🚨 Standard Median Income

Today Korean Social News for Beginners | 2025.08.01

0️⃣ Welfare Baseline vs Reality Gap, Transparency Issues in Calculation

📌 Criticism Emerges: "Can't Keep Up with Reality" Despite Record-High Increase in Standard Median Income

💬 The Ministry of Health and Welfare confirmed the 2025 standard median income at 6,494,738 won per month for a 4-person household. This represents a 6.51% increase from this year, marking the highest increase rate ever. However, civic groups criticized that it fails to properly reflect actual household income growth rates and inflation rates. Accordingly, the basic livelihood security benefit will increase to 2,078,316 won per month for a 4-person household, and the criteria for 74 welfare programs will be raised together. However, criticism continues regarding the lack of transparency in the median income calculation process and insufficient reflection of reality, leading to ongoing debates about the effectiveness of welfare systems.

💡 Summary

• Standard median income is an income indicator used by the government as criteria for various welfare programs.
• In 2025, it was set at 6.49 million won for a 4-person household, recording the highest increase rate ever at 6.51%.
• Civic groups criticize the low increase compared to actual income growth rates and lack of transparency in the calculation process.

1️⃣ Definition

Standard Median Income refers to an income indicator used by the government as criteria for selecting recipients of various welfare programs. It is calculated based on the income of households positioned exactly in the middle when all households are arranged by income order, and is announced annually by the Ministry of Health and Welfare.

This serves as a key welfare indicator that acts as a baseline for recipient criteria in 74 welfare programs, including the Basic Livelihood Security System, medical benefits, housing benefits, educational benefits, and national scholarships.

💡 Why is it important?

• It is the key baseline that determines citizens' welfare benefit eligibility.
• It serves as the standard for systems directly related to survival rights, such as basic livelihood security benefits.
• It is an important policy tool that influences the scope of social safety nets.
• It is closely related to the scale of national welfare budgets.

2️⃣ Structure and Current Usage Status of Standard Median Income

📕 Median Income Calculation Method and Standards

• It is calculated based on Statistics Korea's Survey of Household Finances and Living Conditions. The main calculation process is as follows:

  • The results of the annual Survey of Household Finances and Living Conditions conducted by Statistics Korea are used as basic data.
  • The basic increase rate is calculated as the average of median income growth rates over the past 3 years.
  • The Central Committee for Livelihood Security comprehensively reviews economic growth rates, inflation rates, etc.
  • Final adjustments are made considering the government's financial conditions and policy directions.
  • The Minister of Health and Welfare announces the standards for the following year by August 1st each year.

• Different standards are applied according to the number of household members. Key features are as follows:

  • Different amounts are set from 1-person households to 6-person households according to the number of household members.
  • The median income amount increases proportionally as the number of household members increases.
  • For 2025, 1-person households are set at 2,306,971 won, and 2-person households at 3,812,301 won.
  • 3-person households are set at 4,914,052 won, and 4-person households at 6,494,738 won.
  • For households with 7 or more members, a certain amount is added to the 6-person household standard for each additional person.

📕 Usage Standards and Scope by Welfare Program

• It is used as recipient criteria in various welfare programs. Main areas of use are as follows:

  • Basic livelihood security benefits target households with 32% or less of median income.
  • Medical benefits target 40% or less of median income, and housing benefits target 47% or less.
  • Educational benefits are provided to households with 50% or less of median income.
  • National Scholarship Type 1 targets up to 350% of median income.
  • Youth monthly rent special support, diaper and formula support, etc., also use median income as criteria.

• It directly affects the scale of recipients and budget. Key current status is as follows:

  • When the standard median income rises, the selection criteria for each benefit also rise together.
  • More citizens can receive welfare benefits, expanding the social safety net.
  • Based on 2025 standards, basic livelihood benefit recipients are estimated at about 1.3 million people.
  • Medical benefit recipients are about 1.5 million, and housing benefit recipients are about 2.6 million.
  • Overall, more than 5 million people receive benefits from the Basic Livelihood Security System.

💡 Major Issues in Standard Median Income Calculation

1. Insufficient Reality Reflection: Gap between actual median income growth rates and government-announced standards
2. Opaque Calculation Process: Unclear adjustment rationale in the final decision process
3. No Regional Differences Reflected: Ignoring cost of living differences between regions with a single national standard
4. Lack of Price Linkage: Insufficient reflection of rapid price increases
5. Political Influence: Room for government financial conditions and political considerations to intervene

3️⃣ 2025 Increase Plan and Social Controversy

✅ Background and Meaning of Record-High Increase Rate

• It recorded a record-high level with a 6.51% increase. Main background factors are as follows:

  • It reflected the increase in household income during the economic recovery process after COVID-19.
  • The high median income growth rates in the Survey of Household Finances and Living Conditions over the past 3 years had an impact.
  • It considered social concerns about rising prices and increased cost of living burdens.
  • It also has symbolic meaning showing the government's policy commitment to stabilizing people's livelihoods.

• Expansion of welfare recipients and benefit increases are expected. Major changes are as follows:

  • Basic livelihood benefits will increase to 2,078,316 won per month for a 4-person household, an increase of 127,000 won.
  • Medical benefits will be raised to 2,597,895 won per month for a 4-person household.
  • Housing benefits will be adjusted to 3,052,527 won per month for a 4-person household.
  • About 100,000 households are estimated to newly become eligible for benefits.
  • The overall welfare budget is expected to increase by about 3 trillion won.

✅ Civil Society Criticism and Improvement Demands

• Criticism continues regarding insufficient reality reflection. Main criticisms are as follows:

  • Claims that it was set lower than the actual median income growth rate in Statistics Korea's Survey of Household Finances and Living Conditions.
  • Criticism that it failed to sufficiently reflect recent rapid inflation rates.
  • Criticism that it didn't properly consider price increases in necessities like housing and food costs.
  • Pointing out the limitations of a single national standard that doesn't reflect regional cost of living differences.

• Transparency in the calculation process is being demanded. Main improvement demands are as follows:

  • The deliberation process of the Central Committee for Livelihood Security should be made public and citizen participation expanded.
  • Clear rationale should be provided for adjustments from basic increase rates to final decisions.
  • Opinions from external experts and civil society should be more actively collected.
  • Regular research and review for system improvement are needed.
  • A system should be established to check appropriateness compared to international standards.

4️⃣ Related Term Explanations

🔎 Survey of Household Finances and Living Conditions

• The Survey of Household Finances and Living Conditions is an official government statistic that identifies citizens' income and asset status.
  • The Survey of Household Finances and Living Conditions is a nationwide sample survey conducted annually by Statistics Korea, comprehensively investigating households' income, expenditure, assets, debts, and welfare levels. It is conducted on about 20,000 households and serves as reference data for understanding the overall status of Korea's household economy.
  • The main survey contents include: First, investigating all income including labor income, business income, property income, and transfer income. Second, identifying living expense expenditure status including food costs, housing costs, and education costs. Third, investigating asset status including real estate, financial assets, and debts. Fourth, checking social insurance and welfare benefit receipt status.
  • Based on these survey results, median income, income distribution indicators, and relative poverty rates are calculated, and it is used as key reference data for determining standard median income. However, it has been criticized for differences from actual reality due to issues like sample representativeness and income under-reporting.

🔎 Basic Livelihood Security System

• The Basic Livelihood Security System is a social security system that guarantees minimum living standards for citizens in difficult circumstances.
  • The Basic Livelihood Security System is a system based on the National Basic Livelihood Security Act that guarantees minimum living standards by providing livelihood, medical, housing, and educational benefits to people in difficult circumstances. It started with the Livelihood Protection Act in 1961 and was reformed into the current system in 2000, serving as the last safety net of Korea's social security system.
  • The system consists of: First, livelihood benefits that support basic food, clothing, and shelter costs. Second, medical benefits that reduce medical expense burdens. Third, housing benefits that support rent or housing improvement costs. Fourth, educational benefits that support children's education costs.
  • Each benefit targets households below a certain percentage of standard median income, with 2025 standards being: livelihood benefits 32%, medical benefits 40%, housing benefits 47%, and educational benefits 50% or less. When standard median income rises, more citizens can receive benefits, expanding the social safety net.

🔎 Central Committee for Livelihood Security

• The Central Committee for Livelihood Security is an organization that deliberates and decides on major matters of the Basic Livelihood Security System.
  • The Central Committee for Livelihood Security is a committee established according to the National Basic Livelihood Security Act that deliberates on core matters of the Basic Livelihood Security System, including determining standard median income, setting benefit criteria, and system operation directions. The Minister of Health and Welfare serves as chairman, with participation from government officials from related ministries and private experts.
  • The committee's main functions include: First, deliberating and deciding on annual standard median income and selection criteria for each benefit. Second, determining benefit payment standards and methods. Third, discussing system improvements and policy directions. Fourth, reviewing the appropriateness of recipient selection and benefit payments.
  • The committee consists of government members and private members, with private members including experts in related fields such as social welfare, economics, and statistics. However, it has been criticized for needing to enhance transparency and democracy due to the deliberation process being conducted privately and limited civil society participation.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can I receive all welfare benefits more easily when standard median income rises?

A: Rising standard median income leads to welfare benefit expansion, but not all systems apply equally.

• When standard median income rises, the income baseline for each welfare system also rises together, allowing more households to become eligible for benefits. For example, with the 2025 livelihood benefit standard rising to 2.07 million won for a 4-person household, households that were previously excluded due to high income can now receive benefits. However, not all welfare systems use standard median income as their criteria. Some systems use separate income standards or also conduct asset investigations.
• Additionally, if the standard median income increase rate is lower than actual income growth rates or inflation rates, the actual benefit expansion effect may be limited. Therefore, individual households need to check the specific criteria of relevant systems to see if they can actually receive benefits.

Q: Why aren't different standards applied by region?

A: Applying a single national standard considers efficiency and equity in system operation, but has limitations in not reflecting regional differences.

• Currently, standard median income is applied as a single national standard for several reasons. First, it can secure efficiency and consistency in system operation. Applying different standards by region would greatly increase administrative complexity and could cause equity disputes between regions. Second, it can maintain the basic principle of guaranteeing minimum living standards at the national level. Third, it can guarantee freedom of regional movement and prevent discrimination based on residence.
• However, there is a realistic problem of large cost of living differences between Seoul and provincial areas. Particularly for housing costs, there is ongoing debate about whether it's appropriate to apply the same standard despite very large regional differences. In the future, there are suggestions to consider regional differentials in some benefits like housing benefits, or to review correction measures that consider regional conditions.