3rd Emergency Economic Council Meeting
Government Announces Emergency Relief Payment
The government decided to offer emergency relief payments of 9.1 trillion won to households in the bottom 70 percent income bracket at the 3rd Emergency Economic Council Meeting held on March 30. The government will also expand social security contribution reliefs given to those hit hard by the COVID-19 outbreak. The summary of relief plans is as follows.
Emergency relief payment
Korean households in the bottom 70 percent income bracket will receive the government’s emergency relief payments of up to 1.0 million won.
- A total of 14 million households to become recipients
- Payments to vary according to the household members: 0.4 million won (single-person households), 0.6 million won (two-person households), 0.8 million won (three-person households), 1.0 million won (four-person households)
- Payments to be made in online and offline gift certificates issued by local governments
- A total of 9.1 trillion won to be spent: About 7.1 trillion won worth of another supplementary budget to be drawn up, and about 2.0 trillion won to be funded by local governments
- Some of the 2020 budget to be cut to finance another supplementary budget worth 7.1 trillion won
Social security contribution reliefs
The government will expand the social security contribution reliefs as it will offer 3 month payment deferrals and 30 percent contribution cuts. The deferrals and cuts will be applied to contributions for March and on.
1) National HealthCare contributions
- Current reliefs: Give 50 percent cut in contributions for three months to those in the bottom 20 percent income bracket and bottom 50 percent in hard-hit areas[1]
- Expand to bottom 40 percent and give them 30 percent reduction for three months[2]
2) National Pension contributions
The government will adopt a long installment payment plan rather than a payment exemption, for citizens are to receive their pension benefits according to the contributions they made.
- Temporarily expand the eligibility for the contribution relief
- Allow up to 60 month installment payment
3) Unemployment insurance contributions
- Give a three-month payment deferral to small businesses with less than 30 employees: 6,120,000 employees and 2,280,000 businesses, around 44 percent of the total unemployment insurance holders, to receive the payment deferral
4) Industrial accident compensation insurance contributions
- Give a payment deferral and contribution cut to small businesses with less than 30 employees and individual holders of the insurance, such as the self-employed and contract employees
- Reliefs to contain a three month payment deferral and 30 percent contribution reduction for six months
A total of 7.5 trillion won worth of payment deferrals and 0.9 trillion won worth of contribution cuts are expected due to the reliefs. The government will also provide a 1.3 trillion won worth of electricity bill payment deferral, which will be given to 3,200,000 small businesses and 1,570,000 low income households for three months from April to June.
