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Park pulling back on welfare pledges
Publication Date : 23-02-2013
South Korea President-elect Park Geun-hye is scaling down some of her costly welfare programmes amid budgetary concerns.
The presidential transition committee on Thursday announced key policy agenda for the incoming government, including pension, health care and poverty relief packages, some of which were substantially reduced after two months of discussion. Other earlier proposed schemes were left out.
Differing from Park’s original plan, the transition team said the next government would differentiate the amounts of cash subsidies for those aged 65 and over based on their income.
Park promised during her presidential campaign late last year that she would increase state benefits for all senior citizens regardless of their income and property.
Park also backed away from another controversial welfare programme initially designed to cover both medical and non-medical expenses for patients suffering from one of four major diseases.
Her officials said the national health insurance programme would cover “necessary medical expenses for patients with the four major diseases by 2016,” and didn’t say a word on non-medical expenses.
Experts said it seemed that Park and her aides had struggled with the plans in the face of reality.
“The (announced) plans show that they were facing problems with securing funds to carry out (welfare programmes). There is no specific plan but much ambiguity and this only showed us they were in a confused state,” said Kim Jin-su, a social welfare professor at Yonsei University.
Other experts said the team must have faced financial challenges as Park promised that there would not be any tax increases for welfare programmes.
According to the finalised plan, however, the incoming administration will provide 200,000 won (US$184) only to senior citizens in the bottom 70 per cent of the income ladder, and those who are not subscribers to the National Pension Service at the same time. The rest, including subscribers to the national pension programme and rich seniors, will get cash ranging from 40,000 won to 100,000 won.
The committee has reportedly considered using some of the funds managed by the National Pension Service, but pulled back the plan after it drew widespread criticism from workers. The state-run pension programme currently has about 20 million subscribers around the country and has accumulated nearly 400 trillion won in funds.
“It is good that the committee decided not touch the NPS fund but (the incoming government) is likely to go through a complex and tough reform process of the national pension system,” said Yun Suk-myung, director of the centre for pension research at the Korea Institute of Health and Social Affairs.
The NPS seems likely to suffer from a large number of subscribers, particularly those low-income earners, dropping out of the programme, Yun said.
“Low-income earners would feel it unnecessary to pay money for the pension programme by NPS when they could get state subsidies for free without pension benefits from NPS,” he said.
Park has been also telling the public that her government will relieve the financial burden of patients who have difficulties in dealing with non-medical services such as paying caregivers and additional costs when they get treatment from doctors of their choice and stay in private wards.
Some experts said the announcement on Thursday represented little progress from the current medical system.
“Currently, the state health insurance covers 90-95 per cent of medical expenses of patients with the four major diseases. Excluding state support to cover non-medical expenses, a major burden for patients, seems meaningless to patients and their families,” said an expert who declined to give his name.