Unclear eligibility for 2nd emergency relief fans concerns

A traditional market is seen nearly empty due to stricter social distancing guidelines in Seoul and the surrounding areas effective until Sept. 6. Yonhap

'Tailored approach needed, not blanket assistance'

By Lee Kyung-min

Debate continues over the government's plan to help low-income earners hit hard by the COVID-19 pandemic for its alleged lack of clear eligibility guidelines on seeking up to 2 million won ($1,680) in cash-equivalent assistance.

No easy, equitable-for-all rule is expected because not only decreases in sales volume or income, but also asset value should be factored in, complicating the process that has to find the best way to use about 7 trillion won in the fourth extra budget to be drafted to help those including ones suffering due to recently strengthened social distancing rules.

Experts say the degree and extent of the virus-triggered economic hardship should be measured in the most accurate and socially agreeable way possible to limit repercussions.

The ruling Democratic Party of Korea (DPK) and the government agreed that up to 2 million won in financial assistance should be given to contract-based workers widely referred to as “special contract workers.”

Also to be helped are the self-employed whose business have nosedived due to the continued Level 2.5 social distancing, defined by a ban on gatherings of 10 or more people and reduced opening hours or an outright shutdown in 12 designated education and entertainment facilities including cram schools, gyms, pubs, coffee shops and karaoke establishments, among others prone to mass virus infection due to poor ventilation.

Over 770,000 “special contract workers” will be able to receive up to 2 million won in installments of 500,000 won over up to four months. This is up by 500,000 won from the 1.5 million won they received in May as part of the first round of emergency relief package. Whether there should be limits to seeking the one-off benefit will be determined by the employment ministry.

Data compiled by the National Tax Service on changes in the income of small merchants will be used to help determine eligibility, according to chief presidential secretary for policy Kim Sang-jo.

“The government will find a way that spares many of the adversely affected the time and effort needed to seek the relief funding via the removal of administrative inefficiency,” he said during an interview on a current affairs radio program, Tuesday.

Low-income workers not subscribed to state-run employment insurance and therefore left out of unemployment benefits include chauffeurs, insurance planners, marketing workers paid by the number of new loan takers they land, golf caddies, workers contracted with private education material publishers, delivery workers, messenger service workers and concrete mixer drivers. They are eligible to seek industrial accident claims with the Korea Workers' Compensation & Welfare Service.

The government assistance to only a select group of people is in line with President Moon Jae-in's approach which he defines as an “inevitable choice” amid limited resources.

“The relief to be provided with the fourth extra bill should maximize the intended outcome with limited resources and other adverse circumstances,” he said during a meeting with senior officials at Cheong Wa Dae, Monday. “Calls stressing the need to extend the benefit to all certainly has its merit, but government has little room to maneuver due to fiscal soundness concerns,” he added.

The government is highly likely to extend an earlier relief program to help unburden childcare responsibilities of parents with children under seven. Some 400,000 won in gift vouchers could be given, similar to the previous benefit in March. But under the envisioned plan, the cash-like benefit will be expanded to include parents of elementary schoolers, reflecting criticism that their childcare responsibilities were affected just as much as those with kindergarteners due to delays in school openings.

Other assistance in store includes an increase of the maximum amount deductible to help reduce the burden on paying rent, and postponing the due dates for tax and utility bills. Previous measures on lowering borrowing rates and increasing the maximum amount of loans will be extended.

Dankook University economist Kim Tai-gi said blanket assistance should be avoided given that the “vulnerable” group of people widely vary in their income, otherwise a severe backlash would ensue over equitability concerns.

“Some insurance sales workers, for example, have earnings greater than most salaried workers. It is highly questionable whether helping people with considerable assets is the best use of taxpayers' money. Government policies should be pushed ahead with efficiency concerns in mind at all times,” he said.

The government has ruled out a relief package similar to the first one, whereby 14 trillion won was needed to give all households 1 million won in cash-equivalent benefits, due to a rapid increase in government debt relative to the country's GDP.

The government debt following the fourth extra bill will soar to over 847 trillion won, jacking up the debt-to-GDP ratio to 43.9 percent, up from 39.8 early this year before the combined 66 trillion won in four extra budgets was added in.

Meanwhile, a recent poll showed that three out of five said the second relief package was needed, but they remained polarized over who should be eligible for the handouts.

According to a survey conducted by local pollster Realmeter, of 500 men and women aged 18 and over, 60.3 percent said the money was needed, whereas 33.3 said they were against it.

But the opinion was split, with half, or 49.3 percent, saying only those hit hard should be eligible, while the other half, or 45.8 percent, saying the relief funds should be given to everyone. The remaining 4.9 percent said they were unsure.