South Korea’s 2026 Budget Proposal: Key Welfare and Support Measures

The South Korean government has unveiled its 2026 budget proposal on August 29, 2025, which includes a significant expansion of social welfare and support programs for children, youth, the elderly, and regional communities. These measures aim to address demographic challenges (like low birthrate and population decline), support young people’s financial stability, improve work-life balance for parents, and boost regional economies. Below we break down the major support initiatives introduced in the 2026 budget plan, organized by target group or sector.

Increased Child Allowance and Childcare Support

Child Allowance Extended to Age 8: Starting in 2026, the child allowance (아동수당) age limit will increase from the current 7 years old to 8 years old, expanding coverage to about 500,000 additional children  . The monthly allowance amount, which is ₩100,000 in the Seoul metro area, will be higher in other regions to encourage child-rearing in less populated areas. For example, in non-capital regions it rises to ₩105,000, in designated population-decline “priority” areas to ₩110,000, and in the most critical “special support” areas to ₩120,000 . Notably, in special support regions that pay the benefit via local gift certificates, the allowance can go up to ₩130,000 per month .

Expanded Childcare Support: To help families with young children, the budget creates a new “night-time emergency childcare subsidy” of ₩5,000 per hour for urgent late-night babysitting needs . This is meant to fill gaps in childcare during late hours. Additionally, low-income families living in population-decline areas will get an extra 10% subsidy on their co-payment for childcare services, reducing their out-of-pocket childcare costs .

Incentives for Work-Life Balance

4.5-Day Workweek Incentives: In order to promote work-life balance for parents, the government will financially encourage companies to adopt a 4.5-day workweek (e.g. taking off Friday afternoons) . Small and medium-sized enterprises (SMEs) that introduce a 4.5-day workweek will receive ₩200,000 per employee for partial adoption (e.g. half-day off per week) or ₩400,000 per employee for full adoption (full day off per week) as a monthly subsidy . Moreover, if the reduced workweek leads the firm to hire additional staff, a separate job creation incentive up to ₩600,000 per new hire is provided . These measures aim to offset wage costs and encourage shorter workweeks.

“10 AM Parent Commute” Support: A new pilot program will support companies that allow employees with young children to start their workday at 10 AM (enabling parents to handle morning childcare). Employers who implement this for employees will receive ₩300,000 per participating employee per month from the government, compensating the wage for the reduced hour of work . This initiative helps working parents (especially those with infants or toddlers) manage childcare in the mornings without losing income .

Youth Savings and Housing Programs

“Youth Future Savings” (청년미래적금): To help young adults build assets, the budget introduces a new matched savings program for youth starting in 2026. Eligible are youth ages 19–34 with annual income up to ₩60 million (or small business owners with annual revenue ≤ ₩300 million) . Participants can deposit up to ₩500,000 per month for 3 years, and the government will match a portion of their contributions. Most participants (e.g. self-employed or those in ordinary jobs) receive a 6% match (₩30,000 on a ₩500,000 deposit each month), while young people who take a new job at an SME and stay employed there get a 12% match on their deposits  . For example, a youth working at an SME who saves the maximum ₩500,000 every month for 3 years would accumulate a total of around ₩20.16 million including ₩2.16 million in government matching funds . With interest (which will be tax-free for this program), the final amount at maturity is projected to reach as high as ~₩22 million . This substantial lump sum after 3 years is intended to help young people achieve milestones like starting a business, pursuing further education, or buying a home.

Regional Employment Retention Bonus: To encourage young adults to work in regions outside the capital, a new “youth retention incentive” is established. If a young person takes a job at an SME in a non-metropolitan area and stays for 2 years, the government will grant a bonus of ₩4.8 million. The bonus is higher for harder-hit regions: in designated “priority” population decline areas it rises to ₩6 million, and in “special support” areas up to ₩7.2 million over two years . This essentially provides an annual bonus (₩2.4–3.6 million per year) to young workers who commit to staying in regional jobs, helping to offset typically lower regional salaries and encourage talent to remain in or move to rural provinces.

Youth Rent and Housing Support: A pilot program that subsidized rent for low-income youth will be made permanent (on-going) from 2026. Eligible young adults with modest incomes will receive ₩200,000 per month toward rent for up to 24 months . This two-year rental support program helps ease the housing cost burden for young people just starting out. In addition, the supply of public rental housing for youth will be expanded significantly – from 27,000 units in 2025 to 35,000 units in 2026, an increase aimed at providing more affordable housing options for young people .

Public Transport Flat-Rate “K-Pass” Expansion

A subway station poster in Seoul explaining the current K-Pass system, which refunds 20–53% of public transit fares. The 2026 budget will expand this into a flat-rate pass offering deeper discounts. (Image: Yonhap News)

To reduce transportation costs, the government is introducing a new “flat-rate public transport pass” nationwide, essentially an expanded version of the existing K-Pass transit card . Under this scheme, for a monthly payment of around ₩55,000 (youth, seniors, low-income, and multi-child families) or ₩62,000 (general public), commuters will be able to take unlimited buses and subways up to a ₩200,000 fare value per month  . If including high-speed commuter transit like GTX trains or intercity express buses, the flat-pass costs ₩90,000 per month for youth, seniors, etc., or ₩100,000 for regular adults, covering up to ₩200,000 in travel value . This effectively halves commuters’ transit expenses if they max out the usage. The new pass is being described as a nationwide version of Seoul’s “Climate Companion Card”, extending similar transit savings across the country . It improves upon the current K-Pass (which offers partial fare refunds for 15+ trips) by providing a simpler flat-fee structure with potentially greater savings for frequent or long-distance riders  . This measure, backed by a ₩5.3 trillion transit budget (a 122% increase in transit subsidies), aims to promote public transport use and ease commuters’ cost burden  .

Regional Basic Income Pilot for Rural Residents

In an experimental move, the 2026 budget will pilot a “farmers and fishermen basic income” program in select rural areas facing population decline. About 6 rural counties (totaling ~240,000 residents) will be chosen through an open application process to implement this trial . Starting next year, each resident in the selected areas will receive ₩150,000 per month as a basic income, regardless of employment status . This rural basic income experiment is intended to supplement incomes in struggling farming/fishing communities and evaluate the impacts on local economies and population retention . The government will monitor the outcomes of this trial before considering expansion.

Support for Local Economies and Small Businesses

Local Currency Vouchers: To boost local economies, the government will support the issuance of ₩24 trillion worth of regional love gift certificates (지역사랑상품권) in 2026 . These are local currency vouchers that residents can use at local shops and markets. The national government subsidy rate for discounts on these local vouchers will be increased, with higher support for less developed areas – for purchases of local currency, the central government will subsidize 3% in metro areas, 5% in non-metro areas, and 7% in population-decline regions, making it more attractive for consumers to buy and use local currency in those areas . This boosts the effective discount people get when using local community currency, encouraging spending at local businesses.

Tourism Spending Rebates: To encourage tourism in rural regions, a new measure will refund 50% of travel expenses (up to ₩200,000) in the form of local gift vouchers to visitors of certain less-populated areas . In 2026, 20 population-decline counties will be designated for this tourism promotion pilot. An estimated 100,000 tourist groups (e.g. families or travel parties) who travel to these areas can claim back half of their eligible expenses (transport, accommodation, etc.) after the trip, up to the ₩200,000 cap, paid in local currency that must be spent in the region . This program encourages domestic tourism into rural communities, helping local businesses in those areas.

Small Business “Management Voucher”: For micro-business owners, the budget introduces a one-time ₩250,000 management support voucher. This will be given to about 2.3 million small businesses with annual sales under ₩100.4 million (roughly $75,000 USD) . Entrepreneurs can use this voucher to pay for necessary expenses like utility bills or business insurance premiums . It’s essentially a small grant to alleviate operational costs for the smallest businesses, many of whom are still recovering from the pandemic and economic downturn.

Expanded Senior Employment Opportunities

More Senior Job Positions: The government will create 50,000 additional part-time jobs for seniors, increasing the number of subsidized senior employment slots from 1.10 million to 1.15 million nationwide . Notably, about 90% of these new senior jobs will be allocated to regions outside the capital (Seoul) area , reflecting an effort to support elderly citizens in provincial areas with job opportunities (such as community service roles, public sector part-time jobs, etc.). These programs not only provide income to seniors but also keep them socially active.

Incentives to Retain Older Workers: A new “senior employment retention incentive” (고령자 통합장려금) will reward companies for keeping or hiring senior employees (aged 60+). Businesses that continue employing seniors beyond retirement age or hire older workers will receive ₩300,000 per month for up to 3 years per senior employee retained . This subsidy, available for up to 36 months, helps offset the wage cost of older employees and encourages firms to utilize the experience of senior workers instead of pushing them into early retirement. It is part of the government’s strategy to cope with an aging society by extending seniors’ participation in the workforce.

Improved Benefits for Military Personnel

The budget also addresses treatment of military servicemembers, particularly junior officers and enlistees:
• Pay Raise for Junior Officers: Military personnel with less than 5 years of service (e.g. non-commissioned officers and junior officers) will receive a pay increase of up to 6.6% . This above-inflation raise is meant to improve conditions for young soldiers who often have relatively low starting salaries.
• “Tomorrow Savings” Plan for Long-term Service: To encourage longer military careers, the government will introduce a savings matching program for career servicemembers. Those who commit to long-term service can deposit ₩300,000 per month into a special savings account, and the government will match contributions such that after 3 years the account holder accumulates up to ₩10.8 million in matched savings . This “내일준비적금” program (literally “Tomorrow Preparation Savings”) essentially provides up to ₩10.8 million in free money over 3 years to long-term military personnel, helping them prepare financially for post-service life.
• Increased Duty Allowances: Additional stipends for soldiers who take on night duty or on-call shifts are being raised. On-call duty pay will increase by ₩1,000 on weekdays and ₩2,000 on holidays per duty shift from 2026 . While the amounts seem small, these duty allowances (당직비) accumulate and the increase is a gesture to compensate service members for the demanding nature of being on duty after hours.

Nutrition and Health Initiatives

Healthy Snacks in Schools: As part of supporting child nutrition, all public elementary schools nationwide will provide a free weekly fruit and vegetable snack to first and second graders in after-school programs . This “늘봄학교 맞춤형 간식” initiative will ensure young children receive fresh, locally-grown fruits or veggies once a week as an afternoon snack. The produce will include seasonal Korean fruits like apples, pears, grapes, tomatoes, strawberries, melons, and watermelons . This not only improves children’s diet quality but also supports local farmers by sourcing domestic fruit and produce.

Meal Support for Workers in Remote Areas: For workers in small and medium enterprises located in population-decline regions, the government will subsidize meals to improve their nutrition and reduce living costs. Each eligible worker can receive ₩40,000 per month worth of meal support . Companies can choose the form of support: either provide a “₩1,000 breakfast” (천원의 아침밥) made of rice or other staples to encourage employees to eat a healthy breakfast, or offer a “hearty lunch” discount program (든든한 점심밥) which gives discounts at local restaurants during lunch hour . This program, which builds on a successful ₩1,000 campus meal idea, aims to ensure that employees in regions with limited dining options get at least one affordable, nutritious meal each day.

Expanded Free Vaccinations: Public health support for youth is also enhanced. Starting in 2026, the government will expand the age range for free seasonal influenza vaccinations to include 14-year-olds (previously it covered children up to 13) . This means middle school third-graders will now be eligible for free flu shots each year, improving herd immunity among school-aged children. Additionally, the free HPV (human papillomavirus) immunization program – which currently provides the HPV vaccine at no cost to girls aged 12–17 – will be expanded to include 12-year-old boys as well . By adding young boys to the HPV vaccination program, the government is moving toward gender-neutral HPV prevention, which in the long run helps reduce cervical cancer and other HPV-related diseases in the population. These preventative health measures reflect a focus on youth health and wellbeing as part of the broader social safety net.

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Sources: The information above is based on the South Korean Ministry of Economy and Finance’s 2026 budget proposal announcement and reporting by major news outlets     , as well as details from related press coverage by MBC News   , The Hankyoreh  , and other Korean media. These measures underscore the government’s policy priorities of bolstering support for families and youth, stimulating regional development, and improving the quality of life for citizens across all ages in the coming year.