The size of in-kind welfare provided by the state, including health insurance, national scholarships, and free child care, has been estimated to reach an average of 9.24 million won per household. Due to low birth rates and an aging population, the proportion of medical expenses in social in-kind transfer income accounted for more than half (51.1%) of the total.
According to the 'income statistics reflecting social in-kind transfers' released by the Statistics Korea on the 18th, the social in-kind transfer income per household in 2023 is 9.24 million won, an increase of 0.1% from the previous year (9.23 million won).
While the amount of social in-kind transfer income per household reached an all-time high, the growth rate marked the lowest level, excluding the negative record in 2020.
Social in-kind transfers refer to services such as education, medical care, and child care provided free of charge to households or individuals by the state or local governments, as well as energy vouchers. This means the government supported about 9.24 million won in social services and products, such as medical and educational expenses, which households had to pay directly.
The proportion of social in-kind transfer income compared to total household income (71.85 million won) was at 12.9%, a decrease of 0.7 percentage points from the previous year (13.6%). A Statistics Korea official noted, 'The number of households has increased, but the number of members per household has decreased,' adding that 'generally, when the number of household members increases, the scale of in-kind welfare also expands, so we are seeing a phenomenon where in-kind transfer income relative to household income is declining.'
In low-income households, the proportion accounted for by in-kind welfare reached half. Social in-kind transfer income for the lowest 20% (first quintile) of households was 7.23 million won, equivalent to 48% of their annual income. Of this, 87.2% was for medical support, which can be attributed to the high population of elderly individuals.
For high-income households, the absolute amount of in-kind welfare was larger. The amount of social in-kind transfers decreased from 7.23 million won in the first quintile to 6.7 million won in the second quintile, but increased again to 8.81 million won in the third quintile, 11.1 million won in the fourth quintile, and 12.33 million won in the fifth quintile. In households from the fourth quintile onward, education accounted for a larger proportion than medical care.
By age group of the household head, those in their 40s received the most benefits. The social in-kind transfer income for households in their 40s was 14.69 million won, significantly higher than those in their 50s (9.54 million won), 60s (7.87 million won), and under 30 (6.09 million won). For those in their 40s, education had a higher share, while for those in their 50s, it was a mix of medical care and education, and for those over 60, it was primarily medical care.
The number of household members also indicated that the more members there were, the greater the in-kind transfer income. Notably, in households with four or more members, in-kind transfer income increased significantly. While single and two-member households had more than 90% of their income from medical care, households with three members showed similar proportions for medical care (50%) and education and child care (46.4%). In households with four or more members, the share of education and child care exceeded 70%.
By sector composition, medical care accounted for more than half (51.1%) of the total. The shares of education and child care were 42.4% and 3.8% respectively, showing a decrease of 1.7 percentage points and 0.1 percentage points compared to the previous year. The share of other vouchers increased by 0.4 percentage points to 2.7% compared to the previous year. This can be interpreted as an increase in the medical proportion due to low birth rates and aging population, while the shares of education and child care decreased.
When in-kind welfare is reflected in household income, poverty indicators improved. The relative poverty rate for 2023, based on equalized disposable income reflecting social in-kind transfers, was 10.7%, a decrease of 4.2 percentage points compared to before reflection. The relative poverty rate refers to the proportion of the population whose disposable income is below 50% of the median income. However, the effect of in-kind welfare on improving poverty rates has shown a consistent downward trend since 2019.