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KMID : 1124020130290030001
Korean Social Security Studies
2013 Volume.29 No. 3 p.1 ~ p.32
Improving the Korean Intergovernmental Cost Sharing Scheme on Social Welfare Services: Focusing on Child Care Assistance and Basic Old Age Pension Programs
Joo Man-Soo

Abstract
The paper shows that the recent dispute over cost sharing on social welfare services between the central and local governments was triggered by the rapid spread of the child care assistance program and would be accelerated if the basic old age pension, as pledged in the presidential election, are expanded. So the paper tries to figure out a better way of the cost sharing in order to avoid the huge social costs for policy coordination. If the central government codes every detail on eligibility and benefits for a categorical grant and local governments have to administer the grant fund by the codes without any exception, the decentralization principle says that the central government has a sole responsibility to raise the fund. We do not have to ignore the existing cost sharing in rearranging the intergovernmental sharing scheme in a situation where the grant has expands. Therefore, a general rule of cost sharing which we propose is that the local governments continue to bear the burden of the existing expenditure role and the central government pays all additional costs by the expansion of national grant programs. Also we propose an abolition of differential grant rate system because the system is not only ineffective to reflect the difference of fiscal capacities and fiscal demands among local governments at which it aims, but also it, combined with an equalizing grant, results in reversing the ranking in the local governments` fiscal powers.
KEYWORD
expenditure on social service, child care assistance, basic old age pension, intergovernmental cost sharing, differential grant rates
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