South Korea to reform basic pension with tiered payments for seniors

The South Korean government has announced a reform plan for the basic pension system for 2027, focusing on a tiered payment structure known as ‘ha-hu-sang-bak’ (more for the low-income, less for the high-income). While the government decided to maintain the current eligibility threshold of the bottom 70% of seniors aged 65 and older, the amount received will now vary based on income levels.

Under the new plan, seniors in the bottom 30% income bracket will receive 380,000 KRW per month, an increase of 30,000 KRW from the current year. Those in the 30–45% bracket will receive 359,000 KRW, while those in the 45–70% bracket will see their benefits frozen at 350,000 KRW. Additionally, the reduction rate for couples receiving pensions will be lowered from 20% to 10% for those in the bottom 45% income bracket, and approximately 110,000 recipients of occupational pensions (such as civil service or military pensions) within the bottom 45% will now be eligible.

The total budget for the basic pension is set to increase by 11% to 25.7 trillion KRW. However, the reform has faced criticism from various social welfare groups. Some argue the increase for the lowest income bracket is insufficient to significantly alleviate poverty, while others contend that differentiating benefits within the recipient group shifts the system toward selective welfare rather than a guaranteed social safety net.