S. Korea to hand out cash rewards for birth and additional childcare subsidies

2020.12.15 14:16:14 | 2020.12.15 15:34:07

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The South Korean government will reward childbirth with 2 million won ($1,826) and pay 300,000 won monthly until the child becomes 1 from 2022 in latest measure to aid the country’s stubbornly low birth rate.

Under the 4th Basic Plan for Low Fertility and Aging Society established by the Presidential Committee on Aging Society and Population Policy on Tuesday, the government will expand financial awards for childbirth and monthly subsidies for child care.

Hong Nam-ki, deputy prime minister for economy, said the government plans to spend 196 trillion won through 2025 to promote births.

“We are at a critical point on the demographic front. Working population thins by 230,000 this year to 37.36 million and another 230,000 next year,” he wrote on his Facebook. “If we don’t start now, we could face a population cliff.”

The first-year subsidy is on top of the 100,000 won monthly allowance given to all children aged 7 and younger. The yearlong monthly check would be 300,000 won in 2020 and gradually go up to 500,000 won by 2025.

The plan – released by the Ministry of Health and Welfare – will serve as the basis of carrying out population-related policies from 2021 to 2025.

The government will dole out immediate cash gift of 2 million won for a birth from 2022.

The voucher limit for expectant mothers will stretch to 1 million won from current 600,000 won, which means a mother will be compensated with 3 million won for having a child and giving birth.

The move is latest desperate measures to promote birth in the country heading towards demographic cliff. The country has one of the lowest fertility rates in the world - 0.92 as of last year.

Couples also would get 3 million won in monthly coverage during their three-month parental leave.

Small and mid-size enterprises that keep returnees for one or more year after employees come back from parental leave will be given 15 to 30 percent tax credit benefits, up from 5 to 10 percent. SMEs will also receive 2 million won in monthly funds for three months with employees on parental leave.

The government will work to ensure paid parental leave for self-employed, freelancers, platform workers, and artists.

Under the plan, the government will also expand benefits families with three or more children. The government will supply 27,500 rental houses exclusively for multi-child families by 2025 and grant a priority pass to multi-child families of the rental houses if they wish to move to larger housing area. It will also amend the definition of multi-child families from those with three or more children to two or more. The third child in a low-income family will receive full tuition scholarships from the government.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]