'COVID-19 Supplementary Budget' Distributes 2 Trillion Won in Consumption Coupons to 5 Million People

Government Releases Supplementary Budget for COVID-19 Response
Consumption Coupons Provided to Low-Income, Children, and Elderly
Loan Interest Rates Reduced and Landlord Support... Relief for SMEs and Small Business Owners

[Sejong=Asia Economy Reporters Kim Hyunjung and Jang Sehee] The supplementary budget (supplementary budget) of 11.7 trillion won announced by the government on the 4th includes a large number of economic stimulus measures separate from quarantine. In particular, the government is focusing on issuing coupons and providing loan support to stimulate consumption intensively in a short period to prevent economic recession. The justification is to support people’s livelihoods, employment stability, and the recovery of small and medium-sized enterprises and small business owners.

◆ Coupons worth 2 trillion won to be distributed to 5 million people = First, 3 trillion won, the largest budget in the supplementary budget support sector, will be spent on stabilizing people’s livelihoods and employment. A representative example is the special care coupon (1.0539 trillion won) and low-income consumption coupon (850.6 billion won) included in the supplementary budget in addition to the previously announced five major consumption coupons (jobs, vacation, culture, tourism, childbirth, etc.).

In the case of the special care coupon, it supports 100,000 won per person per month for households raising children under 7 years old, which is paid separately from the child allowance of about 100,000 won per month. The low-income coupon targets recipients of livelihood, medical, housing, and education benefits. For a two-person household, livelihood and medical benefit recipients can receive 220,000 won per month, and housing and education benefit recipients can receive 170,000 won per month.

In addition, 128.1 billion won and 300 billion won budgets are allocated for job creation and high-efficiency home appliance purchase refunds (up to 300,000 won). To prevent shocks from continuing in the labor market, 487.4 billion won will be paid as additional youth employment incentives, and 79.7 billion won will be distributed as job-seeking promotion allowances of 500,000 won each to low-income groups.

It is expected that a total of 5 million low-income people, elderly, and children will receive consumption coupons through this supplementary budget. Coupons are issued in the form of gift certificates with a usage period of up to 5 years from the date of issuance. Just calculating the local love gift certificates (which can be replaced by Onnuri gift certificates) to be distributed as low-income consumption coupons, special care coupons, and elderly job incentives amounts to 2.0326 trillion won. Although the payment period is limited to four months from April to July, the Ministry of Economy and Finance plans not to adjust the usage period of related gift certificates issued in connection with this supplementary budget. This means that the released money is unlikely to be used to support the economy, which is expected to decline due to COVID-19 this year.

Kim Sang-jo, Chief of Policy at the Blue House, is attending the COVID-19 response meeting of the ruling party, government, and Blue House held at the National Assembly on the 4th, delivering opening remarks. Photo by Yoon Dong-ju doso7@

◆ Lower loan interest rates and landlord support... Lifeline for SMEs and small business owners = Along with stabilizing people’s livelihoods and employment, the two wings of this supplementary budget for economic recovery are the 2.4 trillion won allocated to support the recovery of small and medium-sized enterprises (SMEs) and small business owners. First, with a supplementary budget of 1.2 trillion won, emergency management fund loans with interest rates lower than existing banks will be expanded by 2 trillion won for SMEs and small business owners. The scale of emergency management fund loans from the Small and Medium Business Corporation and the Small Enterprise and Market Service will be increased by 600 billion won and 1.4 trillion won respectively, totaling 2 trillion won, and interest rates will be significantly lowered.

The supply scale of ultra-low interest loans (1.48%) for small business owners by the Industrial Bank of Korea will also increase by 2 trillion won from 1.2 trillion won to 3.2 trillion won, with 167.4 billion won of the supplementary budget used for this. The guarantee and insurance scale required for loans will also support special guarantees totaling 2.3 trillion won, including 300 billion won from the Daegu and Gyeongbuk regional credit guarantee foundations, and 2 trillion won from the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation. The supplementary budget allocates 160 billion won for the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation, and 2.7 billion won for regional credit guarantee re-guarantee institutions.

In addition, 600 billion won has been allocated to support small business owners’ employment retention and the spread of the 'Good Landlord Movement.' Wages will be supported for four months to prevent the dismissal of part-time and other employees, and micro-businesses employing low-wage workers will receive a job stability fund subsidy of 70,000 won per person per month for four months. In this case, including the existing job stability fund of 110,000 won, a total of 180,000 won will be paid. The related supplementary budget is 596.2 billion won. Traditional markets with many 'good landlords' who reduce rent will receive a total of 12 billion won in supplementary budget support for fire safety facilities, etc. In addition, 37.2 billion won has been allocated in the supplementary budget for the recovery of stores closed due to COVID-19 confirmed cases, and 11.5 billion won for supporting online entry of fresh food processing self-employed businesses.

This content was produced with the assistance of AI translation services.