Gov’t examines welfare program

Restructuring has begun to rein in massive and rapidly escalating government spending on welfare benefits, with Korea’s prime minister vowing on Wednesday to analyze each program and save trillions of won this year.

“We usually pay attention to efforts to secure the budget,” Prime Minister Lee Wan-koo said during a national policy coordination meeting on Wednesday. “There are still many things left to do if we want to start sharply monitoring spending to prevent any leaks or overlap.”

Referring to his experience serving as South Chungcheong governor, Lee projected the country would be able to save about 3 trillion won ($2.74 billion) on its welfare budget if monitoring was more meticulous. “I will make sure tax money is spent properly,” he added.

Expanding welfare benefits has become a popular campaign promise, and in recent years the central and local governments have rapidly increased welfare programs.

About 116 trillion won is spent annually from central and local government budgets to finance them.

“Although we are spending more on welfare benefits, the public actually feels like it is benefitting less,” Namyangju Mayor Lee Suk-woo said at the policy meeting.

Through the overhaul, the Park administration aims to save 3.1 trillion won this year by eradicating overlapping programs and providing assistance following stricter evaluations.

Of that sum, 1.3 trillion won will be money saved by local governments.

This year, the central government operated 360 welfare programs, up from 290 in 2011. And while government ministries have promised more welfare benefits, many of those benefits overlap. Although the central government ministries adjusted 72 similar or overlapping policies in 2013, about 48 still have echoing similarities.

The Ministries of Land, Infrastructure and Transport; Health and Welfare; and Environment all offered four similar projects this year to improve housing for low-income families.

But the situation becomes even worse when the programs operated by local autonomous governments are taken into account. Even though there is no official data, about 10,000 welfare programs are operated by local governments, and many of them are duplicates of programs run by the central government.

The Park Geun-hye administration has been providing basic pensions to senior citizens since July, while some local governments are still paying their elderly longevity allowances.

In Yeonggwang County of South Jeolla, residents 87 and older used to receive 100,000 won per month. That amount was recently doubled.

The central government also hands out child care subsidies, while local governments give allowances to grandparents for looking after their grandchildren.

Many officials have pointed to public abuse of the system and the lack of resources needed to go after those who exploit it.

Experts say exploitation was destined to occur because the central and local governments failed to create a thorough monitoring system. “They don’t have accurate income information on the beneficiaries, and even the existing databases are not connected to one another,” said Professor Kim Jin-soo of Yonsei University’s School of Social Welfare. “It is no wonder the authorities can’t discern false registration or hidden incomes and assets.”

Since 2011, the government has operated a social security information system to integrate databases for income, assets and welfare benefits, but even officials in the central and local governments admit to its limit.

In South Chungcheong, 39 public servants are tasked with overseeing 2,053 day care centers, and it is nearly impossible to detect irregularities unless an insider provides information.

At the meeting, the government decided to include more information in the social security information database and allow local governments to conduct more frequent site surveys.

The Park administration’s welfare restructuring still requires cooperation from local governments, though it is uncertain if they will consent.

Experts have also expressed concern that the restructuring plan could worsen public livelihood.

“If the standards are applied too rigidly to meet the goal of saving 3 trillion won, those in desperate need may be excluded,” said Shin Young-suk, the vice president of the Korea Institute for Health and Social Affairs.

Professor Kim of Yonsei University agreed. “The evaluation should be done transparently, but standards should be eased,” he said. “Or else the government will be criticized for only trying to reduce the budget.”

BY SHIN SUNG-SIK, SER MYO-JA [ser.myoja@joongang.co.kr]