A Study on the Beneficial Equity of the Income Protection System for the Disabled

Abstract

Income security system for the disabled in Korea faces the new stage this year with the introduction of Disability Pension Act; the system divides into Disability Pension, non-contributing pension, and Invalidity Pension of National Pension Scheme, which is social pension. In addition, there is Permanent Disability Benefit of Workers Compensation Insurance, which applies to the disability due to work injury. Disability Pension Act improves the income security system for the disabled by providing pension to the disabled people who live slightly above the poverty line, but was excluded in the National Basic Income Security scheme since it does not consider the disability in selecting the beneficiary. It is also expected that Disability Pension contribute to building up the income security system by providing the basic disability pension to the disabled who is not covered by National Pension due to inborn disability or not satisfying the conditions of the scheme. Although it resolves the gaps in coverage in National Basic Livelihood scheme and National Pension scheme in some degree, Non-contributing Disability Pension has a problem of not being clearly distinguished from National Pension, which is social pension scheme. In addition, it is difficult to consider Disability Pension as minimum guaranteed pension although it allows the overlaps with Invalidity Pension of National Pension. Therefore, there should be clarification between disability benefit schemes considering the characteristics of each scheme, otherwise, there would be increase of income disparity among the disabled and decline of redistribution. This study aims to examine the raised the issues related to current income security system for the disabled. It tries to suggest the desirable direction for restructuring the income security system for the disabled through the case studies of multi-pillar income security system for the disabled in other countries. The study also presents the suggestions to improve system by examining the current status of Disability Pension and Invalidity Pension of National Pension, exploring the ways for effective role sharing between the schemes with financial analysis and analyzing the effect of each suggestion.