[Changes in the Second Half of 2022] Expansion of Small Business Loss Compensation Eligibility... Adjustment Rate from 90% to 100%

Loss Compensation Adjustment Rate Raised to 100%... Minimum Amount Increased to 1 Million Won

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Lee Junhyung] Starting next month, the scope of loss compensation for small business owners will be expanded to include medium-sized enterprises with annual sales of up to 3 billion KRW. The loss compensation adjustment rate will be raised from the existing 90% to 100%.

The government published a booklet titled "Changes Starting from the Second Half of 2022" on the 30th. This booklet is an easy-to-understand summary of systems and laws that will change from the second half of this year.

First, the government will expand the scope of loss compensation for small business owners to include medium-sized enterprises with annual sales of up to 3 billion KRW. Previously, under the Small Business Act, only small enterprises and small business owners who suffered losses due to government quarantine measures were eligible for compensation. The government plans to include medium-sized enterprises with annual sales exceeding 3 billion KRW in the loss compensation starting from the first quarter.

The loss compensation adjustment rate will also be increased by 10 percentage points from the existing 90% to 100%. This is a follow-up measure in line with the government's policy of "full loss compensation." The minimum amount of loss compensation will double from 500,000 KRW to 1,000,000 KRW. Through emergency support plans such as full loss compensation, the government aims to restore the management indicators of small business owners to pre-COVID-19 levels.

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