Democratic Party's Draft Plan for 'Disaster Income'... Differentiated by Monthly Income of 3.76 Million Won and 500,000 Won Standard

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea has outlined a plan to introduce disaster income. For workers, the basic amount is set at 3.76 million won per month for households earning less, and 500,000 won for single-person households, with adjustments based on the number of household members. Approximately 24.5 million people are expected to benefit, with the required budget estimated at around 10 trillion won.

The "COVID-19 Disaster Recovery Income Promotion Group," composed of 51 Democratic Party candidates running outside the party, plans to hold an emergency forum on the 12th in the party leader's conference room at the National Assembly, where they will present this proposal. The presentation was prepared by Kim Min-seok, chairman of the Democratic Party's Inclusive National Vision Committee and representative of the group, and Min Gi, professor of Public Administration at Jeju National University. Party leader Lee Hae-chan and floor leader Lee In-young will give opening remarks, with discussants including Kwon Jeong-soon, Seoul City’s Livelihood Policy Advisor, Lee Han-joo, director of the Gyeonggi Research Institute, and Lee Kwan-hoo, research fellow at the Gyeongnam Research Institute.

The presentation emphasizes that this is not a "disaster basic income" but a "disaster recovery income." It is described as "a pragmatic and gradual approach that differs from unconditional basic income, reflecting fiscal conditions and considering social debates on expanding universal welfare."

They propose enacting the "COVID-19 Disaster Recovery Fund Act." Funding sources include contributions from the general account and surplus funds. They suggest utilizing surplus funds amounting to 13.2 trillion won in 2018 and 2.1 trillion won last year. Deposits from the Public Fund Management Fund can also be used as resources.

Recipients are targeted based on income levels divided into deciles according to health insurance premiums, focusing on the 1st to 6th deciles. For worker households, the standard is an average monthly income of 3.76 million won, and for non-worker households, 3.52 million won. This approach is expected to benefit 24,495,285 people. However, the number decreases when excluding those less affected by COVID-19, such as public officials, public institution employees, large corporation workers, private school faculty, and mid-sized company employees.

The groups currently discussed in supplementary budgets mainly include basic livelihood security recipients and near-poverty groups in the 1st and 2nd income deciles, but this proposal suggests adding about 18 million people in the 3rd to 6th deciles who are non-welfare recipients.

The proposed payment amount is 500,000 won per person, with differentiated amounts such as 900,000 won for two-person households and 1.2 million won for three-person households. The estimated maximum cost is 12.2476 trillion won, but considering exclusions and differentiated payments, it is expected to be feasible around 10 trillion won.

The central government would cover 50-90% of the cost, considering the recipient ratio and financial conditions of local governments.

If enacting the Disaster Recovery Fund Act proves difficult, a second option is proposed to amend the "Disaster and Safety Management Basic Act" to allow the national and local governments to establish a disaster management fund. The required resources, number of recipients, and payment methods would be the same as the Disaster Recovery Fund.

Chairman Kim Min-seok stated, "Prompt action is necessary, so the bill should be introduced as soon as possible," adding, "It should not be difficult to find lawmakers within the party who support disaster recovery income to sponsor the bill."

However, opposing opinions have also emerged within the party. Democratic Party lawmaker Choi Jae-sung said on Facebook that day, "We need to carefully examine the essence of the COVID crisis. We must assess how long it will last, what will be destroyed and how, and the extent of its impact," adding, "Without such analysis, short-term domestic demand measures like disaster basic income are hard to see as good solutions."

Conservative opposition parties strongly criticize the plan and call for measures to revitalize the market economy. Hwang Kyo-ahn, leader of the United Future Party, said at the party's supreme council meeting that day, "Supplementary budgets are not a panacea. They only temporarily delay the situation with taxes," and urged, "We must temporarily implement bold measures such as corporate tax cuts, sector-specific minimum wage application, and exceptions to the 52-hour workweek."

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