[Exclusive] High Oil Price Support Payments to Be Based on Income from Two Years Ago... Health Insurance Premium Lag Signals On-Site Confusion

As the government prepares to distribute "high oil price compensation payments," it has been confirmed that the health insurance premium standard used to identify the "bottom 70%" of income earners is based on income from two years ago. This is expected to cause confusion at the local level, as those who experience significant income changes, such as self-employed individuals who become ineligible for the payment, are likely to protest.

Yoon Hojung, Minister of the Ministry of the Interior and Safety (right), is announcing the plan to provide compensation for high oil prices at the Government Seoul Office in Jongno-gu, Seoul, on the 11th. On the left is Lee Seuran, First Vice Minister of the Ministry of Health and Welfare. Ministry of the Interior and Safety.

원본보기 아이콘

According to the Ministry of Economy and Budget, Ministry of Health and Welfare, and Ministry of the Interior and Safety on April 17, the selection standard for the "bottom 70% of income earners" for this round of compensation is the monthly health insurance premium assessed this year. Yoon Hojung, Minister of the Ministry of the Interior and Safety, previously stated, "The 70% of the population eligible for the payment will be selected based on their health insurance premium, but we will also review criteria to exclude those with high-value assets beyond the premium amount. The final selection criteria will be prepared and announced in May."

The Ministry of Health and Welfare will aggregate health insurance premium data from the National Health Insurance Service and provide it to the Ministry of the Interior and Safety, which will then determine the bottom 70% of income earners. The problem is that the current health insurance premium is calculated based on 2024 income. Under the current system, last year's income is finalized after the comprehensive income tax return in May, with the adjusted insurance premium applied from July and reflected beginning in November.

As a result, the payments will be distributed based not on last year's income-which best reflects the current economic situation-but on income from two years prior, making confusion on the ground inevitable. Many complaints are expected, especially from those who have lost their jobs or have closed businesses around the income determination period and thus see their income drop, causing them to miss out on the payment.

A Ministry of Health and Welfare official explained, "Health insurance premiums are adjusted once a year according to actual income from the previous year. For the high oil price compensation payment, which is distributed before the premium adjustment date, there is bound to be an administrative time lag."

A similar issue occurred during the second round of livelihood recovery consumer coupon payments. At that time, recipients were identified using the health insurance premium assessed in June last year, which was calculated based on 2023 income. A total of 168,252 appeals were filed, and 79.2% (139,919 cases) were granted relief. Of all appeals, 25,433 cases (15.1%) were related to health insurance premium adjustments.

원본보기 아이콘

The government plans to accept appeals from those who object to their eligibility for the payments between May 18 and July 17. Both online applications via the National Petition Portal and in-person applications at local Administrative Welfare Centers will be accepted. After review by local governments, applicants will be individually notified of the outcome. This round of compensation, which will be paid differentially according to income and residential area from 100,000 won to 600,000 won, will begin distribution to basic livelihood security recipients and the near-poor-classified as vulnerable groups-starting April 27. The remaining citizens in the bottom 70% income group will be able to apply for payment between May 18 and July 3.

Meanwhile, the specific standard for the bottom 70% income group has not yet been made public, but Park Honggeun, Minister of Economy and Budget, previously stated that the monthly income threshold is about 3.85 million won for a single-person household and 6.3 million won for a two-person household. In terms of health insurance premiums, single-person employee subscribers will be ineligible if their premium exceeds 138,400 won, and two-person households if it exceeds 226,480 won. An official from the Ministry of the Interior and Safety said, "The specific health insurance premium amounts that qualify for the payment will be publicly announced next month."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.