🚨 Parental Leave Allowance

Today Korean Social News for Beginners | 2026.01.24

0️⃣ Rising Maternity Protection Costs and Employment Insurance Crisis

📌 Parental Leave Allowance Surge Shakes Employment Insurance...Serious Discussion on Separating Maternity Protection Funding

💬 Maternity protection spending, including maternity leave and parental leave allowances, is growing rapidly and putting increasing pressure on employment insurance finances. According to the labor-management-government employment insurance task force, maternity protection spending is expected to reach 7.7 trillion won by 2035, with total spending over the next 10 years reaching 62 trillion won. Meanwhile, the unemployment benefit account is expected to turn negative next year, with accumulated shortfalls reaching 29 trillion won by 2035. Labor and management have agreed to separate maternity protection programs from the employment insurance fund and transfer them to the government's general account. This reflects concerns that the employment safety net function, the original purpose of unemployment benefits, may weaken, along with awareness of the need to address coverage gaps for freelancers and self-employed workers. However, the Ministry of Planning and Budget maintains a cautious position due to financial burden concerns.

💡 Summary

• Maternity protection spending including parental leave allowances is surging and pressuring employment insurance finances.
• Labor and management agreed to transfer maternity protection programs to the government's general account.
• The unemployment benefit account reserve is being depleted, and coverage gap issues are also being raised.

1️⃣ Definition

Parental leave allowance is an income support benefit paid by the government while workers take parental leave for a certain period to raise their children. It targets workers enrolled in employment insurance and aims to ease financial instability from wage loss during leave and support work-life balance.

Currently, workers with children aged 8 or under or in elementary school grade 2 or below can take parental leave for up to one year, receiving a percentage of their regular wages as an allowance during this period. Workers can apply if they have 180 days or more of employment insurance coverage, and both parents can use it separately.

💡 Why is this important?

• It's used as a key policy tool to address low birth rates.
• It reduces career interruptions for women and supports work-life balance.
• However, rapidly rising costs threaten employment insurance financial sustainability.
• Equity issues exist as benefit accessibility varies by employment type.

2️⃣ Current Status and Problems of Parental Leave Allowance

📕 Surge in Maternity Protection Spending and Financial Pressure

• Maternity protection spending is growing rapidly. Key points include:

  • Maternity protection spending is expected to reach 7.7 trillion won by 2035.
  • Total spending over the next 10 years is projected at 62 trillion won.
  • This includes not only parental leave allowances but also maternity leave benefits and reduced working hours allowances during childcare.
  • Support levels continue to expand as policies to address low birth rates strengthen.

• The unemployment benefit account faces a serious financial crisis. Key problems include:

  • The unemployment benefit account reserve is expected to turn negative starting next year.
  • Accumulated shortfalls are projected to reach 29 trillion won by 2035.
  • Financial pressure is growing as increased maternity protection spending combines with rising unemployment from economic instability.
  • Concerns are raised that the employment safety net function, the original purpose of employment insurance, may weaken.

📕 Structural Limitations of the Employment Insurance System

• Maternity protection and unemployment benefits use the same funding source. Key issues include:

  • Employment insurance was designed to respond to unemployment risk, but welfare functions have recently expanded.
  • The structure pays maternity protection benefits from insurance premiums jointly paid by workers and employers.
  • Childbirth and childcare are different social risks from unemployment, but are funded from the same source.
  • The need to separate funding between programs is growing to ensure financial sustainability.

• Coverage gap problems are serious. Key points include:

  • Freelancers and self-employed workers are not eligible for employment insurance, so they can't receive parental leave benefits.
  • Small and medium enterprise workers often find it difficult to use leave due to negative company attitudes.
  • Non-regular workers find it hard to apply for parental leave due to job insecurity.
  • Benefits are concentrated among large companies and public sector workers, causing ongoing equity debates.

💡 Main Problems with Parental Leave Allowance

1. Financial sustainability: Crisis of unemployment benefit account reserve depletion from surging maternity protection spending
2. Mixed systems: Structure where unemployment risk and childbirth/childcare risks are managed from the same funding source
3. Coverage gaps: Limited accessibility for freelancers, self-employed, small business workers, etc.
4. Equity: Benefit access clearly divided by employment type
5. Government burden: Concerns about increased national financial burden if transferred to general account

3️⃣ Funding Separation and System Improvement Plans

✅ Transferring Maternity Protection Programs to General Account

• Labor and management agreed on funding separation. Key directions include:

  • Separate maternity protection programs from the employment insurance fund and transfer to the government's general account.
  • Restore the employment safety net role, the original function of the unemployment benefit account.
  • Strengthen the universal support nature of maternity protection by using tax revenue as funding.
  • Secure employment insurance financial stability and system sustainability.

• There are advantages and challenges to general account transfer. Key points include:

  • Advantages: Financial responsibility becomes clear and the nature as universal welfare strengthens.
  • Advantages: A foundation is established to expand support to all citizens regardless of employment type.
  • Challenges: National financial burden increases, so the Ministry of Planning and Budget maintains a cautious position.
  • Challenges: Specific plans for securing tax revenue and fiscal management must be developed.

✅ Addressing Coverage Gaps

• Support for freelancers and self-employed workers must be expanded. Key measures include:

  • Expand employment insurance coverage to include special employment and platform workers.
  • Create separate childbirth and childcare support systems for self-employed workers.
  • Design universal systems that guarantee basic childcare support regardless of income level.
  • If general account transfer occurs, discrimination by employment type can be reduced.

• Actual usage by small business workers must be guaranteed. Key directions include:

  • Expand replacement worker subsidies for small businesses taking parental leave to reduce burden.
  • Strictly punish disadvantageous treatment for using parental leave.
  • Awareness campaigns are needed to establish a culture of parental leave usage.
  • Monitor parental leave usage rates among small business workers and strengthen support.

✅ Employment Insurance Financial Stabilization

• The soundness of the unemployment benefit account must be restored. Key tasks include:

  • Reduce unemployment benefit spending burden by separating maternity protection programs.
  • Maintain appropriate reserve levels to prepare for increased unemployment during economic fluctuations.
  • Prevent unemployment benefit fraud and increase system efficiency.
  • If necessary, review additional funding measures such as premium rate adjustments or government subsidies.

• The system must be redesigned from a long-term perspective. Key directions include:

  • Clarify employment insurance functions and focus on responding to unemployment risk.
  • Other policy objectives like maternity protection and vocational training should be operated from separate funding sources.
  • Sustainable design reflecting demographic changes and labor market changes is needed.
  • Comprehensively review role division among social insurance programs and use of tax revenue.

4️⃣ Related Term Explanations

🔎 Employment Insurance

• Employment insurance is a social insurance system to prepare for unemployment risk.
  • Employment insurance is social insurance operated for unemployment prevention, re-employment support, and strengthening employment stability. Workers and employers jointly pay premiums, with main spending on unemployment benefits, vocational ability development, and maternity protection benefits.
  • When introduced in 1995, it focused on responding to unemployment risk, but functions gradually expanded to include employment stability, vocational ability development, and maternity protection. Currently, it pays various benefits beyond unemployment benefits, including maternity leave benefits, parental leave allowances, and reduced working hours allowances during childcare.
  • Concerns are raised that the original purpose of responding to unemployment risk may weaken as maternity protection spending surges recently. Voices are growing that funding separation between programs and function redefinition are needed to ensure financial sustainability. Employment insurance premiums are charged as a percentage of wages, with workers and employers each paying half.

🔎 Maternity Protection System

• The maternity protection system supports pregnancy, childbirth, and childcare processes.
  • The maternity protection system is an institutional device to protect workers' health and employment during pregnancy, childbirth, and childcare. It includes maternity leave, parental leave, and related benefit payments, operated based on the Labor Standards Act and Employment Insurance Act.
  • Main content includes: First, maternity leave before and after childbirth is 90 days (120 days for multiple births) with benefits paid by employment insurance. Second, parental leave is possible for up to one year with parental leave allowances. Third, allowances can be received while reducing weekly working hours through the reduced working hours system during childcare. Fourth, various support exists including spouse childbirth leave and infertility treatment leave.
  • This system aims to reduce career interruptions for women and increase birth rates, but equity debates continue as accessibility varies by employment type. Freelancers and self-employed workers in particular can't receive benefits as they're not eligible for employment insurance, and small business workers often find actual usage difficult due to company atmosphere or lack of replacement workers.

🔎 Unemployment Benefit Account

• The unemployment benefit account is the financial resource that pays job-seeking benefits to unemployed people.
  • The unemployment benefit account is a financial item within the employment insurance fund established to pay job-seeking benefits to involuntarily unemployed people. It's premised on maintaining a certain level of reserves to prepare for increased unemployment during economic fluctuations.
  • Unemployment benefits are benefits to support living stability during re-employment activities when workers become involuntarily unemployed. They pay a percentage of pre-unemployment wages, and continued receipt requires proving job-seeking activities. Payment periods are differentiated from 120 to 270 days depending on age and enrollment period.
  • Concerns about reserve depletion are growing recently as increased maternity protection spending combines with economic instability factors. Reserves are expected to turn negative from 2027, with accumulated shortfalls reaching 29 trillion won by 2035. Discussion of funding separation between programs is becoming serious, and structural reform to restore the original function of unemployment benefits is urgent.

🔎 Government General Account

• The government general account is the basic account of national finances funded by taxes.
  • The government general account is the basic account of national finances not tied to specific purposes, funded by tax revenue. Policies with high social necessity and requiring universality are often operated from the general account.
  • The general account is the financial resource for the government's basic administrative activities and public service provision. Most government functions including national defense, public safety, education, welfare, and health are operated from the general account. Unlike special accounts or funds, it's not limited to specific purposes, allowing flexible fiscal management.
  • If maternity protection programs are transferred to the general account, financial responsibility becomes clear and universal support becomes possible, but new challenges of increased national financial burden follow. Currently, the Ministry of Planning and Budget maintains a cautious position due to financial burden, and comprehensive review is needed along with measures to secure tax revenue. However, labor and management maintain that general account transfer is appropriate as maternity protection is the government's universal responsibility.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can anyone receive parental leave allowance?

A: Only workers enrolled in employment insurance can receive it, so coverage gaps exist.

• To receive parental leave allowance, you must be enrolled in employment insurance and have 180 days or more of coverage. Workers with children aged 8 or under or in elementary school grade 2 or below who apply for parental leave can receive the allowance. Each parent can use it for up to one year, receiving a percentage of regular wages during the leave period.
• However, freelancers, self-employed workers, and special employment workers cannot receive parental leave allowances as they're not eligible for employment insurance. Also, small business workers often find actual usage difficult due to negative company attitudes or lack of replacement workers. Non-regular workers sometimes hesitate to apply due to job insecurity. As a result, benefits are concentrated among large companies and public sector regular workers, with equity issues continuously raised.

Q: Why are they trying to move maternity protection programs to the general account?

A: To address employment insurance financial pressure and restore the system's original function.

• Maternity protection spending is surging and becoming a major burden on employment insurance finances. Maternity protection spending is expected to reach 7.7 trillion won by 2035, putting the unemployment benefit account reserve at risk of depletion. Employment insurance was originally a system to prepare for unemployment risk, but concerns are growing that its original function may weaken due to increased maternity protection spending.
• Transferring to the general account has several advantages. First, the universal support nature of maternity protection can be strengthened by using tax revenue as funding. Second, a foundation is established to expand support to all citizens regardless of employment type. Third, employment insurance finances stabilize, allowing restoration of the original function of unemployment benefits. However, the Ministry of Planning and Budget maintains a cautious position as national financial burden increases, and the challenge remains to develop measures to secure tax revenue.

Q: Will parental leave benefits decrease if transferred to the general account?

A: Rather, it establishes a foundation for more people to receive benefits.

• Transferring to the general account doesn't mean parental leave benefits will decrease. Rather, universal support becomes possible regardless of employment insurance enrollment, opening the way for freelancers, self-employed workers, and special employment workers currently in coverage gaps to receive benefits. Using tax revenue as funding means supporting maternity protection as the government's universal responsibility, so more citizens can receive benefits.
• However, some challenges exist. First, stable tax revenue must be secured as national financial burden increases. Second, social consensus is needed on how to determine support levels and targets in system design. Third, care must be taken not to reduce benefits for existing recipients during the gradual transfer process. Labor and management believe general account transfer can provide more substantial help to more people in the long term, and the government is expected to develop specific transfer plans considering fiscal conditions.

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