Starting next year, the employment insurance premium rate will rise from the current 1.8% to 2.0%. The method of paying unemployment benefits will also change to cover only six days a week, excluding unpaid holidays.
The Ministry of Employment and Labor discussed these changes in a meeting of the Employment Insurance Committee on September 1. The proposal is based on 16 discussions held by a task force established in November last year, which included labor and management representatives as well as experts.
Beginning next year, the insurance premium rates for workers and employers in the unemployment benefit account will each increase by 0.1 percentage points, raising the overall premium rate to 2.0%.
This increase is intended to bolster the finances of the employment insurance fund, which have been strained by rising expenditures for maternity protection benefits. Spending on maternity protection benefits more than doubled from 2.1 trillion won in 2022 to 4.3 trillion won last year. The unemployment benefit account recorded a deficit of 1.8 trillion won last year. Although the reserve stands at 1.8 trillion won, considering the 7.7 trillion won borrowed from the Public Fund Management Fund, the actual reserve shows a deficit of 6 trillion won.
The government will also increase its financial contributions. The transfer from the general account will rise from 600 billion won this year to 900 billion won next year, a 50% increase, with plans for gradual increases until 2029.
In 2028, a new account tentatively named the 'Work-Family Balance Account' will be established to separate expenditures for maternity protection benefits, such as parental leave benefits, from the unemployment benefit account. However, considering that employers are obligated to pay for benefits related to maternity leave, these will be moved to the Employment Stability and Vocational Development Account. The specific premium rates and government contributions for the new account will be determined after further discussions based on trends in maternity protection expenditures.
The method of paying unemployment benefits will also be revised for the first time in 22 years since the introduction of the five-day workweek in 2004. Currently, benefits are paid for seven days a week, including unpaid holidays, but in the future, they will only cover six days, excluding unpaid holidays.
While the monthly payment amount will decrease, the total payout and total number of payment days will remain the same. Based on next year's minimum wage, the monthly payment is expected to range from 1.76 million won to 1.81 million won. For those receiving unemployment benefits for 150 days, the actual duration of benefits will extend to approximately 5 to 5.8 months.
A ministry official stated, "Currently, workers earning at the minimum wage level are receiving more in unemployment benefits than their after-tax monthly wages. We aim to normalize the monthly payment to about 80% of the minimum wage while not reducing the total benefit amount."
To prevent the recurring issue of the upper and lower limits being reversed, the upper limit for unemployment benefits, which was previously set as a fixed amount, will now be linked to 103% of the lower limit. The criteria for excluding early re-employment allowances will also be lowered from a monthly income of 5.74 million won to 3 million won after re-employment. This change addresses concerns that high-income earners, who are likely to find re-employment quickly, were still receiving benefits.
The scope of employment insurance coverage will also be expanded. Starting in January, the coverage for four job categories, including insurance agents, after-school instructors, and delivery drivers who also install furniture, will be aligned with the scope of industrial accident insurance.
From 2028, the government plans to expand employment insurance to cover all individuals with reported income from the National Tax Service. The aim is to include all personal service income earners, but those whose employment status is difficult to define, such as multi-level marketers or YouTubers, may be excluded from this coverage.
Minister of Employment and Labor Kim Young-hoon stated, "By establishing the Work-Family Balance Account, we will clarify the state's responsibilities and create a solid financial foundation through joint contributions from labor, management, and the government. We will promptly implement the necessary follow-up measures based on the discussions."
* This article has been translated by AI.
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