South Korea is advancing an employment-insurance overhaul as the unemployment benefits account faces mounting pressure and benefit payments can exceed the take-home pay of minimum-wage workers. The Employment Insurance System Reform Plan, announced by the Ministry of Employment and Labor on September 1 after discussions since last year among government, business and labor representatives, would shift benefits from a short-and-high model to a longer-and-lower one. Unpaid weekly holidays would be excluded from benefit calculations, moving the system from seven paid days a week to six. The monthly lower-limit payment would fall from about 1.98 million Korean won to approximately 1.7 million won, or around 1.76 million won when next year’s minimum wage is applied, while the total entitlement would remain unchanged. A 150-day entitlement, for example, would be spread over roughly 5.8 months instead of five. The government says the changes could cut annual unemployment-benefit spending by more than 1 trillion won and encourage earlier reemployment, although critics warn that a monthly reduction of about 300,000 won would burden low-income workers. The reform would also link the upper limit to 103% of the lower limit, revise the benefit calculation base and tighten early-reemployment allowance rules. Premiums paid by workers and employers would each rise by 0.1 percentage point, lifting the combined rate from 1.8% to 2.0%. Childbirth and childcare support, including maternity protection benefits, would be moved into a separate account funded jointly by labor, management and the government. The broader employment-insurance package also includes income-based eligibility for some workers and a planned work-family balance account from 2028. Separately, the Wage Claim Guarantee Fund is under financial strain, with its recovery rate falling to 29.7% in 2025 and reserves declining to about 276.5 billion won last year from 834 billion won in 2020.