal burden. Many experts had long criticized a system under which a couple earning 8 million won monthly, assuming no assets, can still qualify.
But Lee’s subsequent instructions created confusion. In March, he wrote on X that existing payments could remain untouched while future increases could be weighted toward lower-income recipients. He repeated that position in a July policy briefing. In effect, he wanted more at the bottom without less at the top.
The Ministry of Health and Welfare drafted a more fundamental reform. It would replace the bottom-70-percent threshold with 80 percent of median income and adjust pension amounts progressively, broadly reflecting expert recommendations.
A press briefing was scheduled for Thursday, suggesting coordination with the presidential office was complete. It was canceled an hour beforehand. Something had clearly gone wrong. The president’s approval rating, which had fallen into the 30 percent range, may have played a role.
The final plan announced Tuesday was anticlimactic. The median income standard disappeared. The progressive structure became largely cosmetic. The bottom 30 percent would receive just 30,000 won more.
Those in the 45th-to-70th income percentiles will continue receiving 350,000 won. Because the benefit will not rise with inflation as usual, they effectively lose about 9,000 won. Calling that a meaningful reduction at the top is difficult.
The ministry’s original proposal was far bolder. It would have cut pensions for roughly 1 million higher-income recipients to 210,000 won, then removed them from eligibility the following year. I worried that taking away so much so quickly might itself prove excessive.
Yet the government, perhaps because it was following presidential instructions, operated in secrecy. Experts were consulted only once. There was no visible committee process, public hearing or serious consultation with older citizens’ groups. A communication support team was formed only recently. A Democratic Party official says the party was not briefed until mid-August.
I do not know enough about Rhyu’s political positions to judge them here. But his method of implementing policy deserves another look.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
