Lee*, 67, collects waste paper and recyclable boxes for a living. In South Korea, the return on one kilogram of used cardboard is less than ten cents, translating into an average daily income $2. A new government scheme aimed at alleviating elderly poverty now makes him eligible to receive up to $190 a month.
After years of negotiation, the resignation of a welfare minister and a broken promise, the government of President Park Geun-hye launched the new Basic Pension scheme on July 25. In line with Park’s electoral promise to financially support senior citizens, this pension gives between $19 – 190 monthly to the majority of over-65s. Though the original plan was to distribute $190 to all senior citizens, in the end it was scrapped by the government for budgetary reasons. Despite backpedaling, this new scheme is a significant improvement in scope and depth in comparison to its predecessor, the Basic Old-Age Pension, which allowed for a maximum handout of $95.
In a country where less than a third have contributed to the National Pension plan, elderly welfare is a pressing issue. It is not uncommon to see elders like Lee in city centers, or working in stores and restaurants; many have to work into their old age in order to make ends meet. The Basic Pension scheme – given to seniors regardless their work history, is considered to be a step forward to combat elderly poverty.
The National Pension Service (NPS) was implemented between the years 1988 and 2003, meaning that a majority of today’s elderly population including Lee did not contribute to it. Today’s elders lived through a period of rapid change in the Korean economy as it rapidly transformed from an agricultural postwar country into the technological powerhouse it is today. During their youth, these seniors may not have held a regular job like their European counterparts might have enjoyed, which would have allowed them to subscribe to the NPS. They may also have not been in the military or in civil service – careers that offer a stable income and an attractive pension after retirement. Or, because of the relative novelty of the Korean NPS, they may not have contributed long enough to benefit from a full pension. The vast majority did not or could not adhere to this system, meaning that they have been left to themselves to save and prepare for their silver years. Without a concrete retirement plan, half of the elderly population finds itself living below the poverty line, relying on their families to get by.
Kim Yoon-young, director of the NGO Korean People’s Solidarity Against Poverty, said in an interview that despite a whole generation of seniors missing out on the National Pension, abject poverty could be avoided if the needy received welfare checks. Although such a system does exist, Kim believes that the way income is calculated for benefit-seekers is unrealistic and misleading.
In Korea, if an elderly citizen is in contact with his immediate family, it is assumed that he receives support from them. A supplementary condition is that the immediate relatives are of working age, do not receive any benefits and are not physically disabled. This assumption is known as the “duty to protect” (bu-yang e-mu-ja).
The concept of duty to protect exists in many countries as a legal basis to enforce alimony and child support payments.
Yet in South Korea, this notion has additional ramifications. For instance, someone with no income who has one close relative (sons and daughters in law included) earning 130 percent of the national living wage, cannot apply for welfare benefits.
“Social services check phone records and not bank records because money can be given in cash. For them, contact indicates revenue,” says Kim.
The system assumes that children financially support their elderly parents in accordance with Confucian culture. The validity of this assumption is increasingly questionable given the rapid modernization of South Korean society.
In 1990, 75 percent of elders lived with their offspring. A decade later, the number was down to 30 percent. It is not only a question of Confucian filial piety towards elders, but also a matter of seniors themselves not wanting to receive pocket money from their children.
Given these dynamics, welfare reform activists are calling for the state to step up and bear the responsibility for taking care of elderly citizens.
“It’s an institution that makes no sense today,” says Kim, adding that it contributes to separating families more than keeping them together.
“This is the biggest hurdle with our welfare system. It should be abolished as soon as possible” she says.
On November 13, the National Human Rights Commission released a report on the rights of the “ineligible poor,” an expression that refers to those with an income lower than the living wage but who are not eligible for benefits. Kim Yoon-young’s charity estimates that one million people – many of whom are over 65 – do not have access to social welfare despite their critically low incomes.
A 2012 parliamentary study states that economic difficulties are the main reason for suicidal thoughts amongst seniors. South Korea’s elderly suicide rate is estimated at 12 persons per day, or four times the OECD average. It is therefore difficult to ignore the role of insufficient support, from families and the government, in the welfare of the elderly.
Whether it be for social changes or economic difficulties due to high costs of education, middle-aged citizens are finding it increasingly hard to support their parents on top of their own kids.
As they do not yet receive any government aid, the pensioners excluded from social welfare, such as Lee, can at least now be eligible for the new Basic Pension. Only the top 30 percent of earners are ineligible and there are no strings attached regarding relatives’ income.
Indeed the government is taking modest steps to phase out the “duty to protect” system in its welfare calculations. Despite opponents arguing that the government handouts should remain limited and the notion of family values respected, mainstream politicians on both sides of the spectrum agree that it is something that needs to be eventually erased.
Dr. Chung Kyung-hee of the Korea Institute of Health and Social Affairs says this system is not necessarily a question of Korean culture, but a question of institutional culture.
“It’s not easy to throw away something that’s been in place for so long. That’s why the change has been slow.” But she insists that the government is phasing out the welfare system, with the new Basic Pension an example of this.
For the seniors who live on benefits, however, this new pension did not change anything.
A few weeks after its implementation, elderly benefit seekers were surprised to find that the amount that was given to them in the new Basic Pension was deducted from their welfare checks. The government added a clarification: the new scheme cannot be cumulated with state benefits.
In fact the new Basic Pension helps middle-class seniors become more independent and is a vital source of income for excluded seniors such as Lee, helping them to make ends meet. But those who have jumped through a myriad of hurdles to be on the social services’ list of benefit seekers are de facto ineligible for this new scheme. An elderly benefit seeker who receives the maximum $470 per month (not including medical or educational discounts) is not able to access the Basic Pension.
For elderly benefit seekers hoping for a little extra (anything between $19-190) for bills, the Basic Pension is a disappointment. For excluded citizens the Basic Pension represents a sigh of relief.
Clearly, $190 is better than nothing, but it is still not enough to cover living expenses. The needy, whether they are already being helped by the state or not, will find it tough to survive in Korea as living costs rise, particularly in the capital Seoul.
Unable to access financial aid, senior citizens with little to no income either pick up cardboard like Lee, or collect metal and tin. Others do the milk rounds on the black market. Only a few are lucky enough to find jobs through NGOs and state-funded initiatives that employ mature candidates. But those jobs are usually targeted at those in their fifties and early sixties, who are seen as being more physically able to hold down a steady job.
In Korea, people in extreme poverty rely instead on charities and NGOs. Religious groups are active in setting up shelters and soup kitchens. This has not been sufficient for some seniors, who have turned to prostitution and petty crime. For Kim, the lack of state-funded elderly welfare programs is particularly disappointing.
“Our elders built the country we live in today. Now we leave them to live in poverty,” she says.
Yena Lee is a postgraduate student in Journalism and International Affairs at Sciences Po/Paris Institute of Political Science.
*Did not want to be identified