April 20, 2024

• 

[THE INVESTOR] Earned income support provided by the government to offset low wages will rise a sharp 260 percent from this year to near 5 trillion won (US$4.47 billion) in 2019, official data showed on Sept. 2.

The increase in earned income tax credit comes as payment method changes will go into effect along with the move to offer assistance set aside for the first half for next year in advance, the finance ministry said.

Seoul provided 1.34 trillion won in credit this year, which went to encourage people to work and reduce wage gaps using state tax revenue. Next year‘s total is expected to rise 3.55 trillion won to a little over 4.9 trillion won.

Asia’s fourth-largest economy started offering the subsidies in 2009.

The sum exceeds the originally planned 3.8 trillion won that policymakers planned to give to around 3.34 million households, up from 1.66 million households in 2017.

“The increase comes as the government expanded the scope of people eligible for the EITC program to include more with assets and those with higher income,” an official source said.

He said for next year a single person household making less than 20 million won annually or a family with only one wage earner making less than 30 million won will be eligible for the state subsidy.

Double income earners with combined intake of less than 36 million won per year and those with assets not exceeding 200 million won can benefit from the revised EITC rules going forward.

In addition, starting in 2019, those under 30 living alone can receive assistance, with the amount of support ranging from 1.5 million won all the way up to 3 million won per month depending on the size of family.

This is equal to a 20-75 percent spike in support compared with the present.

By Park Ga-young and newswires (gypark@heraldcorp.com)