Grant program sparks confusionWith many Koreans out of work or facing reduced hours as the economy reels from the coronavirus pandemic, their latest challenge lies in unraveling the government’s nebulous criteria for determining eligibility for emergency relief.
The emergency grants are being provided to 14 million households based on whether they fall inside the government’s definition of the lowest-earning 70 percent. The government last week announced that payments to workers will be based on past national health insurance payments, on a sliding scale depending on the number of people in each household.
But that payment history does not necessarily reflect a worker’s current income, and already, different groups of residents are finding themselves disqualified despite low or no recent income.
“The purpose of the emergency grants is to support those with lower income, to promote spending and thus help out small stores,” said Shin Young-seok, senior research fellow at the Korea Institute for Health and Social Affairs. “[However], it will be very difficult to split those in the lower 70 percent by income, and the ambiguity of those in the borderline of the 70 percent is inevitable.”
Businesses with more than 100 employees are required by law to report their employees’ income to the National Health Insurance Service every month to determine each worker’s insurance bill, of which all companies pay half.
But smaller companies are not required to inform the insurance agency of their employees’ monthly income. As a result, the data being used by the government to determine eligibility could date back to 2018, failing to capture wage cuts or unpaid leave in the past two years.
As of February, there were 1.8 million such businesses, accounting for 20.8 million people whose employers cover half of their health insurance payments.
One 38-year-old man in the travel industry, which has been hammered by the pandemic, said he went on leave in March after business dropped off to nearly zero. The small travel agency he worked for still paid him 70 percent of his regular wage, said the worker, who spoke on condition of anonymity.
But when the business asked for employees to volunteer for unpaid leave, he felt he had no choice.
Hoping he could count on the government’s emergency grants to workers to keep him afloat, he said he’s among many out-of-work Koreans who have been unable to determine whether they qualify for the government’s emergency grants.
Further complicating the issue are the regional insurance subscriptions, used mainly by self-employed and elderly people. These plans calculate insurance payments are based on apartments, vehicles and other personal property.
Some of these are elderly residents without income, who could be denied the emergency grants based on their apartment values.
And many elderly Koreans are in an especially precarious financial situation, with the government having suspended job programs for people 65 years of age and older. The job programs employ roughly 750,000 people, providing them with up to 250,000 won ($200) per month.
The government’s program has also attracted criticism from self-employed people, who are also regional insurance subscribers. Their insurance payments from last year could disqualify them from the relief package, even though many small businesses have been wrecked by the Covid-19 outbreak.
The government on Friday said it plans to come up with additional measures to reflect the current business situation but declined to provide details.
Choi Hyun-soo, a researcher with the Korea Institute for Health and Social Affairs, argued that National Tax Service data should be used to identify those who have been laid off or forced to take unpaid leave, or contract workers whose income has shrunk in the past three months.
The government last week announced its standards for determining recipients of the grants, which start at 400,000 won for single-person households and rise in steps of 200,000 won per additional person. The grants are capped at 1 million won per family.
For those whose insurance is partially covered by their employer, eligibility is determined by whether they fall under the following insurance payment caps: 88,344 won for a single-person household; 150,025 won for two people; 195,200 won for three people; 237,652 won for four people; and 286,647 for five people.
For regional subscribers, insurance payments must fall below: 63,778 won for a single-person household; 147,928 won for two people; 203,127 won for three people; 254,909 won for four people; and 308,952 for five people.
BY SHIN SUNG-SHIK, CHANG JOO-YOUNG AND LEE HO-JEONG [email@example.com]
More in Economy
On the campaign trail
Online courses get failing grades from tech students
Help after the rains
The Gangnam-Gangbuk price gap remains