They Plan to Give Disaster Relief Funds to Street Vendors...Concerns Over Income Verification Difficulties and Fairness Controversy

Difficulty in Verifying Damage and Confirming Business Status
Some Criticize as "Populist Welfare Policy"

Gangnam-daero Corporate Street Vendor. Photo is not related to the article.

[Sejong=Asia Economy Reporter Kim Hyunjung] The ruling party's mention of street vendors and platform workers as recipients of disaster relief funds for COVID-19 affected groups has complicated the government's calculations, which had been considering "thorough selective support." Experts point out that the disaster relief funds have lost their basis and logic and have crossed into the realm of politics.

On the 17th, according to the Democratic Party and the government, the Democratic Party demanded that the government provide the 4th disaster relief fund, which significantly relaxes existing eligibility criteria such as sales standards and income verification, as early as the end of next month. Previously, support for small business owners and self-employed individuals was limited to those with annual sales under 400 million KRW, but the scope will be expanded to 1 billion KRW by applying the Small Business Act, and will also include street vendors and platform workers whose income is difficult to verify. Since many recipients are expected to face livelihood difficulties due to the prolonged COVID-19 pandemic, the ruling party has ordered the allocation of a supplementary budget worth 20 trillion KRW before April to provide disaster relief funds. This amount is more than double the previous 3rd disaster relief fund (including quarantine and financial support, 9.3 trillion KRW).

The problem is that including street vendors, whose income is difficult to verify and who were previously excluded from receiving support, makes it difficult to verify the actual damage scale and whether they are actually operating. Even if the current status identified by local governments and the Small Enterprise and Market Service is used as a basis, it is impossible to confirm and verify actual business operations and the extent of damage. There is no operational status or income (tax payment) information through Statistics Korea or the National Tax Service, raising concerns about fairness issues and the potential worsening of public opinion.

The government is also in a difficult position. A Ministry of SMEs and Startups official explained, "Street vendors are merchants outside the formal system who have not registered their businesses," adding, "There is insufficient basis to include them as recipients of policy funds." Another government official said, "It is true that street vendors were a blind spot in support, but it is also true that they have consistently been excluded from taxation," adding, "If they become recipients, fairness controversies are expected."

Experts point out that political motives are excessively influencing the disaster relief funds. Professor Kim Taegi of Dankook University's Department of Economics said, "COVID-19 is a superficial reason; the real intention is to win favor from groups in blind spots," adding, "If there had been sincerity, the principle should have been to consider 'damage scale' without discriminating by industry, target, or criteria from the start." Professor Kim added, "For the youth, who have suffered the most damage, the response has been improvised without principles." Professor Hong Woohyeong of Hansung University's Department of Economics criticized, "The disaster relief funds lost their logic from the first payment when looking at the scope and targets," calling it "a populist welfare policy lacking basis."

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