Beauty Businesses and Wedding Halls Also Included in Loss Compensation... Minimum Amount Raised from 100,000 to 500,000 Won

Ruling Party and Government Prioritize Support for Small Business Owners' Losses
Expansion and Relaxation of Loss Compensation Law Criteria Due to Capacity Limits
Recognition of Indirect Business Losses
Deputy Prime Minister Hong Nam-ki: "All Existing Budgets, Funds, and Contingency Funds Will Be Fully Mobilized"

Prime Minister Kim Boo-kyum is delivering a speech at the Central Disaster and Safety Countermeasure Headquarters (CDSCH) emergency meeting on COVID-19 held at the Government Seoul Office in Jongno-gu, Seoul on the 16th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporters Kim Hyun-jung (Sejong), Son Seon-hee (Sejong), Park Joon-i, Song Seung-yoon] As the government strengthens social distancing measures once again, the ruling party and government are putting their utmost effort into supporting small business owners affected by the restrictions. In response to strong backlash from self-employed individuals who are missing out on the year-end peak sales season, the government is attempting to ease tensions through a fiscal support plan worth around 100 trillion won and by relaxing the criteria for loss compensation payments. The government prioritizes loss compensation and has also proposed a quarantine support fund card.

Prime Minister Kim Boo-kyum said on the 16th at the Government Seoul Office, "We apologize once again to the small business owners and self-employed who will have to endure hardship," adding, "The government intends to provide loss compensation for direct damages caused by business hour restrictions and also offer more substantial support under the name of a 'quarantine support fund' to address practical difficulties arising from the expansion of the vaccine pass system." Although related damages will be compensated later under the Loss Compensation Act, the intention is to provide immediate relief through cash support.

◆Increasing Loss Compensation Resources and Relaxing Payment Criteria= In particular, the government plans to expand and significantly relax the compensation criteria under the Loss Compensation Act, which have so far focused on business hour restrictions and gathering bans, to include capacity limits. Indirect business losses, such as those caused by the expansion of the vaccine pass system that effectively prevents unvaccinated individuals from using facilities, will be recognized as compensable damages.

The government will first expand the quarantine measures eligible for small business loss compensation from existing gathering bans and operating hour restrictions to include capacity restrictions at facilities. Industries such as beauty salons, amusement parks, and wedding halls are expected to be included in the compensation targets. The minimum compensation amount will also be raised from 100,000 won per quarter to 500,000 won to provide more substantial loss coverage.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki also expressed his intention to fully mobilize existing budgets, various funds, and contingency funds to focus on supporting small business owners affected by the strengthened quarantine measures. At an emergency economic central countermeasure meeting held at the Government Seoul Office, Hong said, "We will prioritize the implementation of special year-end and New Year quarantine measures, focus on supporting small business owners and others affected, and maximize economic resilience within the scope of quarantine." He added, "While concerns about the downturn in domestic demand due to the pause in phased daily recovery are significant, the urgent need for strict quarantine control is even more pressing. Regarding support for small business owners, we will mobilize all existing budgets, various funds, and contingency funds to provide multi-layered maximum support, including quarantine support fund payments, expanded loss compensation, and ultra-low interest loans."

The government plans to announce additional details on the level and targets of support funds soon after consultations among related ministries such as the Ministry of Economy and Finance and the Ministry of SMEs and Startups.

In the political arena, not only the ruling party but also opposition parties have joined calls for strengthened support. There is speculation that the opposition may respond positively to the ruling party's proposed 100 trillion won-scale COVID-19 fiscal measures. Kim Jong-in, the head of the People Power Party's election campaign committee, held a press conference on the same day and said, "We should first use the existing quarantine budget and government contingency funds to urgently compensate self-employed individuals for damages, and if resources are still insufficient, we should consider supplementary budgets that this government must implement over the next three months." He added, "Since this cannot be resolved by previous complacent methods, efforts to reorganize the quarantine system are necessary." Regarding the specific scale and costs, he said, "It depends on the current government's analysis."

The spread of COVID-19 and the strengthening of quarantine measures are deepening the worries of self-employed workers. On the 16th, an employee is wiping a table at a restaurant in Jung-gu, Seoul. Photo by Moon Honam munonam@

◆"We Hired Staff... It's the Peak Season..." Self-Employed Voice Strong Criticism= Although the government has promised active loss compensation, self-employed individuals who are missing the year-end peak season are strongly protesting. Some self-employed communities and group chat rooms have even expressed extreme reactions, such as attempting self-immolation or terrorism against government agencies.

Self-employed groups are preparing for collective action. The 'COVID-19 Response National Emergency Committee of Self-Employed,' which has led several nationwide vehicle protests, immediately announced a large-scale rally of self-employed people nationwide following the government's announcement on the 15th to strengthen social distancing measures. The committee warned, "You will clearly see through this protest that our breaking of silence and taking steps again is solely due to their neglect." They demand the abolition of the vaccine pass and business restrictions and oppose the expansion of the Labor Standards Act to apply to businesses with fewer than five employees.

On the first weekend after entering the phased daily recovery (With Corona) on the 7th, officials from the Korea Federation of Self-Employed held a press conference near the National Assembly in Yeouido, Seoul, opposing the vaccine pass, urging against the introduction of the vaccine pass, opposing consumer coupons, and calling for practical compensation. Photo by Moon Honam munonam@

The upcoming rally is expected to include other self-employed organizations, including the Federation of Small Businesses. The COVID-19 Victims Self-Employed General Federation, formed by 20 industry groups such as food service, entertainment, and academies, plans to hold relay-style nationwide condemnation rallies in Busan and Gwangju and a large-scale condemnation rally in Seoul. They are preparing to file a large-scale collective loss compensation lawsuit against the government and are organizing a signature campaign targeting one million signatures and a national fundraising campaign to support self-employed individuals.

The recently launched National Federation of Self-Employed issued a statement saying, "We will unite with numerous organizations advocating for the survival, rights, and freedom of small business owners and the self-employed," and warned, "We will also carry out nationwide violent actions." Additionally, other industry groups that had been silent since the start of phased daily recovery (With COVID-19) are gradually releasing statements and announcing response plans.

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