Poverty among the elderly is on the rise again. The poverty rate stood at a whopping 47.7 percent in 2016, up two percentage points from 2015, according to Statistics Korea on Monday.
It soared from 43.9 percent in 2006 to 49.6 percent in 2013 but then fell slightly to 45.7 percent in 2015 because the government increased the monthly basic pension payout and living subsidies for destitute elderly people in 2014 (US$1=W1,150).
Poverty is defined as earning less than 50 percent of the country’s median income.
Kang Shin-ho of the Korea Institute for Health and Social Affairs attributed the increase to a rise in the number of retirees who earned no income at all and of low-income elderly people who live alone.
“Elderly people in the bottom 20 percent income bracket earned even less last year than the previous year”, he added.
Korea’s elderly poverty rate was the highest in the OECD as of 2014, about four times as high as the OECD average 12.1 percent.
But Korea ranked 18th among the 35 OECD members with a poverty rate of nine percent among the working-age population aged 26-65, which was below the average of 10 percent.
The reason the Korean elderly are significantly poorer is the relatively short history of the national pension system and that people tend to invest heavily in real estate assets, leaving little ready money at their disposal.
“The elderly poverty rate could fall to 41-42 percent if the monthly basic pension payout increases and more jobs are created for the elderly”, an official with the Ministry of Health and Welfare predicted.