Koreans to receive 150,000 won cash handouts starting July 21

Shoppers walk around Namdaemun Market in Seoul's Jung District, June 22. Yonhap

The government will begin distributing at least 150,000 won ($110) per person starting July 21 in a bid to boost domestic spending and revive the sluggish economy. The payments, which will also be extended to some foreign residents and refugees, are a key element of the Lee Jae Myung administration's first supplementary budget.

Under the plan, all Korean citizens registered as residents as of June 18 will receive the payment. Additional support will be provided based on income levels — households near poverty and single-parent families will receive up to 300,000 won, while recipients of the basic living allowance can get 400,000 won.

Residents in nonmetropolitan areas outside of Seoul, Gyeonggi Province and Incheon will receive an extra 30,000 won. Those living in 84 government-designated rural communities facing severe population decline will receive an additional 50,000 won.

According to the Ministry of the Interior and Safety, foreign residents are technically excluded from the cash handouts. However, several key exceptions apply.

Foreign nationals are eligible if they are listed on a resident registration record alongside at least one Korean citizen and are enrolled in the national health insurance system, either as primary subscribers or dependents. Entirely foreign households may also qualify if they include permanent residents (F-5 visa holders) or marriage migrants (F-6 visa holders) who meet the health insurance requirements.

For the first time, refugees (F-2-4 visa holders) are included in the program — a move that follows a March 2024 ruling by the Constitutional Court, which found the government's exclusion of refugees from the 2020 COVID-19 relief payments unconstitutional.

The cash handout initiative follows the Cabinet’s approval of a 31.8 trillion-won ($23.3 billion) supplementary budget on Saturday, passed by the National Assembly the previous day.

The program, officially called the "livelihood recovery consumption coupon," is widely seen as Lee's first major economic policy since taking office on June 4.

Residents can apply for the cash coupons online or offline from July 21 through Sept. 12. The funds can be loaded onto credit or debit cards, prepaid cards or issued as local gift certificates. Coupons will be valid until Nov. 30, after which any unused amount will be reclaimed by the government.

Kim Min-jae, acting minister of the Interior and Safety, and senior officials from the finance and welfare ministries announce the cash handout program at Government Complex Seoul, Saturday. Yonhap

Funds must be used within the recipient's local jurisdiction. For example, Seoul residents can only use them within Seoul, while Gyeonggi Province residents must spend them within Gyeonggi. If the coupons are issued in a special governing city such as Sejong, they can only be used within that city.

Eligible stores include restaurants, grocery stores, hair salons, optical shops and other neighborhood businesses with annual revenue of 3 billion won or less.

To meet the program's goal to promote spending at small, local businesses, the coupons cannot be used at large corporate retailers, department stores, duty-free shops, online platforms and delivery apps. Exceptions may be made for in-person payments through delivery apps.

Local franchise brands' eligibility depends on the store's ownership. Only independently owned branches qualify for coupon use, not the stores run directly by corporate offices.

As such, brands like Starbucks and the beauty chain Olive Young, which operate only corporate-owned stores nationwide, are not eligible for the coupon. Brands with a mixed ownership model, such as retail franchise Daiso, may accept the coupon depending on the ownership of each store.

Participating businesses will post signs indicating whether coupons are accepted, the interior ministry said.

The government has also excluded large foreign-owned retailers to avoid a repeat of controversies during the COVID-19 pandemic, when state disaster relief funds were spent at luxury brands and foreign companies such as Apple and IKEA.

A second round of payments, set for distribution between Sept. 22 and Oct. 31, will provide an additional 100,000 won to the bottom 90 percent of income earners. Eligibility will be determined through income screening based on national health insurance premiums, with criteria to be announced in September.

President Lee Jae Myung visits a traditional market in Ulsan, June 20. Courtesy of presidential office

The selective payment scheme is seen as policy shift for the president, a longtime advocate of universal basic income.

As mayor of Seongnam, Lee launched a program granting 1 million won in local vouchers to all 19 to 24-year-olds, regardless of income. As Gyeonggi Province governor, he rolled out a disaster relief fund that gave 100,000 won to every resident.

During his presidential campaign, Lee pledged 250,000 won for every citizen.

But after taking office, concerns over fiscal sustainability prompted calls for a more targeted approach. Lee has shifted toward a mixed approach, emphasizing that the payments are intended to spur consumption, rather than focusing on welfare.