INCHEON — Incheon has begun a sweeping overhaul of its locally funded cash welfare programs, including "i+ 100 Million Won Dream," the signature initiative of former Mayor Yoo Jeong-bok. The city's fiscal and budget reform task force wrapped up about 80 days of work and delivered to the city a set of recommendations to restructure 374.9 billion won ($270 million) in locally funded cash benefits over the next four years.
The scale of the city's fiscal pressure emerged at a briefing held on the 29th at the press room in Incheon City Hall. The city faces a revenue shortfall of 2.81 trillion won against spending requests for 2027. On top of that, ordinary local subsidies from the central government are at risk of coming in 500 billion won below earlier projections, a consequence of the government's new future response fund.
The task force proposed a spending cap that would keep social welfare at no more than 45% of the budget and hold locally funded cash benefits to about 5% of the city's own revenue. It recommended phasing out the central pillars of "i+ 100 Million Won Dream," including the Angel Subsidy, the Children's Dream Allowance and transportation subsidies for expectant mothers. The Angel Subsidy, which paid 1.2 million won a year to children aged 1 to 7, will see its upper age limit lowered to 4. Payments will be provided only through age 4 and only for children born between 2023 and 2026, with children born from 2027 excluded. Under that design, the program would sunset in 2030, when the last eligible recipients turn 4. The task force recommended outright abolition of the Children's Dream Allowance for those born in 2016 and the 500,000-won annual transportation subsidy for expectant mothers.
The city justified the overhaul by pointing to the central government's sharp expansion of cash support across life stages, which it says now overlaps with existing municipal programs. With the government creating and expanding benefits such as the childbirth welcome grant and the basic child allowance starting next year, the city argues that existing programs should be absorbed into national policy and redesigned. Song Hyun-seok, head of the task force, said the original plan under the former mayor had also envisioned a shift to a funding split of 70% from the national government, 20% from the city and 10% from counties and districts once the central government took over the program. "We need to restructure city programs that overlap with government policy to stop fiscal leakage," Song said.
At the briefing, however, a sharp exchange broke out over the financial burden on basic local governments. When "i+ 100 Million Won Dream" was introduced, the city pledged that if the program were not converted into a national one, it would revise the cost-sharing ratio between the city and the counties and districts from the current 8-to-2 to 9-to-1 within three years. That pledge is absent from the latest recommendations. The counties and districts are pushing back, saying the city is shifting the fiscal burden onto them by ignoring the promised 9-to-1 adjustment even as matching requirements for local funds surge along with the expansion of central government welfare.
The task force said the actual amount borne by counties and districts would fall by about 20 billion won a year because the programs themselves are being scaled back. But it stopped short of a direct answer on the cost-sharing question, saying that "a specific readjustment of the ratio is a matter to be addressed in the process of drawing up the main budget."
Half of the restructured funds, or 177.8 billion won, will go toward a new Incheon Youth Savings program for high school students. Managing public confusion over the reduced benefits and the strong pushback from basic local governments is expected to be a major test of the fiscal reform agenda.
