🚨 Basic Income Pilot Program

Today Korean Social News for Beginners | 2025.10.16

0️⃣ Monthly 150,000 Won for Rural Depopulated Areas and Budget Burden Controversy

📌 Rural Areas in Jeollanam-do and Jeollabuk-do Face Dilemma: "Worried Whether Selected or Not"

💬 The competition has intensified as 14 counties in Jeollanam-do and 7 counties in Jeollabuk-do applied for the government's rural basic income pilot program. This program aims to provide 150,000 won per month in local gift certificates to residents in depopulated areas without income or asset requirements, focusing on revitalizing local economies and stabilizing residents' lives. However, local governments with weak finances are feeling a heavy burden due to the funding structure of 40% national budget and 60% local budget. Some counties gave up applying due to budget concerns, and even if selected, they face the situation of having to cut existing welfare and cultural budgets. On the other hand, if they fail to be selected, they will disappoint residents' expectations, putting local governments in a difficult position. Local governments are demanding that the national funding ratio be increased to over 60% and the pilot areas be expanded, calling for a transition to a nationally-responsible program.

💡 Summary

• The basic income pilot program is an experimental system that provides 150,000 won per month unconditionally to residents in depopulated areas.
• While 49 counties nationwide applied, the financial burden is significant due to the 40% national and 60% local funding split.
• There is a dilemma: if selected, existing budget cuts are inevitable; if rejected, residents' expectations are disappointed.

1️⃣ Definition

Basic Income Pilot Program means a system that regularly provides a fixed amount of money to residents of a certain area without income or asset requirements, experimentally verifying the effects on local economic revitalization and social safety nets. Particularly, rural basic income aims to restore communities and stabilize residents' lives in rural areas facing population decline and regional extinction crises.

This program will select 6 county-level local governments designated as depopulated areas and provide 150,000 won per month per resident in the form of local gift certificates for 2 years starting in 2026. By providing it as local currency, the intention is to promote consumption within the region and maximize economic circulation effects.

💡 Why is this important?

• It is attracting attention as a survival strategy for rural areas facing population decline and regional extinction crises.
• It is the first national-level experiment to empirically verify how unconditional cash payments affect local economies and residents' lives.
• The debate over the funding structure and policy effectiveness will have an important impact on the direction of future welfare policies.
• It raises fundamental questions about the reality of local finances and central government responsibility.

2️⃣ Program Content and Current Status

📕 Basic Program Design

• Target areas and beneficiaries are clearly defined. The main details are as follows:

  • Six out of 69 counties nationwide designated as depopulated areas will be finally selected.
  • All residents who have lived in the area for 6 months or more will be eligible.
  • It is characterized by universal provision without income or asset requirements.
  • After a 2-year pilot operation starting in 2026, the effects will be evaluated to decide whether to expand.

• Payment method and usage scope are limited. The main features are as follows:

  • 150,000 won per person per month will be provided in the form of local gift certificates.
  • They can only be used within the region to encourage local economic circulation.
  • Use is restricted at large supermarkets and online shopping malls, mainly used at local small business stores.
  • Cash conversion is impossible, designed to lead to consumption rather than speculation or savings.

📕 Problems with the Funding Structure

• The ratio of national and local budget burden is the core of the controversy. The main status is as follows:

  • Total project cost consists of 40% national budget and 60% local budget.
  • Among local budget, provincial and county budgets are divided in certain ratios.
  • Most counties in Jeollanam-do and Jeollabuk-do have very weak fiscal independence rates below 10%.
  • One county is estimated to need over 10 billion won in additional annual budget.

• The financial burden on local governments is realistically difficult to bear. The main problems are as follows:

  • Existing welfare, culture, and education budgets must be drastically reduced.
  • Some counties have given up or hesitated to apply at all.
  • Even if selected, they worry about resident backlash when the program ends after 2 years.
  • If they fail, residents' disappointment and dissatisfaction are expected to be significant.

💡 Major Issues of the Basic Income Pilot Program

1. Funding burden structure: 40% national funding is difficult for local governments to handle, requiring increased national funding ratio
2. Reduction of existing welfare: The contradiction of having to reduce existing welfare budgets for new programs
3. Program sustainability: Issues of managing resident expectations and policy continuity when discontinued after 2 years
4. Fairness of selection: Controversy over loss and unfairness for other regions as only 6 places are selected
5. Lack of effect verification: Insufficient verification of effectiveness before large-scale budget input

3️⃣ Expected Effects and Concerns

✅ Positive Expected Effects

• Local economic revitalization effects are expected. The main effects are as follows:

  • The additional income of 150,000 won per month will directly connect to consumption within the region.
  • Small businesses and traditional markets will be revitalized through the use of local gift certificates.
  • Consumption that was flowing outward will circulate within the region.
  • It can bring vitality to stagnant rural economies.

• Resident life stabilization and community recovery are possible. The main changes are as follows:

  • Minimum living standards of rural residents with weak income bases will be guaranteed.
  • Welfare blind spots can be eliminated through unconditional payment.
  • Economic stability can increase regional settlement rates.
  • Community consciousness and attachment to the region are expected to strengthen.

✅ Realistic Concerns and Challenges

• Questions about fiscal sustainability are raised. The main problems are as follows:

  • Securing funds to continue operating after the 2-year pilot program is uncertain.
  • If central government budget support decreases, it is impossible for local governments alone.
  • Significant backlash is expected if the program is discontinued after residents become accustomed to basic income.
  • There is criticism that starting without a long-term funding plan is irresponsible.

• Policy effectiveness verification is insufficient. The main concerns are as follows:

  • It is uncertain whether basic income can actually prevent population decline and revive local economies.
  • There is a possibility of only temporary consumption promotion effects.
  • There are limits without fundamental job creation or infrastructure improvement.
  • Issues of overlap with existing welfare systems and fairness have not been sufficiently reviewed.

4️⃣ Related Terms Explained

🔎 Depopulated Areas

• Depopulated areas are legally designated regions at risk of extinction.
  • Depopulated areas refer to regions designated by the government considering population outflow rates, aging ratios, living infrastructure levels, etc., in accordance with the Special Act on Local Autonomy and Decentralization and Balanced Regional Development. Currently, 69 counties nationwide are classified as depopulated areas.
  • Main designation criteria include: first, evaluating whether the population has continuously decreased over the past 30 years. Second, confirming whether the elderly population rate over 65 exceeds 20%. Third, reviewing whether the working-age population (15-64 years) ratio is decreasing. Fourth, comprehensively judging whether living infrastructure such as medical care, education, and culture is poor.
  • When designated as a depopulated area, special financial support and policy preferences can be received from the government. This basic income pilot program is also being promoted as part of such regional support policies. However, designation alone does not solve fundamental problems, requiring effective follow-up measures.

🔎 Local Gift Certificates

• Local gift certificates are local currency that can only be used in a specific area.
  • Local gift certificates are gift certificates that can only be used at small business merchants within the area, a type of local currency issued by local governments to revitalize local economies. They are issued in various forms such as card type, mobile type, and paper type.
  • Main features include: first, use is restricted at large supermarkets, department stores, and online shopping malls. Second, they can only be used at traditional markets and small business stores within the region, reviving neighborhood commerce. Third, incentives such as discount benefits or point accumulation may be provided. Fourth, they are designed to lead to consumption rather than cash conversion or exchange, which is impossible.
  • Local gift certificates have the effect of preventing consumption outflow and promoting economic circulation within the region. However, there are also criticisms about inconvenience due to usage restrictions, fee burdens on small business owners, and not fitting the online commerce era. In this basic income pilot program, the intention is to maximize local economic revitalization effects through this.

🔎 Fiscal Independence Rate

• Fiscal independence rate is a key indicator showing the fiscal soundness of local governments.
  • Fiscal independence rate refers to the proportion of funds (local taxes + non-tax revenue) that a local government can procure on its own among its total budget. The higher this ratio, the lower the dependence on the central government and the higher the autonomy of fiscal operations.
  • The calculation method is (local taxes + non-tax revenue) ÷ general account budget size × 100. For example, if the total budget is 100 billion won and own revenue is 10 billion won, the fiscal independence rate is 10%. Many counties in Jeollanam-do and Jeollabuk-do have fiscal independence rates below 10%, meaning they must receive over 90% of their budget from the central government and province.
  • Local governments with low fiscal independence rates find it difficult to pursue their own projects and have no choice but to rely heavily on central government or metropolitan government policies. This is precisely why the 60% local budget burden is problematic in this basic income pilot program. In a situation with little own revenue, to secure massive additional budget, they fall into a dilemma of having to drastically reduce existing projects or rely on borrowing.

5️⃣ Frequently Asked Questions (FAQ)

Q: If selected for the basic income pilot program, will all residents receive 150,000 won per month?

A: Residents who have lived in the area for 6 months or more will all receive it regardless of income or assets.

• The core principle of basic income is 'universality'. That is, regardless of whether income is high or low, whether they have assets or not, anyone who has lived in the area for a certain period will equally receive 150,000 won per month in local gift certificates. First, they must have resident registration in the area for 6 months or more. Second, there is no age restriction, so all generations from infants to the elderly are eligible. Third, it is provided regardless of existing welfare benefit status. Fourth, foreigners or short-term residents are likely to be excluded.
• This is a major difference from existing welfare systems. Existing welfare selectively provides to vulnerable groups by examining income and assets, but basic income provides to all residents without discrimination. The goal is to eliminate welfare blind spots and promote economic stability for all residents without stigma effects.

Q: Will basic income continue to be paid after the 2-year pilot program?

A: It will be decided after evaluating effects after 2 years, but sustainability is uncertain due to financial burden.

• The current plan is to evaluate policy effects after a 2-year pilot operation starting in 2026 to decide whether to expand. However, many questions are raised about sustainability. First, while 40% national funding is provided during the pilot period, it is uncertain whether the same ratio will be supported afterward. Second, the financial burden is too large for local governments to sustain with only their own budget. Third, even if policy effects are proven, massive budget is needed for nationwide expansion. Fourth, it may vary depending on the central government's policy direction or fiscal conditions.
• The most worrying scenario is when the program is suddenly discontinued after residents have become accustomed to receiving basic income for 2 years. This will cause great disappointment and backlash from residents, and local governments will face politically difficult situations. Therefore, there are many criticisms that long-term funding plans and exit strategies must be clarified before starting the pilot program.

Q: Why is there a demand to increase the national funding ratio?

A: Because with the current 40% national burden, project implementation is virtually impossible given local governments' fiscal conditions.

• The current funding structure is designed as 40% national budget and 60% local budget (provincial budget + county budget). However, most counties designated as depopulated areas have very weak fiscal independence rates below 10%. First, in one county's case, over 10 billion won per year is needed for the basic income program, which is several times the county's own revenue. Second, to secure 60% local budget, existing welfare, culture, and education budgets must be drastically cut. Third, this creates a contradictory situation of sacrificing existing resident services for new programs. Fourth, as a result, the poorer the finances of a region, the more difficult it becomes to participate in the program, making the policy purpose meaningless.
• Local governments argue that the national funding ratio should be raised to at least 60% or more, and furthermore, it should be converted to a nationally-responsible program. The logic is that since population decline and regional extinction are national challenges, the central government should bear more financial responsibility. There are also demands to expand the pilot areas from 6 places so that more regions can benefit.

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