It Takes 3 Weeks Just to Select the 'Bottom 80%'... Self-Employed Face Controversy Over 'Pre-COVID' Income Criteria [Q&A]

[Asia Economy reporters Son Sun-hee (Sejong) and Jang Se-hee] The government has begun preparing specific criteria for the COVID-19 coexistence national support fund, which provides 250,000 KRW per person. Since the ruling and opposition parties have agreed to process the supplementary budget bill by the 23rd, detailed payment criteria for self-employed individuals and the coexistence consumption support fund (credit card cashback) must be established within three weeks. However, since the cashback application stores are limited and there are issues such as health insurance premiums used as the payment criteria and discrimination against dual-income households, difficulties are expected during the detailed criteria discussions.

On the 5th, the government held a '2nd supplementary budget inter-ministerial task force (TF)' meeting chaired by Deputy Minister Ahn Do-geol of the Ministry of Economy and Finance to review the operation plans and execution strategies of major supplementary budget projects. The TF, organized mainly by the Ministry of Economy and Finance and the Ministry of the Interior and Safety, operates in three divisions: ▲National Support Fund ▲Small Business Damage Support ▲Coexistence Consumption Support Fund. Deputy Minister Ahn urged, "The supplementary budget bill must be passed as soon as possible," and requested, "Please actively respond to ensure swift deliberation and confirmation within the July extraordinary session of the National Assembly."

The government recently submitted a second supplementary budget bill totaling 33 trillion KRW to the National Assembly, including 10.4 trillion KRW allocated for this support fund. However, since detailed payment criteria such as the national support fund and cashback usage locations have not been established, difficulties are expected during the review process. In particular, for regional subscribers such as the self-employed, payment eligibility is expected to be determined based on health insurance premiums calculated from 2019 comprehensive income rather than last year, which is likely to cause controversy. There is expected to be significant backlash, especially from some small business owners excluded from the payment despite suffering significant sales damage due to the COVID-19 pandemic last year.

Below is a Q&A summary based on explanations from the Ministry of Economy and Finance regarding the COVID-19 coexistence national support fund.

-Who will receive how much? What are the differences from last year's 'nationwide disaster support fund'?

▲25,000 KRW per person will be paid to the bottom 80% of households based on income criteria. Unlike last year, when there was a payment cap (a total of 1 million KRW for households of four or more), this year, 250,000 KRW will be paid equally per person with no cap. For example, a household of five will receive 1.25 million KRW, and a household of six will receive 1.5 million KRW. Minor children will receive the payment together with the head of the household, but adults can receive it individually.

-What is the 'bottom 80%' income criterion?

▲It is based on health insurance premiums. Using the June health insurance premiums, which will be finalized on the 10th, the exact premium criteria corresponding to the bottom 80% will be announced after about three weeks of work. A simulation based on May health insurance premiums showed that 180% of the median income level (8,777,000 KRW for a four-person household) was similar to the bottom 80% income group.

-Does the bottom 80% receive the fund while the 81% do not? There are also criticisms that dual-income households are disadvantaged.

▲This is a common issue in all projects that select recipients based on property and income. However, since uniform criteria cannot fully reflect reality, if there is a reasonable cause, we will actively provide relief through an objection procedure. Dual-income households living separately in different cities can be recognized as separate households upon their request. Additionally, the inter-ministerial TF will discuss overall fairness with single-income households.

-Regional subscribers' health insurance premiums are based on 2019. Will high-asset earners among workplace subscribers also receive the support fund?

▲Regional subscribers' health insurance premiums are based on 2019 comprehensive income, so the latest income information is not reflected. Therefore, if comprehensive income decreased last year compared to 2019, submitting related declaration and payment documents will allow recalculation of the health insurance premium for active relief. High-asset earners among workplace subscribers will be excluded through a 'cutoff.' Specific criteria will be announced within this month by the inter-ministerial TF based on property tax standards or financial income subject to separate taxation.

-When can the fund be received?

▲If the supplementary budget bill passes the National Assembly, preparations will be made to pay within one month (as early as late August). Similar to last year, recipients can apply online or offline and choose among credit/debit cards, prepaid cards, or local gift certificates.

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