The Democratic Party to Process Loss Compensation Act in June... Resolving Through Damage Support Instead of Retroactive Application or Codification

Yun Ho-jung "Legislation on Compensation for Losses Must Be Passed in June National Assembly"
Instead of Retroactive Application, Provide Substantial Support Through Damage Assistance Method in Loss Compensation Act
"Handle Broadly, Thoroughly, and Swiftly"

[Asia Economy Reporter Oh Ju-yeon] The Democratic Party of Korea has decided to pass the COVID-19 Loss Compensation Act in the June National Assembly session without explicitly including retroactive application. Instead, it will provide corresponding support funds for losses incurred before the law's enforcement.

The government and the ruling party held a party-government consultation on the Loss Compensation Act at the National Assembly on the morning of the 7th, emphasizing this direction. Floor Leader Yoon Ho-jung said in his opening remarks, "We will definitely pass the legislation related to loss compensation in the June National Assembly," adding, "There should be no further delays in actual compensation and support due to a single phrase about retroactive application."

The biggest issue in the party-government consultation that day was whether to explicitly state retroactive application of loss compensation. So far, government departments such as the Ministry of SMEs and Startups and the Ministry of Economy and Finance have opposed legislating retroactive application due to fiscal burdens. They argued that it would incur enormous administrative costs and could cause fairness issues with general industries not subject to gathering bans or business restrictions.

Yoon Ho-jung, the floor leader of the Democratic Party of Korea, is speaking at the party-government consultation on the Small Business Loss Compensation Act held at the National Assembly on the 7th. Photo by Yoon Dong-ju doso7@

Ultimately, the Democratic Party stepped back and decided to pass the Loss Compensation Act in the June National Assembly without the retroactive application clause. However, they agreed to separately prepare corresponding support. Leader Yoon emphasized, "We will discuss establishing a legal basis for loss compensation and damage support not only for future losses but also for damages already incurred, so that broad and substantial support can be provided," adding, "We will focus on creating reasonable standards that small business owners and self-employed people can feel."

Song Gap-seok, the ruling party's secretary of the Industry, Trade, and Energy Committee, told reporters after the party-government consultation, "There are two types of retroactive application: retroactive application under the 'Loss Compensation Act' and retroactive application through 'damage support.' Currently, the party and government have agreed to broadly, substantially, and promptly apply the 'damage support' method to embody the meaning of retroactivity."

He said, "Support will be extended broadly to 16 industries in business crisis beyond the 8 industries subject to administrative orders, including ultra-low interest loans, and the supplementary budget will include support urgently needed by small business owners," adding, "Regarding promptness, if the Loss Compensation Act method is used, the 8 industries subject to administrative orders will inevitably have some past damage support delayed until October or November this year. This creates a blind spot where those currently struggling cannot receive support through the damage support supplementary budget method. Therefore, the party and government agreed to proceed with the retroactive method as damage support."

The ruling party will resume reviewing 26 bills related to loss compensation with the opposition at the Industry, Trade, and Energy Committee subcommittee meeting on the 8th, based on the final plan derived that day. However, given that retroactive application has been discussed up to last month's legislative hearing in the committee, it is uncertain whether the subcommittee meeting held with this unified party-government plan will proceed smoothly. Choi Seung-jae, a People Power Party lawmaker who was hospitalized after a hunger strike demanding retroactive application of the Loss Compensation Act, criticized on Facebook that day, "Retroactive application is necessary to protect the property rights, business rights, equality rights, and dignity of self-employed people," adding, "Loss compensation should no longer be a matter of consideration and generosity under the name of support."

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