2017-12-07 19:08
Selective child allowance stirs row among dual-income earners
By You Soo-sun

The government has decided it will continue to provide tax benefits to households with children and are in the top ten percent income bracket, a group that has been excluded from the new child benefit plan under the 2018 budget bill.

The decision came after policymakers faced surging complaints about the initial plan, under which a monthly allowance of 100,000 won ($91.60) will be given for every child under the age of six with the exception of households in the top 10 percent income bracket.

The exception was made as part of a compromise struck by opposing political parties that had been arguing over key contentious issues about the 427.8 trillion won budget bill. The bill was passed Wednesday, four days after its legal deadline.

But the parties were met with fierce criticism over the last minute change in the child benefit plan, which was originally intended to go to all households regardless of their income.

Online communities also became inundated with complaints.

Many argued the decision discriminated against dual-earner households, going against the government’s drive to combat the plummeting birthrate. Others reasoned that eligibility should be based on one’s wealth, not income.

In just a few days, over 7,600 people signed the online petition for Cheong Wa Dae, the presidential office here, demanding the child allowance be given universally as promised by President Moon Jae-in as part of his campaign pledge.

In response to rising criticisms, the Ministry of Strategy of Finance said it will introduce a tax revision to maintain the tax exemptions for households which have been excluded from the new provision.

This includes 150,000 won in tax deductions given to each child with a cap of 300,000 won as well as an additional 150,000 won given to those with at least two children under the age of six.

The new child benefits plan was to replace the existing tax benefits given to households with children, but is now expected to be kept for the excluded group.