"I paid National Pension diligently, but Basic Pension is reduced?"... Contradictions in the 70% selection criteria pointed out

Criticism has been raised that the "bottom 70% income" criterion used to determine eligibility for the Basic Pension conflicts with the fundamental purpose of the system and may disadvantage diligent National Pension contributors. According to a video from "Profitable Welfare Channel," the current Basic Pension system, due to its structure linked with the National Pension, is causing a "pension conflict" where people who have prepared diligently for retirement actually suffer losses in their Basic Pension amount.

'The number 70%' is a result of policy choice, not an absolute standard

Currently, the Basic Pension is paid to the bottom 70% of income earners, but this number is not an absolute poverty line determined from the beginning. The video explained that the Basic Old-Age Pension, the predecessor to the Basic Pension, targeted the bottom 60% of income when it was implemented in 2008, and it was only expanded to 70% in 2009. In particular, during the 2012 presidential election, a pledge was made to pay all seniors aged 65 and older, but the current 70% standard was finalized due to reasons such as the fiscal burden.

The presenter pointed out, "The number 70% is a standard set by the policy decisions of a specific era," and noted, "Because of this single number, there exists a 'bottom 70% income trap' where some people receive the Basic Pension while those who slightly exceed the threshold receive nothing." The argument is that after 17 years, a re-examination is needed to see if this standard is still reasonable considering the changed income and asset structures of the elderly.

The 'paradoxical structure' where diligent National Pension contributors lose out on Basic Pension

The biggest problem is the linked structure between the National Pension and the Basic Pension. During the 2007 National Pension reform, there was a plan to supplement overall retirement income by introducing the Basic Old-Age Pension instead of lowering the income replacement rate of the National Pension. However, as National Pension receipts are reflected in the recognized income amount, it affects eligibility for the Basic Pension, or a "linked reduction" phenomenon occurs where the Basic Pension amount is cut based on the National Pension amount received.

The presenter highlighted the problem by comparing it to a "three-layer retirement income system." Although the structure is intended to have the 1st layer (Basic Pension), 2nd layer (National Pension), and 3rd layer (retirement/individual pension) built up step by step, it is a situation where "because you built up the 2nd layer diligently, the 1st layer decreases." In other words, the analysis suggests a contradictory situation where the state encourages participation and payments to the National Pension, yet those who pay the National Pension diligently face disadvantages in the Basic Pension.

Is it a poverty measure or a basic income guarantee... Need to redefine the purpose of the system

Questions have also been raised regarding the fundamental purpose of the system. The former Basic Old-Age Pension Act defined the target as "seniors experiencing difficulty in living," but in the Basic Pension Act enacted in 2014, the phrase "experiencing difficulty in living" was removed, and the purpose was changed to "providing a stable income base." Accordingly, it is pointed out that a clear definition must precede whether the Basic Pension is a "poverty measure" for the low-income class or a "basic retirement income guarantee" that should be paid to all seniors.

The presenter emphasized, "Before debating how much more to give to whom within the 70%, we must first ask why it is still 70%," and stressed the need for a process to present various alternatives to the public—such as maintaining the current status, linking to the median income, concentrating support on the low-income class, or paying all seniors—and receive their choice. This suggests that the Basic Pension is a social task that must be considered not only by the elderly generation but also by future generations and the middle-aged population.