Analysis of the 2025 Budget for Children and Families

Abstract

Korea’s 2025 budget allocated for ‘children and families’ expenditures, estimated according to OECD and EU standards, totals KRW 20.7 trillion—an increase of KRW 1.3 trillion from 2024. The fact that the children-and-families budget increased by a higher rate than did the budgets for ‘employment,’ ‘social welfare,’ and ‘health,’ can be taken for a positive development, not least in light of current fiscal austerity. However, a closer look at the seven subcategories of ‘children and family’ expenditures, as defined in the national budget and accounting system, reveals the government’s input to be limited. Notably, 78.5 percent of the total program-by-program cuts are concentrated in three areas: child benefits, parental allowance, and home childcare allowance. Meanwhile, of the total budget increase distributed across 33 programs, 62.3 percent goes to ‘maternal and child care support’ and 23.2 percent to ‘infant-and-toddler care support.’ However, since the budget increase for the latter program is attributed in a large measure to a recent increase in the national subsidy rate, the overall increase in the children- and-families budget is primarily driven by the expanded allocation to ‘maternal and child care support,’ funded by the Employment Insurance Fund. This may mean that the 2025 children-and-families budget increase, relying as it does to a significant extent on contributions paid by employees and employers, is more likely than not to benefit families left outside employment insurance coverage. Despite the unfavorable fiscal conditions, the government must take steps to expand support in a way that ensures broader coverage and tangible benefits.