[2nd Supplementary Budget Q&A] Disaster Relief Fund: Who, When, and How Much Will You Receive?

Disaster Relief Fund Excludes 4.6 Million Households with Annual Income Over 100 Million KRW
Cashback "No for Department Stores, Online Shopping, Luxury Stores, Entertainment Bars, etc."

[Asia Economy Reporter Jang Sehee] On the 1st, the government formulated a second supplementary budget bill (supplementary budget) worth 33 trillion won to support COVID-19 damage relief. Disaster relief funds of 250,000 won per person will be provided to households with an annual income of 100 million won or less based on a four-person household standard. If card spending in August exceeds the average monthly card usage in the second quarter by more than 3%, 10% of the increased amount will be refunded as cash-equivalent points. The disaster relief funds included in this supplementary budget are summarized in a Q&A format.

▲Who, when, and how much will receive disaster relief funds?

=If eligible within the lower 80% income bracket, payments can be made as early as mid-August. For a four-person household with an annual income of 100 million won or less, 250,000 won per person will be provided. Approximately 4.6 million households will be excluded from the payment target. The lower 80% income bracket is set lower than 200% of the median income because it also includes those not enrolled in health insurance, such as medical aid recipients. Applying 200% of the median income, the income corresponding to the lower 80% is 9,752,580 won. If payments are made to the lower 90%, the corresponding amount for a four-person family rises to 14,628,870 won. For dual-income couples living at different addresses, each is recognized as an individual household and receives support accordingly.

▲How is income assessed for workplace and regional subscribers?

=The income assessment methods differ for workplace subscribers and regional subscribers. Workplace subscribers working at businesses with 100 or more employees are assessed based on their income from the previous month, while those at businesses with fewer than 100 employees are assessed based on the average monthly income of the previous year. Regional subscribers’ income is comprehensively considered based on 2019 income and property tax payments as of June 2020. The government plans to correct income assessments through an objection procedure.

▲Can health insurance dependents without income receive support?

=For dependents without income, the eligibility criteria differ depending on whether they live separately from the insured person. If the insured person and dependent have different residential addresses, the dependent is considered to have no income and is included in the support target. If they live together, the dependent’s eligibility is determined based on the insured person’s income.

▲What are the exclusion criteria for high-asset individuals?

=Even if health insurance premiums qualify them, high-asset individuals cannot receive disaster relief funds. This is to exclude those with low income but high assets. It is likely that the high-asset criteria announced in April last year will be used. At that time, the government defined high-asset individuals as those with a combined property tax base of 900 million won or more and comprehensive income tax-targeted financial income of 20 million won or more. A property tax base of 900 million won corresponds to a publicly announced value of about 1.5 billion won, which is equivalent to owning a house with a market price of 2 to 2.2 billion won. The exact criteria will be set by the “COVID-19 Coexistence National Support Fund Interministerial Task Force (TF).”

▲How much card spending is required to receive 'cashback'?

=If card spending in August exceeds the average monthly card usage in the second quarter (April to June) by more than 3%, 10% of the increased amount will be refunded as cash-equivalent points. For example, if the average monthly card usage in the second quarter was 1 million won and 1.53 million won was spent on the card in August, 10% of the difference between 1.53 million won and 1.03 million won (which is 50,000 won) will be refunded as 50,000 won in cash-equivalent points. There is no expiration date for using the cashback. Even if multiple cards are held, amounts are combined if the cards are under the same name. The government plans to enable real-time monitoring of individual spending through a computerized system. However, card spending at department stores, large supermarkets, online shopping malls, luxury brand stores, entertainment establishments, and purchases of durable goods such as automobiles and home appliances are excluded. University tuition fees are included.

▲How much support do small business owners receive?

=They receive between a minimum of 1 million won and a maximum of 9 million won. Small business owners affected by COVID-19 are categorized into assembly bans, business restrictions, and management crises to receive the Small Business Hope Recovery Fund. First, assembly bans and business restrictions are divided into long-term and short-term based on quarantine measures from August 16, 2020, to June 30, 2021. They are also categorized based on 2020 annual sales of 80 million won, 200 million won, and 400 million won. For example, businesses with sales of 400 million won or more in 2020 and long-term damage receive 9 million won, while those with short-term damage receive 7 million won. Businesses in management crisis sectors with sales decreased by 40% or more receive 3 million won if sales were 400 million won or more in 2020, and 1.5 million won if sales were less than 80 million won. The long-term and short-term criteria will be announced later by the Ministry of SMEs and Startups. Applications for support can be submitted online through the website.

▲Will consumption coupons and vouchers be reissued?

=Six major consumption coupons and vouchers will be issued, including movie coupons (6,000 won per ticket), railroad and bus coupons (50% round-trip discount), sports coupons (30,000 won monthly usage fee refund), integrated cultural vouchers (100,000 won annually for low-income groups), professional sports tickets (discounted), and agricultural and marine product coupons (up to 20%). After the target of 70% of the entire population completes the first vaccine dose, expected around September, full use both online and offline will resume.

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