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Seoul hopes to soften economic impact with cash subsidies

Second supplementary budget bill is being prepared

President Moon Jae-in speaks at the economy meeting on Monday. Yonhap
President Moon Jae-in speaks at the economy meeting on Monday. Yonhap

South Korea will offer up to 1 million won ($820) in disaster relief subsidy to households as part of the efforts to soften the economic impact of the COVID-19 pandemic, President Moon Jae-in revealed Monday.

The government plans to submit a bill for another supplementary budget to raise the required funds.

Speaking at an emergency economy meeting, Moon said that the subsidies will be given to households in the bottom 70 percent income group. The amount will vary depending on the number of people in a household, while a maximum of 1 million won will be given to those with four or more people.

In total, about 14 million households are eligible for the subsidy, requiring 9.1 trillion won.

“In collaboration with local governments, we have decided to provide disaster relief funds to the bottom 70 percent income group, including the middle class,” Moon said, saying that it was not an easy decision.

He went on to ask for the understanding of those ineligible for the subsidy, saying that the government needs to conserve the means to respond to further economic impact.

Moon added that the government plans to submit the second supplementary bill quickly with the aim of having it processed by the National Assembly immediately after the April 15 general elections.

At the meeting, he also said that the pandemic’s impact on the global economy cannot be estimated, and that the government will deal with immediate issues, while preparing to deal with the long-term effects.

According to the Ministry of Economy and Finance, the central and local governments will foot 80 percent and 20 percent, respectively, of the costs, and the central government’s supplementary budget bill will be about 7.1 trillion won.

Saying that the government plans to submit the bill as quickly as possible, Finance Minister Hong Nam-ki also urged the parliament’s cooperation in processing the bill.

In addition to the subsidy, he revealed a number of measures including reducing the national health service and national pension payments for those whose income have been affected by the outbreak.

In addition, small businesses with 30 or less employees will be given three-month extensions on employment and industrial accident insurance payments.

By Choi He-suk (