Means Tests in the South Korean Social Security System

Means Tests in the South Korean Social Security System

Kang, Shinwook

means-test; asset limit; countable income
In this study, we examined means-test criteria, asset limit in particular, of social security programs in Korea. We reviewed eligibility conditions of 170 non-contribution based benefits. The main problems of asset test in Korean Social Security System can be summarized as follow: Most of social benefit based on means test has asset test regardless of its coverage. Most of benefits with asset test use asset-income conversion(countable income) method. The complexity and lack of logical background in calculating countable income is also problem which disturbs easy access to the benefits.

Though it is not easy to say the optimal number of which such programs employing asset limits, we need to question whether it is really necessary that so many social security programs require asset checks. Regarding the way of calculating countable income, the fact that there exists wide variation in the ways these programs convert and assets into income remains a major source of controversy. Poor incentive to reduce debt in calculating countable income should be improved. And the insensitiveness of basic asset deduction level to changes in economic environment need to be fixed.
Ⅰ. Introduction 1
Ⅱ. Application of Means Tests 5
1. Eligibility & Benefit Amount Thresholds 7
2. Structure of Applying Eligibility Thresholds 8
3. Different Means Tests & the Typology of Social Security Programs 11
Ⅲ. Types of Social Security Programs 15
1. Distribution of Programs by Means Testing 17
2. Discussion 26
Ⅳ. Calculating Countable Income & Asset Limits 33
1. Calculating Countable Income for the NBLSP 35
2. Calculating Countable Income for Other Social Security Programs 37
Ⅴ. Major Problems in Applying Means Tests 43
Bibliography 49
보고서 번호
Policy Report 2017-05
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