The South Korean government has launched efforts to address the so-called "marriage penalty," under which various support benefits shrink once a couple registers their marriage. The government plans to overhaul the system by easing public rental housing eligibility criteria, lowering jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) loan premium rates, and expanding tax benefits, so that registering a marriage becomes an incentive rather than an economic disadvantage.
The government announced the "Marriage-Friendly System Reform Plan" containing these measures at the third ministerial meeting on youth policy, chaired by Prime Minister Kim Min-seok on Tuesday.
The government moved to reform the system because the phenomenon of delaying marriage registration after marriage has been worsening. The proportion of couples delaying their marriage registration by more than a year rose from 10.9% in 2014 to 19% last year. The government views the system, under which various support benefits shrink after marriage, as one cause of delayed registration.
A representative example is the income deduction for jeonse loans. Currently, the income deduction for principal and interest repayments on jeonse loans for heads of households without homes can only be received by one of the two spouses after marriage. The government decided to consider a plan that would allow a spouse to also receive the income deduction in cases where the couple lives separately, such as weekend couples or due to the relocation of public institutions to provincial areas.
The fuel tax refund system for compact cars will also be revised. At present, when a man and a woman who each own a compact car get married, they become a "household owning two compact cars" and are excluded from the refund. The government is pursuing a plan to improve the problem of benefits disappearing due to marriage, allowing a refund for one car per household.
Housing support will also be expanded. The government decided to lower the threshold by raising the income criteria for newlyweds' entry into public rental housing to about twice that of a single-person household. Accordingly, the income standard for dual-income newlywed households under the Happy House program will rise sharply from 7.63 million won to 9.39 million won. The income standard for a single-person household is 4.58 million won. In addition, young people who moved in while single will be allowed one renewal even if they exceed the income and asset criteria after marriage.
For the Buttmok jeonse loan, the government plans to lower the premium rate—imposed when a young person who took out a loan before marriage exceeds the combined income standard for couples after registering their marriage—from the current 0.3 percentage point to 0.15 percentage point.
In addition, the government decided to ease the two-person household income criteria for the Youth Future Savings program to support newlyweds' asset accumulation. Accordingly, the standard-type two-person household income standard will rise from 94.32 million won to 117.9 million won. The single-person household standard remains the same at 57.36 million won. The government will also expand the settlement subsidies and loan support limits for startup funds for young farming and fishing couples.
Support for childbearing households will also increase. The government decided to expand the period during which households giving birth and raising children can move to larger units as their children grow, beyond the existing limit of under two years of age. It will also broaden special supply opportunities, planning to establish a newborn special supply for households giving birth with children under two years of age, targeting private housing, within June.
"We will continuously identify and improve the economic burdens and institutional obstacles that make people hesitant to marry," a government official said. "We will work to build a society where marriage becomes a premium."
