Ministry of Finance and Economy to Expand Support for Youth in Regional SMEs in 2027: 25% Savings Matching and Up to 10 Years of Tax Reductions

From 2027, various support measures are expected to be implemented to improve the real income and living conditions of young people working in regional SMEs. A wide range of support will be promoted, from savings benefits that help asset formation to cultural life support and earned income tax reductions.

Strengthening Asset Formation Support... New 'Preferential Track for Employees of Regional SMEs' within 'Youth Future Savings Account'

According to a video from the Ministry of Finance and Economy, the government plans to establish a 'Preferential Track for Employees of Regional SMEs' within the 'Youth Future Savings Account' starting in 2027 to support the asset formation of young employees in regional SMEs. The biggest change is the government contribution matching ratio. Unlike the existing SME preferential product, which had a contribution matching ratio of 12%, the newly established regional preferential track is planned to significantly increase this ratio to 25%.

These benefits are designed so that not only new employees but also existing young employees who meet the income requirements can join. To enroll, one must meet income criteria such as a total salary of 36 million won or less and a household median income of 150% or less. The video explained that if the requirements are met, individuals can enjoy additional asset formation benefits of up to 200,000 won per month through the effect of government contributions and other means.

Expanding Cultural Enjoyment and Tax Benefits... Preferential Treatment for Non-Metropolitan Youth

The 'Youth Culture and Arts Pass', which supports the cultural life of young people, will also be reorganized. The support age will be expanded from the existing ages of 19–20 to 19–34, and the benefit, which was provided once in a lifetime, will transition to a method of being provided annually. In particular, to increase accessibility for non-metropolitan youth, the government plans to provide 150,000 won per year in the form of points, which is 50,000 won more than the 100,000 won provided to metropolitan youth. Young people who wish to receive support must apply directly through a designated platform to be announced in the future.

In terms of tax benefits, the earned income tax reduction period will be differentially expanded depending on the region. Previously, 90% of earned income tax was reduced for 5 years regardless of regional classification, but from 2027, the period will be subdivided by region to induce work in regional areas. While the metropolitan area will maintain 5 years, it will increase to 6 years for metropolitan cities and 7 years for other regions, and for core special preferential areas, the reduction period will be extended up to a maximum of 10 years. However, this will be applied within the statutory annual reduction limit.

However, whether the reduction benefit is maintained if one moves from a regional area to the metropolitan area is a matter that requires detailed interpretation of the enforcement decree based on specific circumstances, and it will be guided as soon as it is finalized in the future. The video predicted that if a new employee meets all the policy requirements, they could experience a real income increase effect of approximately 1 million won per month for two years by combining savings contributions, the culture pass, and incentives.