Starting in 2027, the “couple reduction” in the basic pension will be gradually reduced, with a priority given to low-income households.

The current government is considering reducing the deduction rate for elderly couples receiving the Basic Pension from 20% to 10%, starting in 2027. This move aims to improve the quality of life for vulnerable elderly couples. As reported to the National Assembly’s Health and Welfare Committee, the Ministry of Health and Welfare plans to gradually lower this rate, with a target to reduce it to 15% by 2027 and further to 10% by 2030, focusing on the lower 40% income bracket. Simultaneously, a bill is being discussed to completely abolish this deduction by 2028, after reducing it to 10% in 2026 and 5% in 2027. President Lee Jae-myung has emphasized the urgency of this reform to quickly reduce the burden on these couples. The existing deduction mechanism assumes a ‘economy of scale’ when couples live together, sharing living expenses and reducing costs compared to single elderly households. However, critics argue it has made life more difficult for economically vulnerable elderly couples. Reports indicate that such low-income elderly couples have monthly expenditures 1.74 times that of single elderly households, higher than the assumed 1.6 times. The government recognizes these challenges and the additional financial burden of reform, with estimates suggesting it could cost an average of 3.3 trillion won annually until 2030 to phase out the deduction.