Public Pension and Basic Pension as Measures against Poverty for Elderly Women in Korea and Germany
Authors:   The Korean-Japanese Economics & Management Association, Bae Hae-Sun 
Published: June 2024

Purpose: Korea reached an aging rate of 18.4% in 2023, and it is expected to reach 20.6% in 2025, making it a super-aged society. Meanwhile, Germany became a super-aged society in 2008, with an aging rate over 21%. In Korea and Germany, social concern about the elderly's poverty is increasing as the aging rate increases. However, there is a large difference between Korea and Germany in the relative poverty rate of the elderly, in particular for elderly women. This paper focuses on women's pension rights in the public pension and the basic security benefit in old age as measures against poverty of elderly women in Korea and Germany.
Research design, data, and methodology: This paper examines the following two points as measures against poverty for the elderly in Korea and Germany, and compares the characteristics, similarities and differences between the two countries: First, the structures of women's pension rights and the pension amounts in the public pensions of Korea and Germany are compared. Second, as public pension and public assistance that guarantee stable income and minimum sociocultural standard of living for the elderly, Korea's “Basic Pension(BP)” and Germany's “Basic Security Benefit for the Elderly (GS: Grundsicherung)” and “Basic Pension(GR: Grundrente)” are compared.
Results: The research results are the following three points. First, the relative poverty rate for elderly women in Germany is much lower than that in Korea, and one of the main reasons for this is consideration given to child-rearing period and short-time employment under the Pension law. In particular, the child-rearing period is an important factor for strengthening women's pension rights. Second, as a basic security benefit for the elderly, there is a “Basic Pension(BP)” in Korea, and there is a “Basic Security Benefit for the Elderly(GS)” in Germany. Although the two systems have similarities in terms of financial resources and means test methods, there are significant differences in the scope of eligible beneficiaries of benefit. Third, the basic pension(BP) in Korea and basic pension(GR) in Germany have the same name, and the financial resource for the benefits is borne by the government. But they are completely different systems. The basic pension(BP) in Korea is a public assistance, and its legal basis is similar to Basic Security Benefits for the Elderly(GS)''in Germany. The basic pension(GR) in Germany is an additional benefit added to the statutory public pension amounts and has the effect of increasing pension amount of elderly women in particular.
Implications: Public pension and public assistance that guarantee the stable income and the sociocultural minimum subsistence level for women in old age are becoming more important than before. The public pension system in both countries have similarities in that the pension contribution is based on '' individual units'' and a dependent spouse is classified as Voluntary Insured Person. And both countries are enforcing ''basic pension'' as measures against poverty for the elderly. But the relative poverty rate for elderly women in Korea is 48.3%, much higher than 10.4% in Germany. The main reason for this difference between the two countries is the support in the pension system that takes into account women's child-rearing period, working style and low pension amount. Statutory public pension of Germany has the function of social compensation and burden distribution for child care. Korea, which needs to cope with its declining birthrate and aging society, needs to consider the achievements and effects of Germany, which takes into account the child-rearing support and the poverty measure for elderly women in its pension system.