Outline Emerges for 'Selective Payment' 2nd Disaster Relief Fund... Key Is Preventing 'Blind Spots and Gaps'

Freelancers with Poor Working Conditions Also Struggle to Prove Damage
Support Criteria Ambiguous for Those with Short Business Periods or Delayed Openings
Concerns Over Backlash from Pubs and Small Businesses Excluded from Previous Support

[Image source=Yonhap News]

[Sejong= Asia Economy Reporter Kim Hyunjung] The government has outlined plans to selectively provide approximately 7 trillion won in a second round of emergency disaster relief funds in response to the COVID-19 pandemic, targeting vulnerable employment groups, small business owners, and low-income households. The key will be establishing detailed and clear criteria that minimize disagreements and conducting various case studies to ensure no blind spots in support. First, the ruling party, government, and Blue House plan to expedite final consultations with relevant ministries to ensure that support necessary for livelihood maintenance and damage compensation is provided before Chuseok.

On the 6th, the government and ruling party held a high-level meeting at the Prime Minister’s official residence in Samcheong-dong, Seoul, agreeing on a 'selective support' policy prioritizing groups severely affected or low-income households to overcome the economic crisis caused by COVID-19. The fourth supplementary budget for this purpose is planned to be around 7 trillion won, with detailed discussions aimed at passing it through the National Assembly before Chuseok.

◆ How to resolve income information and damage criteria = The first round of emergency disaster relief funds, paid in May, was distributed to all citizens to avoid social conflicts arising from selective support. However, due to difficulties in securing funds amid the prolonged COVID-19 crisis and worsening fiscal soundness, the second round will focus on affected groups. While further discussions are needed on how many citizens will receive the second support and the exact amounts, it is currently known that the amount will likely be decided within 2 million won. The support targets broadly include vulnerable employment groups such as workers in special employment types (emergency employment stabilization funds), small business owners (Small Business New Hope Fund), and low-income households (emergency living expenses). Additionally, the fourth supplementary budget is expected to include support such as child special care coupons, estimated to cost up to 1 trillion won, and increased demand for communication cost support.

Experts agree that for this support plan to be successfully distributed and meet its original goal of damage relief, it is essential to accurately identify income information of workers outside the formal system and clearly establish damage criteria for small business owners. First, there is debate over how to calculate income-based damage for workers outside the employment insurance system, such as special employment workers like private tutors, academy instructors, sports instructors, door-to-door salespeople, academy bus drivers, caregivers, freelancers, micro-business owners, unpaid leave workers, and youth. While a uniform payment plan based on government-set criteria is under discussion, detailed conditions such as work period or region may vary, leading to further debate.

For small business owners and self-employed individuals, some industries among the 12 high-risk facilities subject to gathering bans due to recent social distancing level increases are prioritized for support. The government intends to compensate for losses caused by the gathering ban decisions. High-risk facilities include clubs, room salons, entertainment bars, colatecs, danran bars, emotional bars, hunting pochas, karaoke rooms, indoor standing concert halls, indoor group exercise (intense GX types), buffets, PC rooms, direct sales promotion centers like door-to-door sales, and large academies (over 300 people). The government is expected to support karaoke rooms, buffets, PC rooms, and large academies among these. However, there is concern about collective backlash from related business owners such as pubs, which are not subject to gathering bans but have naturally seen sharp sales declines or have decided to close temporarily, and those excluded from government tax exemption, tax reduction benefits, or dining support programs since the COVID-19 outbreak.

Prime Minister Chung Sye-kyun and Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki are attending the high-level party-government meeting held at the Prime Minister's official residence in Jongno-gu, Seoul, on the 6th. Photo by Moon Ho-nam munonam@

◆ Criticism that the government chose the convenient and easy path = There is also a call for separate measures for small business owners and self-employed individuals who have suffered serious financial losses but find it difficult to prove them. Typical cases include those who opened businesses around the time COVID-19 spread and could hardly operate, making it impossible to estimate sales damage, or those who postponed opening for a long time due to the pandemic and suffered losses without ever running a business. Additionally, many have already closed their businesses due to COVID-19, leading to demands for strengthened re-startup programs compared to existing similar programs. Furthermore, some special employment freelancers face unstable work and income, and their labor environments are so poor that collecting supporting documents is problematic.

There are also criticisms that a system should have been established after the initial COVID-19 outbreak to prepare for the current situation. Choi Hyunsoo, a research fellow at the Korea Institute for Health and Social Affairs, stated, "From the supplier's perspective, the government chose an administratively convenient and seemingly easy path to expedite payments before Chuseok," adding, "There will be another confusing process of application, investigation, verification, and confirmation of support targets amid controversies over selective criteria." He further explained, "The income and asset situations of self-employed and small business owners vary greatly, and transparency and reliability of sales information are crucial, but trust in this area has not been established."

After selective payments are completed, social issues such as increased conflicts between classes or weakened solidarity to jointly respond to COVID-19 are also challenges the government must address. Since the second disaster relief payment plan was proposed, Gyeonggi Province Governor Lee Jae-myung, who has consistently advocated for universal payments, emphasized on his Facebook the day before, "The results of the second selective payment, different from the first, such as public dissatisfaction, conflicts, and damage to solidarity, could be much more serious and dangerous than policymakers expect," stressing, "Therefore, numerous scenarios and alternatives must be carefully and meticulously considered."

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