Government to Distribute Hope Recovery Fund in Third Week of August and Loss Compensation in Mid-October

Plan to Distribute Hope Recovery Funds Starting Third Week of August
Compensation for Losses from July to September to be Paid from End of October

The Ministry of SMEs and Startups announced on the 15th that it held a video conference of the task force for supporting small business owners affected, chaired by Vice Minister Kang Sung-cheon. Photo by the Ministry of SMEs and Startups

[Asia Economy Reporter Kim Heeyoon] The fourth round of COVID-19 disaster relief funds, the Hope Recovery Fund, is scheduled to be distributed starting the third week of August.

The Ministry of SMEs and Startups announced on the 15th that it held a video conference of the task force for small business damage support, chaired by Vice Minister Kang Seongcheon.

The meeting, held at the Government Seoul Office, was attended by directors from the Ministry of Economy and Finance, Ministry of the Interior and Safety, Ministry of Health and Welfare, and the National Tax Service. It was organized to seriously acknowledge the increasing damage to small business owners and self-employed individuals due to the prolonged COVID-19 pandemic and recent strengthened social distancing measures, and to comprehensively review prompt and efficient support measures at the inter-ministerial level.

First, the rapid implementation of the Small Business Hope Recovery Fund was discussed. The Hope Recovery Fund will support small business owners and small enterprises who have been subject to at least one gathering ban or business restriction measure since August 2020, or who belong to management crisis industries such as the travel sector.

Once the second supplementary budget is approved by the National Assembly in July, the business plan will be announced in the first week of August. Then, in the second week of August, the first rapid payment database and disaster relief fund application system will be completed, with payments expected to begin in the third week of August.

The Ministry of SMEs and Startups plans to make the first payment of the Hope Recovery Fund to small business owners included in the previously established Support Plus Fund database who fall under gathering bans, business restrictions, or management crisis industries. Subsequently, by the end of August, a second rapid payment database reflecting the results of the first half VAT filings will be completed for additional support.

Additionally, the small business loss compensation system will be promptly implemented. This system was established to compensate small business owners and self-employed individuals for operational losses caused by COVID-19-related quarantine measures.

On July 7, the amendment to the "Act on the Protection and Support of Small Businesses" was promulgated to institutionalize loss compensation. The system will be officially implemented starting October 8, three months after the promulgation date.

Loss compensation will cover losses incurred from quarantine measures implemented after July 7, the date the law was promulgated. Proportional and customized damage support will be provided according to the extent of the losses.

On October 8, the day the amendment takes effect, a Loss Compensation Deliberation Committee meeting will be held to review specific criteria and methods for calculating compensation amounts, after which the Minister of SMEs and Startups will announce the standards.

Applications for losses incurred between July and September 2021 will be accepted starting mid-October, with compensation payments beginning at the end of October.

To this end, the Ministry of SMEs and Startups, together with related ministries, is preparing detailed business plans and draft notifications to be discussed at the Loss Compensation Deliberation Committee in advance. They also plan to establish the committee and make thorough preparations to immediately proceed with compensation payments after the system’s implementation date.

Furthermore, to ensure rapid and accurate loss calculation through an integrated management system, infrastructure preparations such as system network linkage will be swiftly coordinated with the National Tax Service, Ministry of the Interior and Safety, and others.

Vice Minister Kang Seongcheon of the Ministry of SMEs and Startups said, “We express our condolences for the sacrifices and hardships of small business owners who are suffering increased damage due to strengthened social distancing,” adding, “The government is preparing sufficient and prompt support with its utmost efforts.”

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