114.4 Billion KRW in Government Subsidy Fraud Over 3 Years, Only Half Recovered... Government "Entrusts to KAMCO"

[Asia Economy Sejong=Reporter Son Seon-hee] Over the past three years, there have been 253,000 cases of fraudulent receipt of national treasury subsidies, amounting to 114.4 billion KRW. Among these, the amount recovered was 62.9 billion KRW, resulting in a recovery rate of about 55%. The government has decided to entrust related tasks to the Korea Asset Management Corporation to increase the recovery rate of fraudulent subsidy receipts.

On the 2nd, the Ministry of Economy and Finance held a joint "Subsidy Fraud Recovery Performance Review Meeting" chaired by Second Vice Minister Choi Sang-dae at the Government Sejong Complex, discussing measures to improve the recovery performance of subsidy fraud.

The subsidy budget has steadily increased from 61.4 trillion KRW in 2016 to 102.3 trillion KRW this year. However, as the subsidy scale grows, cases of fraudulent receipt exploiting policy gaps have occurred. The Ministry of Economy and Finance identified the amount of fraudulent receipts between 2019 and 2021 as 114.4 billion KRW. In particular, starting next year, under the 'sound fiscal management' policy, the government will promote restructuring of national treasury subsidy expenditures, reducing the related subsidy budget to 101.4 trillion KRW compared to this year.

Officials from five ministries, including the Ministry of Economy and Finance, the Ministry of Health and Welfare, the Ministry of Land, Infrastructure and Transport, the Ministry of Employment and Labor, the Ministry of Gender Equality and Family, and the Ministry of Trade, Industry and Energy, which account for most fraud detections, also attended the meeting. The government plans to entrust the recovery of unpaid claims that are difficult to collect within the year to the Korea Asset Management Corporation, a specialized debt collection agency, to strengthen post-management of fraudulent receipts and improve the recovery rate. Additionally, management will be strengthened by increasing the frequency of inputting recovery performance data from once a year to twice a year.

Bae Ji-cheol, Director of Fiscal Performance Review at the Ministry of Economy and Finance, said, "We will raise the recovery rate of fraudulent receipts to 70%," adding, "We will encourage not only ministries but also local governments to improve their recovery performance of fraudulent receipts."

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