The ageing of population by low fertility and increase of average length of life is a common trend in almost all the industrialized countries. In Korea the total number of the elderly over age 65 exceeded 484.9million(9.5%) in 2006. Korea is faced with the increasing welfare needs by a rapid evolution of population ageing like this and it is also expected to sharply expand the expenditure of elderly welfare services such as pension, medical expense, care payment. so local governments will financially suffers a difficult conditions in the near future. The purpose of this study is to suggest policy directions and alternatives on welfare finance management in response to aged society.Policy alternatives for improving welfare finance System are pursued in terms of institutional improvements such as establishment of financial share principle among governments, enlargement of local share tax' role in social welfare service, introduction of block grant regarding welfare finance in local government.
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