According to a report by the National Fiscal Research Institute, titled 'Trends and Implications of Welfare Sector Finance,' social welfare spending rose from 33.4 trillion won in 2008 to 165.9 trillion won in 2026, an increase of 132.5 trillion won.
This year, the institute analyzed 344 detailed welfare projects, identifying 14 with budgets exceeding 1 trillion won, which accounted for 90.6% of total spending. This is up from 68.8% in 2008, indicating a steady rise in large-scale projects.
Public pensions represent the largest portion of social welfare expenditures. The amount allocated to public pensions grew from 21.4 trillion won in 2008 to 97 trillion won today, maintaining a high percentage of total budget allocations at around 60% since 2008.
The largest single expenditure among projects over 1 trillion won is the National Pension benefit payments, totaling 54.5 trillion won, followed by civil servant pension payments at 24.9 trillion won and basic pension payments at 23.1 trillion won.
Kim Yong-won, a senior researcher at the National Fiscal Research Institute, noted, "From 2008 to 2026, total spending in the analyzed sectors increased by an average of 9.3% annually, with National Pension benefits rising by 14.5% and basic pensions by 16.0%, reflecting the impact of an aging population."
Medical and livelihood assistance budgets were also significant, at 9.8 trillion won and 9.2 trillion won, respectively, but their average annual growth rates were lower than the overall average of 9.3%.
Despite the focus on income security through public pensions, basic living security, which serves as public assistance, is limited to 22.2 trillion won, with social services at just 10.2 trillion won. These figures indicate that the budget for policies most directly felt by citizens is relatively low.
When compared to other countries, South Korea's public social welfare spending remains low. According to OECD data, South Korea's public social welfare expenditure as a percentage of GDP rose from 6.8% in 2008 to 16.2% in 2022, while the OECD average increased from 18.5% to 20.5% during the same period.
Although the United States has the lowest public social welfare spending among the G7 nations, it is projected to surpass South Korea by 4.5 percentage points in 2024, rising from 16.3% in 2008 to 19.8%.
The findings indicate that while South Korea's social welfare spending has significantly increased, it remains below the levels of advanced nations, with expenditures concentrated in specific areas.
The institute emphasized that while increased spending is necessary for transitioning to a welfare state, the concentration of funds in certain projects suggests that resources are not being allocated effectively. Kim concluded, "Our social welfare finance is still insufficient to be called a welfare state, necessitating detailed discussions and proposals for improvement in related areas."
* This article has been translated by AI.
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