A signboard of the Presidential Committee on Ageing Society and Population Policy is seen at the Government Complex Seoul, May 10. Yonhap

The government will increase the maximum allowance for parents taking child care leave to 2.5 million won ($1,812) per month, up from the current 1.5 million won, for the first three months of their leave.

The government will also expand the period of child care leave from the current 12 months to 18 months.

The Presidential Committee on Ageing Society and Population Policy announced these measures, Wednesday, as part of the government's strengthened efforts to raise Korea's birthrate, currently the world's lowest. The country's total fertility rate, representing the average number of expected births per woman in her lifetime, stood at 0.72 in 2023.

According to the committee, a new ministry tentatively named the Ministry of Strategic Population Planning will be established to spearhead initiatives in three pivotal areas: achieving a balance between work and family life, expanding childcare programs, and enhancing housing support.

In order to fully mobilize the state's capabilities, the head of the ministry will double as the deputy prime minister for social affairs across education, labor, welfare and other relevant sectors.

"The dwindling population driven by the low birthrate is the most crucial and fatal problem faced by society," President Yoon Suk Yeol said as he presided over the committee meeting.

"In that regard, the government declares a state of emergency concerning population, and with resolute determination, will make full-fledged efforts to address the challenges," he added.

Under the schemes, the cap for child care leave allowance for working parents will be raised to 2.5 million won for the first three months, in an effort to reduce the financial burden on parents raising children. The cap will then be 2 million won for the next three months and 1.6 million won for the following six months.

Parents will also be allowed to take child care leave for up to 18 months, up from the current 12 months.

They will also have the option to split the leave into three periods, an increase from the current two, to provide greater flexibility and efficiency.

After-school care programs will gradually expand to include all elementary school students, whereas currently only first-graders benefit from them. Additionally, free education will be offered to children as young as three years old, down from the current age of five.

To alleviate educational pressures in a highly competitive society, the education ministry will collaborate with universities and other educational institutions to expand the availability of free English classes in kindergarten and after-school programs for primary school students.

For families with multiple children, opportunities for college admissions will be expanded for each child. Additionally, discounts will be offered to these households when using public facilities such as KTX high-speed trains and airport parking lots.

To help more newlyweds and families with newborn babies cope with housing issues, the maximum yearly income allowed to take out subsidized jeonse loans will be increased to 100 million won, up from 75 million won.

A jeonse loan refers to a lump-sum deposit paid for a rental space under a contract period of two years or longer, instead of paying monthly rent. Unlike rent, the jeonse money is returned to the lessee after the rental contract ends.

The government's housing supply for families with newborn babies will be increased to 120,000 homes per year, up from 70,000 currently planned by the land ministry.

A statement released by the committee did not specify a timeframe for the implementation of the policy changes, but emphasized the need for rapid execution before the "golden time" for improvement lapses.

It noted that the current fertility rate is pushing Korea toward demographic challenges at an accelerated pace, heightening risks of crises related to labor shortages, economic stability, and national security concerns.