It was tallied that more than half of the national money must be spent mandatorily on areas whose uses are legally designated, such as welfare and education.
According to the 2025–2029 National Fiscal Management Plan on the 26th, mandatory expenditure out of next year's total expenditure (764.4 trillion won) is 451.1 trillion won. Mandatory expenditure refers to spending that the government is legally obligated to make, such as transferred resources to local governments and the basic pension. As mandatory expenditure increases, discretionary expenditure for items such as social overhead capital (SOC) and research and development support decreases relatively.
Mandatory expenditure as a share of next year's total expenditure is 54.2%. This figure is projected to rise to 55% in 2028 and 55.8% in 2029.
More than half of mandatory expenditure is in the welfare sector. This includes basic livelihood guarantee benefits, health insurance, the four public pension programs, and the basic pension. As the elderly population grows, statutory expenditure in the welfare sector will exceed 200 trillion won next year and is projected to reach 237 trillion won in 2029.
The next largest item after welfare is transferred resources to local governments. This includes the grant-in-aid (non-earmarked tax) and education grants that are linked to the national tax. Transferred resources to local governments will exceed 150 trillion won next year and are expected to reach 170 trillion won in 2029.
Among mandatory expenditures, the basic pension is cited as an item with significant room for reduction. The basic pension is paid to 70% of the population aged 65 or older. As of last year, the expenditure totaled 24.3 trillion won.
According to the Hongik University Industry–Academic Cooperation Foundation's report "The silver era and public finance," adjusting the age for receiving the basic pension could save 603.4 trillion won by 2065. The method of adjusting the basic pension receipt age analyzed in the report links the elderly age threshold to remaining life expectancy. The point at which remaining life expectancy falls below a certain standard is taken as the new benchmark for defining an elderly person. Under this approach, the elderly age standard would be raised to 75 in 2056.
The report said, "We confirmed that the amount of fiscal reduction increases if the elderly age standard is raised earlier or raised higher." It also said, "With the progress of aging, the share of national funds in total fiscal needs may gradually rise, so up to 90% of the fiscal savings would likely accrue to the central government."
The government plans to include basic pension reform measures in next year's budget bill. Minister Park Hong-geun of the Ministry of Planning and Budget said on the 21st, "We may be able to prepare a (basic pension) reform plan within the year, not far off."