Government "Broad Discussions Underway on Fiscal Soundness Measures Including Reduction of Repeated Unemployment Benefit Recipients"

Discussion on Limiting Number of Benefit Reductions, Setting Waiting Periods, and Administrative Actions for Employers
Labor Unions Demand "Employer Penalties" Opposing Benefit Reductions... Government "Carefully Reviewing"

On February 3rd, amid the deepening employment shock caused by the prolonged COVID-19 pandemic, a citizen visiting the Nambu Employment Center in Yeongdeungpo-gu, Seoul, is seen moving toward the unemployment benefits application consultation desk. Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok] It has been confirmed that the Employment Insurance System Improvement Task Force (TF), consisting of labor, management, and experts, is reviewing measures to stabilize the employment insurance fund, including a proposal to partially reduce repeated claims for unemployment benefits. The goal is to announce the stabilization plan as early as the first half of the year, but there are many disagreements within the TF, so it is expected that an announcement in the first half may be difficult.

A Ministry of Employment and Labor official said on the 16th, "The TF is discussing measures to improve repeated claims for unemployment benefits," adding, "Various proposals, including a reduction plan for unemployment benefits and penalties for employers demanded by the labor sector, are being broadly discussed."

One of the proposals currently being discussed is to increase the reduction rate according to the number of times unemployment benefits are claimed. It is known that the TF has mentioned rates such as a 10% reduction for three or more claims within five years, 30% for four claims, 40% for five claims, and 50% for six claims. In addition to reductions, proposals such as limiting the number of claims, setting waiting periods for receipt, and administrative measures against employers have also been suggested.

It is true that the Ministry of Employment and Labor is accelerating efforts to prepare countermeasures for repeated unemployment benefit claims and to stabilize the fund’s finances. On the 4th, at the confirmation hearing for the ministerial nominee, Minister An Kyung-duk said, "I think repeated claims for unemployment benefits are problematic," and "I will promptly prepare specific measures."

Also, in its major work plan announced in February, the Ministry stated that it would prepare a financial stabilization plan within the first half of this year. However, there are also opinions that it is uncertain whether the plan can definitely be prepared within the first half.

A Ministry of Employment and Labor official said, "We are still in the stage of gathering opinions from labor and management, but since it is true that the work plan for this year includes preparing a financial stabilization plan, we intend to prepare the plan promptly."

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