1375 Cases of Industrial Accident Benefit Fraud in 5 Years... Collection Decision Amount 40.4 Billion KRW, Recovery Rate '11.6%'

Yoon Jun-byeong "Effectiveness of Employment Ministry and Workers' Compensation & Welfare Service Recovery Activities Should Be Enhanced for Fraudulent Beneficiaries and Office-Managed Hospitals with Capability"

On the morning of June 30, a fire broke out at a slaughterhouse construction site in Taein-myeon, Jeongeup-si, Jeollabuk-do, injuring two workers seriously, who were then transported to the hospital. The photo shows the scene of the fire suppression. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] It has been revealed that the number of fraudulent claims for industrial accident insurance over the past five years reached 1,375 cases. The recovery rate of the collection decision amounting to 40.3 billion KRW was only 11.6%.

Status of fraudulent claims and recoveries of industrial accident benefits by year from 2017 to July 2021. (Data provided by Yoon Joon-byung, Office of the Democratic Party of Korea)

According to the 'Annual Status of Industrial Accident Fraud Claims and Recovery' received by Yoon Jun-byeong, a member of the National Assembly Environment and Labor Committee from the Ministry of Employment and Labor, the number of detected fraudulent claims from 2017 to July this year was 1,375 cases. By year, there were 364 cases in 2017, 278 cases in 2018, and 252 cases in 2019, showing a decreasing trend, but it increased to 349 cases last year. This year, 132 cases were recorded up to the end of July.

The annual collection decision amounts for fraudulent claims were 10.4 billion KRW in 2017, 4.6 billion KRW in 2018, 12 billion KRW in 2019, and 11.6 billion KRW last year, totaling 40.4 billion KRW from January to July this year. Of this, only 4.7 billion KRW, or 11.6%, was recovered. The annual recovery rates were 16.9% in 2017, 14.9% in 2018, 12.6% in 2019, and 5% last year, declining each year, and this year it was only 8.6% up to the end of July.

Status of fraudulent claims by type of industrial accident from 2017 to July 2021. (Data provided by Yoon Joon-byung, Office of the Democratic Party of Korea)

By type, fraudulent receipt of insurance benefits was the most common with 1,163 cases (collection decision amount of 12.9 billion KRW), followed by cancellation of initial medical care approval with 116 cases (13.4 billion KRW), administrative hospital and pharmacy fraud with 79 cases (13.8 billion KRW), and manipulation of average wages with 17 cases (250 million KRW). Common methods of fraudulent receipt of insurance benefits included falsely claiming for leave, nursing, or survivor benefits, or fabricating severe care (disability) conditions. Cases of cancellation of initial medical care approval involved fabricating accident circumstances or worker status, or swapping workplaces or injured persons.

Top 10 cases of fraudulent benefit recipients. (Data provided by Yoon Joon-byung, Office of the Democratic Party of Korea)

The problem was revealed to be that the effectiveness of recovery activities by the Ministry of Employment and Labor and the Korea Workers' Compensation and Welfare Service was not high in many cases. For example, one private administrative hospital was ordered to repay 3.55 billion KRW for fraudulent claims and had its real estate subject to provisional seizure, but did not return a single won to the state. There was also a case where an injured person died before repaying 2.34 billion KRW in collection decision amounts for fraudulent insurance benefits, resulting in no recovery at all. Because of this, there are calls to strengthen recovery activities by authorities and to establish fundamental measures to prevent fraudulent claims.

Assemblyman Yoon said, "The Industrial Accident Compensation Insurance Act stipulates that if insurance benefits are received by false or fraudulent means, twice the amount actually paid should be collected, but there have been 1,375 cases of unjustly received industrial accident benefits over five years." He pointed out, "The bigger problem is that the recovery rate is only 11.6%." He emphasized, "More effective recovery measures should be prepared for those who fraudulently claim industrial accident insurance or administrative hospitals with the ability to pay, and ways to prevent long-term arrears should be sought."

Yoon Jun-byeong, a member of the Democratic Party of Korea, questioning at the plenary session of the National Assembly's Environment and Labor Committee. (Photo by Yonhap News)

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