Gyeonggi Province 'Shaken' by Wave of Central Government Welfare Spending

Gyeonggi Province's finances are being strained as the government implements basic pension and disability pension programs while requiring local governments to shoulder part of the costs.

The province faces financial difficulties, having conducted its first supplementary budget reduction in 15 years last year due to real estate market stagnation.

According to the province on the 19th, the government will implement the basic pension and disability pension in July, and introduce a customized individual welfare benefit system in October.

The basic pension is a program that provides 100,000 to 200,000 won monthly to 70% of seniors aged 65 and older, excluding the top 30% by income.

The disability pension provides 200,000 won monthly to 70% of the lowest income earners among persons with severe disabilities aged 18 and older. The customized individual welfare benefit system provides four types of benefits—living expenses, housing, medical care, and education—that are currently given uniformly to basic livelihood security recipients, now tailored individually to enhance actual benefit levels.

The government is implementing these policies while pursuing a plan to secure 20-30% of business costs through local finances.

With the province having the largest elderly population aged 65 and older (1.2 million) and persons with severe disabilities aged 18 and older (100,000) among the nation's 17 metropolitan local governments, the financial burden is inevitable. The province ranks second to Seoul with 190,000 basic livelihood security recipients.

The province estimates that provincial and municipal expenses required this year for these projects will total 165.3 billion won, accounting for 38% of the province's available resources of 436.3 billion won.

Moreover, the government plans to implement special dementia grades, emergency safety services for severe disability persons, hub-type welfare delivery systems, and youth latent tuberculosis management projects in the second half, expected to further increase the province's burden.

The province conducted a supplementary budget reduction of some 400 billion won in October last year, the first since the 1998 financial crisis, and implemented structural adjustments of 500 billion won in expenditures when compiling this year's regular budget.

The province's fiscal self-reliance rate, which was 60.1% last year, has plummeted to 48.7% this year.

A provincial official stated, "The political circles are taking credit while shifting the burden to local governments," adding, "When implementing ordinances for the Basic Pension Act and others, we will develop measures to reduce local financial burden and propose them to the government and the National Assembly."