The government plans to raise the threshold for the amount of earned income and child tax credits exempt from seizure in an effort to strengthen income support for low-income households. This measure comes in response to criticisms that the differing standards for seizure exemptions between tax credits and national tax collections have caused practical confusion under the current system.

Currently, under the National Tax Collection Act, the threshold for small-sum property exempt from seizure was raised to 2.5 million won in 2023 to reflect the minimum cost of living. In contrast, the seizure exemption amount for the earned income tax credit remains at 1.85 million won. Consequently, despite being funds meant for basic living, the differing protection standards across statutes have caused confusion among taxpayers, creditors, and financial institutions.

To resolve this issue, the government is reviewing a plan to align the seizure exemption criteria applied to earned income and child tax credits with the level stipulated in the National Tax Collection Act. The core of the proposal is to raise the portion of the tax credit refund protected from seizure to the 2.5 million won level.

The adjustment is driven by the administrative confusion and public inconvenience caused by the differing standards between the National Tax Collection Act and the Restriction of Special Taxation Act. There have also been ongoing criticisms that a structure allowing a portion of the credits—which are intended for livelihood support—to be subject to seizure contradicts the policy's original intent.

The proposed changes are expected to be incorporated into an amendment to the Enforcement Decree of the Restriction of Special Taxation Act, with an anticipated implementation date following the decree's enactment. Although enforcement is tentatively scheduled for the first half of 2026, the exact application date and detailed criteria will be finalized through future legislative amendment procedures.

The government expects that once the system is revised, the protection of minimum living expenses for tax credit recipients will be strengthened, and the confusion surrounding administrative processes related to seizures will be reduced. However, actual eligibility for application and the scope of individual protection may vary depending on the laws in effect at the time of implementation and individual circumstances.

[※ This article explains the government's proposed system improvements and enforcement decree amendment(s). Actual implementation dates and detailed criteria may vary depending on future legislative amendment results. As individual applicability may differ based on circumstances, please refer to official announcements from relevant authorities for accurate information.]