Welfare in South Korea forms a relatively new and small part of government spending in South Korea, having grown rapidly during the 1990s.
Contents
1990–2007
National health insurance was introduced in South Korea in 1977. By 1989 South Korea had universal health coverage. Other social insurance programmes in South Korea include the Industrial Accident Compensation Insurance (IACI, South Korea's first social insurance program dating to 1964), Employment Insurance (EI, dating to 1995).
The recent trend in South Korea is to increase welfare spending: between 1990 and 2007 South Korean government expenditure on welfare increased at an 11% annual rate in real terms, which was the fastest rate of increase in the Organisation for Economic Co-operation and Development (OECD) area. Social expenditure in the years 1990–2001 rose from 4.25% to 8.7% (with a peak at 10.9% in 1998).
2007–present
Spending of welfare in South Korea formed 7.6% of GDP in 2007, (the OECD average was 19%). The primary social welfare programme in South Korea is the Basic Livelihood Security Programme (BLSP), which covers 3% of the country's population (about a fifth of the 15% of South Koreans living in relative poverty). Another program, the National Basic Livelihood Security System (NBLSS) was introduced in 2001. Benefits for families in 2011 were equivalent to 0.5% of the South Korean GDP, the lowest in the OECD (OECD's average was 2.2%).
Welfare for the elderly amounts to 1.6% of GDP as of 2007 (a quarter of the OECD average). Pensions in South Korea are administered by the National Pension Service (NPS), introduced in 1988. Kim reported that in 2002, only 6.5% of the South Koreans over the age of 60 lived on public pensions. About one-fifth of the elderly receive pensions, which is a major factor contributing to the fact that nearly a half of the South Korean elderly live in relative poverty, which is the highest proportion among OECD countries.
A quarter of welfare spending from the government, in forms of cash payments, goes to the poorest 20% of the population, which is contributing to the growing inequality in the South Korean population. The South Korean tax and welfare system is the least effective in reducing inequality among all of OECD countries.