Ministry of SMEs and Startups Completes Execution of 21.4 Trillion KRW in Loss Compensation Funds

[Asia Economy Reporter Donghyun Choi] The Ministry of SMEs and Startups announced on the 6th that it has paid loss compensation funds amounting to 21.4 trillion KRW to approximately 3.53 million companies from May 30th to the previous day (the 5th). This amount corresponds to about 93% of the loss compensation budget (23 trillion KRW). Starting this week, payments for verification payment applications will begin sequentially.

Following the rapid payment of loss compensation funds that began on May 30th, the Ministry has been accepting 'verification payment' applications from small business owners not included in the rapid payment target since the 13th of last month. So far, about 500,000 companies have applied for loss compensation verification payments.

To determine eligibility for support, the Ministry has established a cooperative system with the National Tax Service and local governments, verifying tax data and compliance with quarantine administrative orders for each company in the order of application.

Final verification has been completed for approximately 338,000 companies that applied during the first week, and notifications and payments are currently underway.

The number of additional companies eligible for payment this time is about 114,000, most of which had difficulty in prior tax data verification because they had never applied for disaster relief funds before.

Among these, about 15,000 companies had received the 1st and 2nd round quarantine support funds but did not meet the sales decline criteria and thus were not included in the loss compensation fund recipients. However, these companies have now been confirmed by local governments and others to have complied with quarantine administrative orders. If recipients of the 1st and 2nd quarantine support funds complied with government measures such as gathering bans (after August 16, 2020) or facility capacity restrictions (after October 1, 2021), the government recognizes the damage caused by quarantine measures and will pay the basic amount (6 million KRW) even if the sales decline criteria are not met.

Additionally, the Ministry plans to recover overpayments that occurred during the execution of the 1st and 2nd quarantine support funds, with pre-notification procedures starting this week. If a company requiring quarantine support fund recovery is included among the loss compensation fund recipients, the recovery amount will be deducted after obtaining consent, and the remaining loss compensation funds will be paid.

Meanwhile, to facilitate applications for small business owners who cannot verify their identity online or belong to digitally vulnerable groups with low internet accessibility, the Small Enterprise and Market Service will conduct in-person application and reception at regional centers by prior reservation for three weeks starting from the 8th.

Applications for loss compensation funds can be made online and offline until the 29th of this month, and appeals will begin to be accepted in August.

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