Transition Team: "5.51 Million Small Business Owners' COVID-19 Damage 54 Trillion Won"... Compensation Amount Not Disclosed (Comprehensive)

Ahn Cheol-soo Announces COVID-19 Compensation Plan for Small Business Owners and Small Enterprises
"Estimated 54 Trillion Won Damage Over 2 Years Due to Quarantine Measures... Damage Support Payments to Be Issued Immediately Upon Supplementary Budget Approval"
Payments Differentiated by Company and Industry... Specific Payment Amounts Delayed

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Lee Gimin] The Presidential Transition Committee (PTC) has decided to provide immediate compensation payments to 5.51 million small business owners and small enterprises affected by COVID-19 quarantine measures as soon as the supplementary budget bill (supplementary budget) is passed. While the principle of differentiated payments based on the damage to each company and industry has been established, the total compensation amount and detailed payment amounts have been postponed until after the new government takes office.

Since the scale may change during the confirmation process of the supplementary budget, the PTC's role is limited to estimating losses, but criticism is emerging that the plan is only a half-measure due to the lack of specific support details.

On the 28th, PTC Chairman Ahn Cheol-soo announced the small business COVID-19 loss compensation plan at the PTC office in Tongui-dong, Jongno-gu, Seoul.

The PTC's announcement that day focused on explaining the scale of losses suffered by small business owners and small enterprises due to COVID-19 quarantine measures over two years (2020?2021). The PTC estimated losses at approximately 54 trillion won, targeting 5.51 million small business owners and small enterprises according to the Basic Statistics of Small and Medium Enterprises. The PTC's COVID-19 Emergency Response Special Committee estimated this by selecting businesses whose sales decreased in 2019, before the pandemic, and whose operating profits declined due to quarantine measures.

The PTC stated that once the supplementary budget is passed, it will provide differentiated compensation payments by comprehensively considering the scale of each company, the extent of damage, and damage by industry. The current government has already paid a total of 31.6 trillion won to 18.43 million companies cumulatively over seven rounds under the name of damage compensation. The PTC also decided to include travel and performance industries as recipients of compensation payments. Additional support measures will be considered for companies with significant damage.

Along with this, the PTC plans to increase the correction rate and minimum amount of small business loss compensation by June, aiming for full loss compensation. Chairman Ahn emphasized, "We will reform the system into a full loss compensation system that covers all decreases in operating profit," adding, "We will also establish reasonable loss compensation standards to prepare for future pandemics."

However, the PTC did not disclose the total support scale or individual payment amounts that day. The announcement of the differentiated payment method was also postponed until after the new government takes office. It appears that they judged it appropriate to announce after the new government finalizes the supplementary budget. Chairman Ahn explained, "The PTC and the National Assembly have agreed to divide roles, and the PTC's role is to create accurate data on losses and pass it to the National Assembly."

The change from lump-sum payments to differentiated payments has also sparked controversy. According to President-elect Yoon Seok-youl's pledge, it is widely expected that "6 million won per business" will be paid, but there are concerns that capping the maximum at "up to 6 million won" is an attempt to reduce the individual support amount.

However, the PTC maintains that the initially expected "6 million won per business" payment has not been decided. A PTC official said, "What we have done is accurately estimate the scale of losses so far," adding, "We cannot speculate whether more or less support will be provided. The specific amount will be finalized through the supplementary budget process."

Chairman Ahn emphasized, "For full loss compensation, we will provide customized cash support based on loss estimates," and added, "This will ensure fairer payments compared to the existing lump-sum fixed payment method."

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