The Change in the Cash Benefit System for Families with Infants according to the Introduction of Parental Benefits in Korea

Abstract

· Since the beginning of 2002, the total fertility rate (TFR) in South Korea has fallen below 1.3. The phenomenon of lowest-low fertility, defined as TFR below 1.3, persists. · In the past, the expansion of childcare services was at the center of the childcare policy agenda’s response to low fertility, but recently, cash benefits and income support policies for families with children have become a critical policy agenda. · The new government announced the introduction of parental benefits, which are a payment of one million KRW per month to children aged 0 years from 2024. · To reduce the burden of childbirth and childcare by raising the level of support for infancy and to compensate for lost income, parental benefits were introduced. · It is necessary to identify the context of changes in the rapidly expanding cash benefit system and to clarify the institutional characteristics of parental benefits in the context of changes in the cash benefit system. · The first cash benefit for families with children in South Korea is the child home care allowance. · The child allowance was introduced to strengthen state responsibility for childcare. · The infant allowance was introduced as part of an intensive investment policy for infancy.8 It was intended to strengthen parents' right to free choice. Parents who receive an infant allowance can choose between childcare services and child home care. · With the exception of child allowances, cash benefits for families with children were developed in relation to the universal free-childcare system. · Cash benefits for families with children were divided into the child allowance and child home care allowance until 2021. · In 2022, with the introduction of the infant allowance, the cash benefit system was divided by age. The existing cash benefit system is implemented in the same way from the age of 2, but children under the age of 2 receive an infant allowance. · As parental benefits are paid to children under the age of 2 from 2023, families with infants under the age of 2 will no longer receive infant allowances, but parental benefits. · The institutional characteristics of parental benefits should be specified. · A legal basis should be established considering institutional coherence. · It is necessary to prepare countermeasures to consider the adverse ripple effect of parental benefits.