Yejeongcheo "If Additional COVID-19 Disaster Relief Funds Are Provided, They Should Be Given Mainly to 'Affected Citizens'"

Publication of Case Analysis on Emergency Disaster Relief Fund for COVID-19 Response

[Sejong=Asia Economy Reporter Kim Hyunjung] The National Assembly Budget Office pointed out that the government's emergency disaster relief fund payment criteria in response to the novel coronavirus infection (COVID-19) should be based on the "degree of damage" rather than "income." It also stated that if additional support is needed in the future, selective support measures based on the level of damage should be considered.

In a report titled "Analysis of Cases Related to COVID-19 Emergency Disaster Relief Funds, Focusing on Major Countries and Local Governments," published on the 13th, the Budget Office stated, "The selective support method based on damage criteria best aligns with the original purpose of the disaster relief fund and the principle of equity."

Yoon Yeomun, Budget Analysis Officer of the Budget Analysis Office, and Park Eunhyung, Administrative Budget Analysis Officer, emphasized, "Since this emergency disaster relief fund is urgently implemented in response to an unexpected disaster, whether rapid payment is possible is an important consideration when deciding payment criteria," adding, "However, in preparation for additional support depending on the progress of COVID-19, it is necessary to review selective support measures focused on affected citizens by comprehensively considering damage relevance, equity, and national finances."

The report particularly highlighted issues with the government's current income-based selective support method, stating, "While the universal support method has the advantage of a lower fiscal burden, it is difficult to set an acceptable income standard, and it is challenging to reflect the degree of COVID-19 damage," and added, "Furthermore, equity controversies may intensify due to income reversal, and since payment is based on application, delays in payment timing and administrative costs may also arise."

Regarding the government's plan to set the standard based on the bottom 70% income bracket and use health insurance premiums as a classification criterion, the report pointed out, "There may be equity controversies because the calculation standards differ between workplace subscribers and regional subscribers." Additionally, it noted, "Health insurance premiums are calculated based on the income of the previous year, so they do not reflect this year's income situation after COVID-19," and suggested, "The government has announced plans to prepare supplementary measures so that local governments can decide whether to provide support by reflecting changes in income conditions, so it is necessary to conduct deliberations on this during the National Assembly review process."

The report further argued that since this emergency disaster relief fund is the first domestic case, post-evaluation and supplementary work should be conducted to establish standards for similar future measures. It stated, "It is necessary to conduct post-analysis of economic impacts such as consumption stimulation to leave objective evaluation results," and added, "In Japan, after implementing a fixed-amount benefit in 2009, economic effect analyses were conducted twice in 2010 and 2012, which were used as reference materials when designing the current temporary living support benefit." Furthermore, it noted, "As a significant portion of local government support project funds consists of disaster management funds, the reserves of disaster management and relief funds are expected to decrease significantly," and added, "Since necessary funds may be depleted in the event of disasters such as typhoons and heavy rains in the future, it is necessary to consider supplementary measures together."

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