"Urgent, They Said"... Employment Retention Subsidy Execution Rate Only 6%

Ministry of Employment: "It Takes About a Month from Application to Payment"

Amid the economic instability caused by the novel coronavirus infection, citizens visiting the Seoul Western Employment and Labor Office in Mapo-gu, Seoul, on the 19th are receiving unemployment benefit application consultations as applications increase. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jang Sehee] Although the government expanded the Employment Retention Subsidy last month to minimize the economic shock caused by the novel coronavirus infection (COVID-19), it has been confirmed that the actual budget execution rate was only in the 6% range.

According to government departments on the 14th, out of 470,000 applicants for the Employment Retention Subsidy as of the 13th, only 30,000 people received the subsidy, accounting for just 6% of the total. The total Employment Retention Subsidy amounted to only 20 billion KRW.

Earlier, the Ministry of Employment and Labor announced that as workplaces faced closures and leaves due to the COVID-19 situation, they would pay 90% of the closure and leave allowances to priority support companies such as small and medium-sized enterprises regardless of industry.

Minister of Employment and Labor Lee Jae-gap said at the employment and labor countermeasure meeting for COVID-19 response the day before, "To maintain the momentum for our economy and labor market to recover quickly again, it is important for labor and management to work together to keep employment as stable as possible until we get out of this crisis tunnel," adding, "The government also plans to strongly support efforts to maintain employment through cooperation and concessions between labor and management."

While emphasizing the necessity and urgency of the Employment Retention Subsidy, it was confirmed that actual execution in the field is insufficient.

Regarding this, the Ministry of Employment and Labor stated that there was a delay in execution because it takes time from application to payment. A ministry official said, "The Employment Retention Subsidy is structured so that applications are made before difficulties arise, and payments are received when difficulties occur, so the number of applicants is naturally much higher."

He added, "Currently, the closure payments for February have been made, and some payments for March closures have been issued," and "As closures continue to increase, execution time will take longer and the amount is expected to grow significantly."

Despite the low actual execution rate, the government is considering further increasing the Employment Retention Subsidy as a measure to maintain jobs.

On the 25th of last month, the Ministry of Employment and Labor decided to relax eligibility requirements and increase subsidy amounts for employers who inevitably need to adjust employment due to business damage caused by COVID-19 until the 'national infectious disease crisis alert' is lifted. Currently, they are pushing to temporarily raise the Employment Retention Subsidy support level to up to 90% for all industries from April to June.

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