[Exclusive] National Support Fund Usable Only in Resident Si/Gun Areas... Must Be Used by End of December

Available throughout the entire Special Metropolitan City
Limited to city and county units at the provincial level

[Asia Economy Reporter Jang Sehee] Residents of provinces (do) excluding special cities, metropolitan cities, and special autonomous provinces are expected to be able to use the National Support Fund of 250,000 KRW per person only within their resident city or county. For example, Seoul citizens can use the support fund throughout Seoul, but residents living in Suwon, Gyeonggi-do cannot use it in other cities or counties such as Seongnam or Yongin. Experts have expressed concerns that overly restricting the region could reduce convenience.

According to the Ministry of Economy and Finance and the Ministry of the Interior and Safety on the 17th, the inter-ministerial task force (TF) for the COVID-19 coexistence National Support Fund plans to announce detailed criteria and usage locations for the National Support Fund on the 19th, including this information.

A government official stated, "To revitalize consumption within the region, we have decided to enforce stricter regional restrictions," adding, "The usage period is planned to be limited until the end of this year."

Accordingly, residents of special and metropolitan cities such as Seoul, Busan, Daegu, Incheon, Gwangju, Daejeon, Ulsan, Sejong, as well as Jeju Special Self-Governing Province, can use the disaster support fund throughout their resident city or province. On the other hand, those residing in provincial areas such as Gyeonggi, Gangwon, Chungbuk, Chungnam, Jeonbuk, Jeonnam, Gyeongbuk, and Gyeongnam can only use it within the city or county corresponding to their detailed address. For example, residents of Hwaseong, Gyeonggi-do cannot use the fund in other cities or counties within Gyeonggi-do except Hwaseong.

This differs from last year. Last year, the disaster support fund was provided via credit/check cards or prepaid cards and could be used within metropolitan local governments such as cities and provinces.

However, this year, the policy focus is on revitalizing local commercial districts in line with the purpose of disaster support and consumption activation. Looking at the usage method of last year's nationwide disaster support fund, credit/check cards accounted for 66.1%, and prepaid cards accounted for 13.2%. This means 80% of the support fund usage can be controlled through computerized systems.

Local gift certificates operated by local governments will also be actively utilized. In cases where local love gift certificates are not available, such as Sacheon in Gyeongnam or Pyeongchang in Gangwon, the metropolitan gift certificates will specify the ‘corresponding county area’ for use. Last year, 12% of the nationwide support fund was paid in cash, but this year, cash payments will not be made to revitalize the local economy.

The government is preparing to distribute the fund preferably before Chuseok, with the usage period limited until the end of this year. A government official said, "Except for specific reasons, the goal is to execute the fund within this year."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, emphasized, "Since rapid support is most urgent, we will ensure that 90% of the Hope Recovery Fund and National Support Fund are paid by the end of next month."

When ordering through delivery apps, the support fund can only be used if the delivery person carries a portable terminal and makes payment on-site. However, the store must be a member of the local love gift certificate network.

National Support Fund usage is also possible through local government ‘public apps.’ Examples include Zero Delivery Union (Seoul), Baedal-ui Myeongsu (Gunsan), Baedal Teukgeup (Gyeonggi), and Baedal Seogu (Incheon).

Experts point out that the government's disaster support fund usage policy restricts citizens' convenience. Professor Lee In-ho of Seoul National University’s Department of Economics said, "If consumption locations are excessively restricted, convenience may decrease," adding, "Since this is fiscal spending rather than self-consumption, the effect on growth rate improvement is expected to be limited." However, he noted, "Since the fund is to be used by the end of the year, it will have some effect in boosting suppressed consumption."

Meanwhile, the card cashback system promoted by the government to stimulate consumption is expected to select beneficiaries based on expenditures made using the 'Childcare Coupon.' The coexistence consumption support fund refunds 10% of the excess amount if credit/check card usage increases by more than 3% compared to the average monthly card usage in the second quarter, in the form of cash-equivalent points. To increase sales for small businesses and local merchants, consumption at department stores, large marts, online shopping malls, luxury specialty stores, and entertainment bars will be excluded from support.

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