Corona Loss Compensation '6 Million Won' Likely to Be Paid Differently... Announcement in the Afternoon

Differentiated Payments up to 6 Million KRW by Loss Scale
Payment Targets '3.2 Million+a'... Considering Blind Spots
Financial and Tax Support Combined... Announcement This Afternoon

Ahn Cheol-soo, Chairman of the 20th Presidential Transition Committee, is attending the 17th Special Committee on COVID-19 Emergency Response meeting held at the Transition Committee office in Samcheong-dong, Jongno-gu, Seoul, on the afternoon of the 27th. Photo by Yonhap News

The scale of quarantine support funds to be provided to small business owners and self-employed individuals affected by COVID-19 has been set at 6 million KRW per person. The first supplementary budget under the Yoon Suk-yeol administration for this purpose is expected to be around 33 trillion KRW. Compensation payments are anticipated to be distributed as early as before the local elections. The Presidential Transition Committee (Transition Committee) will announce a COVID-19 self-employed loss compensation plan containing these details on the afternoon of the 28th.

The loss compensation plan to be announced that day is broadly divided into ‘cash, financial, and tax’ support measures. The quarantine support fund paid in cash will be around 6 million KRW. This plan completes the total 10 million KRW support promised by President-elect Yoon by adding 6 million KRW to the first round of support of 1 million KRW last year and the second round of 3 million KRW this year. The number of eligible recipients may increase from the existing 3.2 million people. There is also a proposal to raise the minimum compensation amount from the current 100,000?500,000 KRW to 1 million KRW. Accordingly, up to 7 million KRW is expected to be paid in the early stages of the new government.

The COVID-19 Emergency Response Special Committee has been working for a month since its launch to assess the scale of business losses suffered by small business owners due to government quarantine measures over the past two years since 2020, based on data from the National Tax Service and others. The committee is known to have decided on a direction to provide differentiated payments up to 6 million KRW according to the scale of losses. The intention is to divide the ranges and differentiate the amount of support accordingly.

On the financial side, an ‘emergency financial restructuring plan’ is expected to be prepared to reduce the interest burden on small business owners and extend repayment schedules. The government is also likely to include a secondary interest subsidy plan that shifts non-bank loans of small business owners to bank loans and covers a portion of the interest. Tax support measures under consideration include extending the payment period for local income tax for small business owners and expanding tax credits.

The size of the second supplementary budget for loss compensation and other measures is likely to be 33 trillion KRW. Initially, President-elect Yoon pledged 50 trillion KRW, but considering inflation and fiscal soundness, it is known that the plan has been shaped to create a ‘50 trillion KRW supplementary budget’ by combining the 17 trillion KRW supplementary budget prepared by the Moon Jae-in administration earlier this year. However, the exact size of the supplementary budget will be announced in early next month. According to the Transition Committee, the Ministry of Economy and Finance plans to submit the supplementary budget bill to the National Assembly immediately after the new government takes office. If the supplementary budget bill is approved by the National Assembly next month, payments are expected to be made as early as before the June 1 local elections.

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