The government plans to introduce a new childcare allowance targeting sole proprietors, gig workers and freelancers who cannot access parental leave benefits, aiming to close a gap in income support for working parents outside the employment insurance system. Officials are pushing to launch the program by June next year.
According to the government Tuesday, the Cabinet discussed exempting the new childcare allowance program — designed for the self-employed, gig workers and freelancers — from a preliminary feasibility review. Article 38, Paragraph 2, Item 10 of the National Finance Act allows such exemptions on policy grounds. The program has been under consistent review since it was included as a national policy agenda last year, with eligibility criteria and benefit levels examined throughout. With the exemption approved, the government plans to move ahead with follow-up procedures.
The new allowance would provide separate income support to working parents who experience a loss of earnings during the childcare period following childbirth. Eligible recipients would include sole proprietors, gig workers, freelancers and employees with fewer than 180 days of insured employment. The measure is intended to expand support to those who fall outside the existing parental leave benefit system — either because they cannot take parental leave or because they lack sufficient employment insurance coverage.
The key difference from the existing parental leave benefit lies in who qualifies and how payments are structured. The current benefit is tied to employment insurance: workers must take formal parental leave and have accumulated at least 180 days of insured employment before the leave begins, among other requirements.
Under this year's standards, the existing parental leave benefit pays up to 2.5 million won ($1,810) per month for the first three months of leave, up to 2 million won for months four through six, and up to 1.6 million won from the seventh month onward. If both parents each take at least three months of parental leave, the total leave period can be extended to up to 18 months.
Sole proprietors are generally unable to take formal parental leave, and gig workers and freelancers may not be covered by the existing system depending on their employment type or insurance enrollment status. Workers who have not accumulated the required 180 days of insured employment due to short tenure are also ineligible for the current benefit.
The new childcare allowance would provide separate income support to working parents who fall outside the existing parental leave benefit system. Unlike the current benefit, which goes to employees who take formal parental leave, the new allowance would extend coverage to those outside the parental leave framework altogether.
The government included the creation of a childcare allowance for small business owners and the self-employed in its national policy agenda last year. The Ministry of Employment and Labor also presented a plan to introduce a childcare allowance for gig workers and freelancers in its second-half work report this month. The feasibility exemption is expected to accelerate the follow-up steps needed for actual implementation.
Specific payment amounts and duration will be announced when the government's budget proposal for next year is made public.
Earlier reports indicated the government had been considering a flat-rate payment of 500,000 to 700,000 won per month for three to six months. Because the policy extends benefits — currently funded through the employment insurance fund — to workers outside the employment insurance system, the share of costs borne by the general account is expected to grow.
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