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Video Description

Type: KIHASA RESEARCH ON

Topic: What Is Income Reversal and How It Happens? (@ Single-Parent Families Support Programs) - KIHASA RESEARCH ON

Based on the KIHASA research report: Time and Economic Resources of Single-Parent Families and Policies  

https://repository.kihasa.re.kr/handle/201002/47363

Transcript:

Have you heard of ‘income reversal’?

Income reversal occurs when a public assistance recipient ends up with a higher total income than a non-recipient who earns more from work.

The term is usually used to explain the redistributive effects of income transfers. However, in the context of single-parent family support programs, income reversal can also describe a structure in which increases in earned income or assets lead to the loss of welfare benefits, resulting in greater livelihood instability.

Why does this happen? It stems from an ‘all-or-nothing’ benefit structure, in which crossing a certain threshold triggers a sharp loss of benefits. This creates a policy distortion in which active efforts toward economic independence become disadvantageous.

How, then, can current single-parent support programs―which aim to promote stable family functioning and economic independence―be redesigned to better balance protection and independence and to address gaps in care?

For more details, please refer to the KIHASA’s research report.