Heating subsidies expanded to middle-class families

Gss meters on a low-rise residential building in Seoul. [YONHAP]

More people will receive additional subsidies to help them pay their heating bill, the government announced Wednesday.

According to the Ministry of Trade, Industry and Energy, all households that earn 50 percent or less than the median average household income can receive a 592,000 won ($490) discount on their heating bills through March.

As of 2022, the median income of a family of four was 5.12 million won a month. Families that earn 2.57 million won or less will thus receive the discount.

Previously, only to the lowest income families — most of whom get basic livelihood assistance money from the state — received additional energy vouchers and heating subsidies recently provided by the government.

The government announced just a week ago that it was doubling heating subsidies to families on basic livelihood assistance.

Th measures increased energy vouchers for 1.2 million households from 152,000 won to 304,000 won for such households.

The measures also expanded the maximum discount on gas bills from 36,000 won to 72,000 won for socially vulnerable groups, including people with disabilities, single parents, families on welfare, foster care facilities and North Korean defectors.

The ministry said it will actively seek out eligible households that are unaware of the benefits and help them apply for them with the assistance of local governments.

The latest measure was announced after President Yoon Suk Yeol on Monday ordered the government to expand heating bill subsidies to middle income families.

“Given the expected burden in February amid the difficult economic situation and the unprecedented cold, [President Yoon] ordered the government to look into all possible measures,” said Kim Eun-hye, the president’s senior secretary on public relations.

The move was a turnaround from the government’s earlier reluctance to expand its heading subsidies beyond lower income households, in keeping with the administration's fiscal conservatism.

A cabinet meeting approved the allocation of 100 billion won from an emergency reserve budget to help fund the heating subsidies.

Combined with the existing 80 billion won in the budget for heating subsidies, government subsidies for family heating bills now total 180 billion won.

Cabinet meeting are usually held on Tuesdays. However, President Yoon held the meeting a day earlier with public anger over mounting gas bills boiling over.

According to the Korea Real Estate Board’s apartment management information system, the average heating bill for apartments surged 53.9 percent per square meter year-on-year in December.

January's heating bill, due in February, is expected to surge still further given that energy consumption usually increases about 15 percent during the month.

While the unusually cold weather has played a key role in the higher gas bills, the government's aggressive raising of gas bills last year — 42.3 percent over the previous year — is the biggest factor.

The Yoon government said it had no other choice considering the massive losses that the state-owned Korea Gas Corporation (Kogas) was facing due to the previous administration's freezing of gas bills since July 2020, especially as global gas prices surged in the wake of the war in Ukraine.

Kogas accounts receivable totaled 8.8 trillion won at the end of last year, a massive increase from 1.8 trillion won in 2021.

According to the Energy Ministry, LNG prices last year on average surged 128 percent.

The government has recently started stepping back on its push to raise utility bills.

Finance Minister Choo Kyung-ho during a press briefing a week ago said the government will review the appropriate time in raising gas bills.

“The prices of imported LNG have gone up significantly and state-owned companies have accumulated deficits,” Choo said. “We will make a decision on gas bills that takes not only these factors into account, but also the burden imposed on the people.”

President Yoon’s People Power Party is also asking the government to further expand the government’s heating subsidies to middle-income families.

The move would extend the subsidies to everyone except the top 30 or 40 percent.

PPP’s latest request is the result of falling polls.

According to a survey by Realmeter, President Yoon’s support has fallen for the third week, with 37 percent of 1,504 respondents indicating support for the president, down 1.7 percentage points from the week before.

The PPP’s support has dropped 1.6 percentage point to 38.6 percent, whereas support for the rival Democratic Party jumped 2.1 percentage points from the previous week to 45.4 percent despite party leader Lee Jae-myung's legal troubles.

The survey pointed to heating bills as people's greatest concern.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]