Incheon City Uses Employment and Industrial Accident Insurance Refunds to Collect Overdue Payments

Incheon City will be the first in the nation to seize unpaid employment and industrial accident insurance refund amounts to collect local tax arrears.

The city announced on the 24th that, following the Personal Information Protection Commission's recent notification that providing information on unpaid refund amounts does not violate the Personal Information Protection Act, it will receive employment and industrial accident insurance refund information from the Korea Workers' Compensation and Welfare Service and begin seizure and collection efforts starting next year.

Earlier, in February, the city requested information on unpaid refund amounts of defaulters from the National Health Insurance Service and the Korea Workers' Compensation and Welfare Service. However, when the Korea Workers' Compensation and Welfare Service refused to provide the information citing lack of precedent and potential violation of the Personal Information Protection Act, the city requested the Personal Information Protection Commission to review whether this constituted a legal violation.

Incheon City Hall

Unpaid employment and industrial accident insurance refund amounts belong to the Korea Workers' Compensation and Welfare Service if corporations or individual businesses do not claim them within the statute of limitations period of three years.

These insurance premiums are refunded annually after year-end tax adjustments, and Incheon City focused on the fact that many businesses that have closed or suspended operations do not claim their refunds, deciding to utilize this as a method to collect arrears.

The city expects that by utilizing employment and industrial accident insurance refund amounts, it can collect more than 40 million KRW annually, and if expanded nationwide, approximately 700 million KRW or more in arrears can be collected.

An official from Incheon City stated, "This measure is a model case introducing a new arrears collection method that can be used nationwide while alleviating the burden on delinquent businesses facing economic difficulties," adding, "Using unpaid insurance refund amounts to cover local tax arrears is also advantageous to delinquent businesses compared to the amounts reverting to the Korea Workers' Compensation and Welfare Service."

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