Each citizen to get at least $108.80 in prepaid vouchers

President Lee Jae Myung presides over a Cabinet meeting at the presidential office in Seoul's Yongsan District, Thursday. Yonhap

The government will hand out prepaid vouchers, ranging from 150,000 won ($108.80) to 500,000 won per person, as a part of its 30.5 trillion won supplementary budget, it announced Thursday.

The voucher program is a part of efforts to stimulate consumption amid a sluggish economy.

The government confirmed the extra budget plan, the first of its kind under President Lee Jae Myung, during a Cabinet meeting. It will submit the extra budget bill to the National Assembly next Monday, hoping to win approval by early July.

Of the 30.5 trillion won, 20.2 trillion won will be earmarked for direct spending aimed at stabilizing people’s livelihoods and revitalizing businesses. The remaining 10.3 trillion won will be allocated to issue treasury bonds and make other advance efforts to curb an anticipated shortfall in 2025 tax revenue.

The government said that out of the 20.2 trillion won, 10.3 trillion won will be allocated to the vouchers. The method of payment can be chosen from gift certificates, prepaid cards, debit cards or credit cards. No cash payments will be available.

Individuals in the top 10 percent income bracket will receive 150,000 won. The remaining 90 percent will get 250,000 won, 400,000 won or 500,000 won, based on their national health insurance premiums and other measurements of wealth.

The program, a mix of universal and income-based payments, is a shift from Lee's initial campaign pledge of providing a uniform payment to all citizens.

The proposal for the extra budget, announced jointly by the Ministry of Economy and Finance and other relevant ministries, came about two weeks after Lee began his term on June 4.

A separate extra budget worth 13.8 trillion won was already approved by the National Assembly on May 1.

But Lee has underlined that additional stimulus measures are urgently needed, to swiftly address the pressing issues for an economic recovery, including sluggish consumer spending.

"It is not acceptable to spend excessively without income, but given a prolonged economic downturn, now is the time to use an additional supplementary budget to stimulate the economy," the president said during the Cabinet meeting.

Second Vice Minister of Economy and Finance Lim Ki-keun, fifth from left, speaks during a press briefing on the extra budget at Government Complex Sejong, Wednesday. Yonhap

In a follow-up press briefing, presidential spokesperson Kang Yu-jung said "the government will do its utmost to ensure that the supplementary budget serves as a catalyst for the economy."

In a separate press briefing, Wednesday, Second Vice Minister of Economy and Finance Lim Ki-keun said the economy "requires immediate action to overcome challenges."

"The longer fiscal support is delayed, the longer the economic rebound will be postponed and the greater the hardship will be for the people,” Lim said.

He referred to Korea’s GDP growth being lower than 1 percent for four straight quarters, including the January-March period this year when the economy shrank 0.2 percent.

Lim expressed hope that the supplementary budget becomes “a priming force for the ailing economy as well as financially distressed individuals and businesses.”

Besides the voucher program, the government will additionally spend 77.8 billion won to issue discount coupons for travel accommodations, movie theaters, art exhibitions, concerts and other cultural performances as well as sports activities.

A total of 2.7 trillion won will be allocated to boost the construction sector, which struggled with lackluster corporate investment in the first quarter of 2025. The corresponding amount will be spent for project financing and public infrastructure projects, among others.

The government plans to spend 1.2 trillion won in total to nurture future growth engines — 900 billion won for startups plus small and medium-sized enterprises (SMEs) and another 300 billion won for the artificial intelligence (AI) and renewable energy sectors.

A total of 1.4 trillion won will be set aside to salvage debt-ridden small business owners. The number of beneficiaries are estimated to be 1.43 million, who will be eligible to receive up to 90 percent reduction in principal, extended periods for repayment and other benefits.

Meanwhile, the government said it will make an all-out effort for a sustainable fiscal policy, over concerns that the new extra budget will aggravate the national debt.

The entire 2025 spending is anticipated to go up from 687.1 trillion won to 702 trillion won.

In turn, the national debt-to-GDP ratio is expected to grow from its current 48.4 percent to 49 percent.

“It is true that the national debt-to-GDP ratio will increase slightly with the new supplementary budget. But based on past examples and international comparisons, we assess that the ratio is not yet at a dangerous level,” Lim said. “We will continue our efforts to ensure fiscal sustainability.”