It was tallied that last year's unemployment benefit account payouts surpassed 17 trillion won for the first time on record.
According to the Ministry of Employment and Labor (MOEL)'s "Fiscal year 2025 Employment Insurance Fund settlement of account report" on the 14th, last year's unemployment benefit account payouts were 17.4833 trillion won. This is the largest ever. With prolonged downturns in manufacturing and construction and the minimum wage increase pushing up the unemployment benefit floor, payouts appear to have expanded.
The source of unemployment benefits is the Employment Insurance Fund, which is run with premiums, collections, reserves, and fund management gains. The Employment Insurance Fund is used not only for unemployment benefits but also for employment stabilization programs and vocational skills development programs.
As unemployment benefit expenditure rises, reserves are being depleted. At the end of last year, the unemployment benefit account's reserves stood at 1.7275 trillion won. However, excluding deposits borrowed from the Public Capital Management Fund, it is in a deficit of 5.9933 trillion won. The account is being operated with borrowing fund. Because of this, the Employment Insurance Fund's overall balance also recorded a fiscal deficit of 592 billion won.
The Employment Insurance Act requires that, in preparation for mass unemployment or an economic downturn, an amount equivalent to 1.5 to 2 times the annual unemployment benefit expenditure be kept as surplus funds. However, as of last year, the reserve multiple came in at 0.1 times, short of the statutory recommendation level.
With the recent slowdown in the job market, concerns are growing about the fund's fiscal soundness. According to the Ministry of Data and Statistics (MODS), the number of employed people last month (29.12 million) decreased by 40,000 from May last year (29.16 million). It was the first year-over-year decline in 17 months. As employment falls like this, premium income decreases, inevitably increasing the fund's fiscal burden.
In this regard, the Ministry of Employment and Labor (MOEL) has formed a "task force (TF) for improving the employment insurance system" and is discussing measures to secure long-term fiscal soundness. Overhauling the unemployment benefit payment system and raising the premium rate are being discussed as alternatives.