Index 1: Cash grant amount per young child

The total annual amount of cash grant given by the govern-ment per child aged 0 and 5 was 560,000 won in 2007, 540,000 won in 2009 and 790,000 won in 2011. This shows that the amount of cash grant from the government did not significantly change between 2007 and 2009 and then increased about 46%

in 2011 after the introduction of childcare allowance. When the amounts of tax benefits and cash allowance that belong to this category are compared, the amount of tax benefits was 360,000 won in 2007, which was about 1.8 times higher than the cash allowance amount of 200,000 won. This gap gradually declined, with average annual cash grant per young child reaching 460,000 won in 2011 to surpass average annual tax benefits per young child at 330,000 won. Concerning the changes in aver-age annual amount of tax benefits between 2007 and 2011, it was 360,000 won per young child in 2007, 310,000 won in 2009 and 330,000 won in 2011, not showing much change⁶⁾.

6) The reason for the slight decrease in the amount of tax reduction benefits

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5 Key analysis results

44 A study on the reduction of economic burden after the expansion of childcare support

However, the amount of cash grant more than doubled in 2011 to reach 460,000 won compared to around 200,000 won in 2007 and 2009 before the introduction of childcare allowance (Figure 1).

The results of the comparative analysis of total cash grant amounts among different income groups are also shown below.

The amount of tax reduction was higher in higher income groups throughout the relevant period, indicating that tax ben-efits have regressive characteristic. Regarding the allowance support, the 1st income quintile appeared to receive the high-est amount of support in 2007 and 2009, before the im-plementation of childcare allowance, with the 5th quintile group receiving the lowest support. After the expansion of al-lowance program to all child rearing households, the alal-lowance amounts increased in all income groups. In 2011, after the in-troduction of childcare allowance, the average annual allow-ance amounts for the 1st and 2nd quintile income groups grew significantly to 860,000 won and 790,000 won, respectively.

The cash allowance amount increased somewhat in the 3rd quintile group, too. As of 2011, the 2nd quintile income group received the highest cash grant benefits, which combine tax reduction benefits and cash allowance, followed by the 1st, 5th, 3rd and 4th quintile groups. The 4th quintile income group

re-seems to be the decline in the actual amount of income tax payment due to changes in income amounts.

ceived the lowest amount of cash grant, and it is considered to be due to the group's relatively low tax benefits compared to the 5th quintile group and smaller cash allowance than the 1st to 3rd quintile groups.

〈Table 11〉 Amounts of cash grant for households with children aged 0~5 according to income levels (2007~2011)

(Unit: 10,000 won)

Note: 1) Grant amounts are based on the 2010 real prices.

2) Amounts of tax reduction were obtained through simulation based on the KOWEPS data, and amounts of allowance support were obtained by analyzing the original KOWEPS data.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

46 A study on the reduction of economic burden after the expansion of childcare support

〔Figure 1〕 Overall status of cash grant support for households with children aged 0~5 (2007~2011)

(Unit: 10,000 won)

Note: Grant amounts are based on the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

〔Figure 2〕 Cash grant support for households with children aged 0~5 according to income levels (2007~2011)

(Unit: 10,000 won)

Note: Grant amounts are based on the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

The results of the analysis of cash grant amount comparing households with one young child and those with two or more young children showed that cash grant amount per child was higher among households with one child than among those with two or more children. This phenomenon became more prominent in 2009 and 2011 than in 2007. In 2007, households with one child received 100,000 won more per child than those with two or more children. They received 160,000 won and 330,000 won more per child in 2009 and 2011, respectively⁷⁾.

7) The analysis does not include the congratulatory birth subsidy for households with multiple children. However, most local governments provide subsidy to those with three or more children, and under the circumstance in which there are not many families with three or more children, cash grant that households with two or more children receive is not likely to rise considerably even if the local government subsidy is added.

48 A study on the reduction of economic burden after the expansion of childcare support

<Table 12> Cash grant support for households with children aged 0~5 according to number of children (2007~2011)

(Unit: 10,000 won)

Note: 1) Number of children refers to that of children aged 0~5.

2) Grant amounts are based on the 2010 real prices.

3) Amounts of tax reduction were obtained through simulation based on the KOWEPS data, and amounts of allowance support were obtained by analyzing the original KOWEPS data.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

〔Figure 3〕 Cash grant support for households with children aged 0~5 according to number of young children (2007~2011)

(Unit: 10,000 won)

Note: Grant amounts are based on the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).