The government has drawn up a comprehensive package for young adults out of concern that their delayed entry into society and widening wealth gaps are no longer individual hardships but are driving down marriages and births and eroding the country's growth potential.
President Lee Jae-myung said on the 28th at an event called "Unboxing the Youth Budget 2027" that "young people have become the most vulnerable group among all generations." He described them as "the generation with the fewest opportunities, the most hardship and pain, yet the least understood." It was the first time a president has explained a specific budget program ahead of the release of the overall budget bill, a sign of how deeply entrenched the problems facing young adults have become. "Before telling young people to try harder, it is the state's responsibility to build a society where effort is matched by opportunity," he said.
The government has designated youth policy as a "top-priority investment policy" to strengthen the country's future capacity, and will raise related fiscal spending 53.5% to 43.3 trillion won next year from 28.2 trillion won this year.
Support will be expanded starting at the education stage so that parental income and where a student lives do not determine their starting line. The government will pursue artificial intelligence support through joint university subscriptions so students can use AI in coursework and research, and will create an "X+AI conversion curriculum" that adds AI skills to existing majors, providing 6.7 million won a year in tuition support. To nurture talent outside the capital region, full scholarships will be offered at 30 regional national universities, and the regional talent scholarship program will expand to 10,000 recipients from 4,000.
Housing support will also widen. Eligibility for monthly rent assistance will be extended to young adults earning up to 100% of the median income — about 2.73 million won a month for a single-person household — from the current 60%, or about 1.64 million won. For young adults in the near-poor bracket and below, the rent support period will be extended to 48 months from 24. The government will supply a new universal-type public rental housing program for young adults and expand subsidies for the premiums on jeonse deposit return guarantees. Jeonse is a Korean lease system requiring a large lump-sum deposit instead of monthly rent. To help young adults with little starting capital get onto the housing ladder, the government plans to add tailored housing finance products such as the "Youth Future Bogeumjari Loan" and a combined jeonse-and-monthly-rent guarantee for young adults.
The welfare system as a whole, which currently penalizes marriage, will also be overhauled. A one-time marriage grant of 1 million won will be paid once in a lifetime after a marriage registration, regardless of income. For newborns, the government will introduce a "Child Welcome Grant" paying a total of 10 million to 20 million won depending on the region of residence and birth order, and will create a new basic child allowance. As a result, a first child born next year in a designated priority region outside the capital area will be eligible for 140.57 million won in government support through the age of 18. The child would receive 15 million won from the Child Welcome Grant at birth, followed by 14.4 million won in basic child allowance for home care up to age one and another 39.6 million won from ages two to 12. In addition, if parents earning 100% of the median income contribute 1 million won a year to the Our Child Independence Fund, the child would receive 71.57 million won at age 18. If that child then enters a regional national university with full tuition covered, uses the Youth Leap Incentive and the Youth Future Savings Account while preparing for and staying in a job, and receives the 1 million won marriage grant, the total would reach as much as about 195.84 million won by age 34.
Asset building will be supported in a continuous chain from childhood through young adulthood. The government will introduce the "Our Child Independence Fund," in which the state and parents jointly save and invest from birth until age 18, contributing up to 1.2 million won a year so the account matures at between 60 million won and 100 million won. It will also launch "Youth Opportunity Funds," low-interest loans of up to 20 million won at annual rates of 2% to 5% for unemployed young adults preparing to find work or start a business.
The "Youth Future Savings Account" will be expanded and revamped to help young adults who have entered the workforce build a lump sum. Income requirements for the standard product will be scrapped to widen eligibility, and the government's matching ratio for the preferential product will be raised. The government will also pursue income deductions for young adults' contributions to individual savings accounts (ISAs), preferential tax credits for retirement pensions and support for first-time national pension premiums.
To ease transportation costs, the "Modu Card" program will be extended to teenagers and its rebates expanded. The Youth Culture and Arts Pass will change from a one-time benefit for those aged 19 and 20 to an annual payment of 100,000 to 150,000 won for all young adults aged 19 to 34. Its coverage will also broaden from performances, exhibitions, films and books to include sports.
The government will support the return to civilian life and asset building of young adults completing military service. It will continue subsidies for the "Soldier Tomorrow Preparation Savings Account," under which the government matches 100% of contributions of up to 550,000 won a month by conscripts, and will extend the tax exemption on interest income. The economic burden surrounding marriage and childbirth will also be reduced.
