Compensation Payments for Small Business Losses in Q4 2021 to Begin on the 3rd of Next Month

On the 23rd, the Loss Compensation Deliberation Committee convened and approved the '2021 Q4 Compensation Standards'

On the 23rd, Kang Sung-cheon, Vice Minister of the Ministry of SMEs and Startups, is delivering opening remarks at the 9th Loss Compensation Deliberation Committee meeting held at the SME Maru of the Ministry of SMEs and Startups in Sejong City.

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Kwon Chil-seung, hereinafter referred to as the Ministry) announced on the 23rd that it held the 9th Loss Compensation Deliberation Committee and approved the "2021 4th Quarter Loss Compensation Standards."

This compensation standard reflects the results of the first supplementary budget for 2022, passed by the National Assembly on the 21st, and incorporates the demands of small business owners who have been severely affected by the prolonged quarantine measures. Based on the results of this deliberation, the Ministry has issued an administrative notice on the "2021 4th Quarter Loss Compensation Standards, etc." and plans to start accepting and paying loss compensation applications from the 3rd of next month after a six-day notice period.

The loss compensation targets are small enterprises under the "Framework Act on Small and Medium Enterprises" that implemented assembly bans, business hour restrictions, or facility capacity restrictions from October 1 to December 31 of last year, resulting in significant business losses. In the 3rd quarter, only facilities that implemented assembly bans and business hour restrictions were compensated, but this time, facilities that implemented facility capacity restrictions have also been added to the compensation targets. Accordingly, restaurants and cafes, beauty salons, wedding halls and first birthday party specialists, outdoor sports stadiums, etc., that implemented quarantine measures such as leaving one seat empty or limiting the number of people per area are also included in the compensation targets.

The compensation calculation method is basically the same as in the 3rd quarter. It is calculated by applying the quarantine measure implementation period and correction rate to the average daily loss amount in the corresponding month of 2021 compared to the same month in 2019, which was unaffected by COVID-19. However, to provide more substantial compensation, the correction rate and minimum amount have been raised. The correction rate used to calculate damages directly caused by quarantine measures was 80% in the 3rd quarter but has been increased to 90% considering the prolonged concentration of damage on small business owners due to quarantine measures. The quarterly minimum amount has also been raised from 100,000 KRW to 500,000 KRW, allowing small-scale and tax-data-insufficient small business owners to receive more substantial compensation. In the compensation formula, the average values by region and facility will be actively used for small business owners with insufficient tax data, significantly reducing cases where compensation payments were delayed due to the impossibility of pre-calculating compensation amounts.

The 4th quarter compensation will be paid after deducting the 5 million KRW advance payment made in January. If the compensation amount is less than 5 million KRW, the remaining advance payment after deduction will be additionally deducted when paying the 1st quarter 2022 compensation. Applications will be accepted online, just like in the 3rd quarter, to enable the fastest and simplest application and payment possible.

Kang Sung-cheon, Vice Minister of the Ministry, said, "The 2021 4th quarter loss compensation focuses on providing broader and more substantial compensation than the 3rd quarter, considering the accumulated damage to small business owners due to the prolonged quarantine measures," and added, "We will do our best to promptly pay the loss compensation to alleviate the difficulties of small business owners as soon as possible."

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