Social in-kind transfers reduce income inequality and poverty

According to data released by the National Data Agency, social in-kind transfers—welfare benefits provided in the form of goods or services rather than cash—averaged 9.26 million won per household in 2024. This amount represents approximately 12.5% of the average household income of 74.27 million won.

These transfers, which include medical expenses through health insurance, free education, and childcare, significantly impact income distribution. When these benefits are factored into income statistics, the Gini coefficient improved from 0.325 to 0.281, and the relative poverty rate dropped from 15.3% to 10.5%. The impact was most pronounced among low-income households; for the bottom 20% of earners, in-kind transfers accounted for 46.8% of their total income.

Sector-wise, medical benefits remain the largest component, accounting for 52.8% of total in-kind transfers at an average of 4.88 million won per household. This is a 3.5% increase from the previous year. In contrast, education and childcare saw declines, with education accounting for 40.7% and childcare for 3.5% of the total transfers.