South Korea is easing the burden on financially vulnerable households by introducing a new “livelihood account” that protects a portion of monthly income from seizure, a move aimed at strengthening basic living safeguards for debtors amid prolonged economic strain.
The Ministry of Justice said a revised civil enforcement decree was approved by the Cabinet on Jan. 20 and will take effect Feb. 1. Under the change, individuals will be allowed to open a single designated account at a domestic bank or financial institution, shielding up to about $1,900 a month from creditors.
Funds deposited into the account will be classified as exempt living expenses and cannot be seized, with monthly deposits capped at that level. If the combined total of funds held in the livelihood account and in cash does not exceed the threshold, only balances in other bank accounts may be subject to enforcement, the ministry said.
The policy reflects growing concern that aggressive debt collection has left low-income households, small business owners and young adults exposed to sudden financial shocks. By ring-fencing a minimum level of income, the government aims to ensure that debt enforcement does not undermine access to basic necessities such as housing, food and utilities.
The decree also expands protection across other income categories. The portion of wages shielded from seizure will rise to about $1,900 per month, while exemption limits on insurance payouts are being increased. Death benefits will be protected up to roughly $11,400, and maturity or surrender refunds up to about $1,900.
Justice Minister Jeong Sung-ho said the revision is intended to “provide stronger protection for debtors and their families” and to support economically vulnerable groups, including self-employed business owners and younger borrowers struggling with debt. The changes, he added, are designed to help individuals stabilize their finances and reenter economic life, rather than remain trapped in a cycle of enforcement and insolvency.
The move comes as South Korea grapples with elevated household debt and uneven income recovery following years of inflationary pressure and higher interest rates. By recalibrating enforcement rules, policymakers are signaling a shift toward balancing creditor rights with social stability—an approach that prioritizes livelihood protection as a foundation for broader economic recovery.
