"Won't Accept" Disaster Relief Fund Donations: Where Will They Be Used?..."Funding for Employment Stability Projects"

Following passage in the National Assembly plenary session, payments to low-income households start from the 4th of this month
Tax credit benefits available regardless of donation intention
Donations will be used for employment retention, worker welfare, emergency job creation support, and vocational training

[Sejong=Asia Economy Reporter Kim Hyunjung] With the passage of the supplementary budget bill (supplementary budget) for the payment of emergency disaster relief funds at the National Assembly plenary session, it is expected that the payment of support funds will begin starting with low-income households from the 4th of this month. Meanwhile, attention is focused on the use of donations expected to be 'unclaimed donations' by some. The government plans to use the funds primarily for employment stabilization, which has emerged as the top priority since the COVID-19 pandemic.

The National Assembly held a plenary session on the 29th of last month and approved the second supplementary budget bill for the payment of emergency disaster relief funds. Starting from the 4th of this month, disaster relief payments will be made to 21.71 million households, beginning with 2.7 million low-income households.

First, the intention to donate can be expressed during the support fund application stage through a separately created application website. General households, excluding low-income households, must go through an application process including entering personal information to receive the funds. Donations can be made for the entire amount or a portion of the support funds provided to each household.

Donations exceeding the support amount are also possible through the Korea Workers' Compensation & Welfare Service. Tax credit benefits can be received for deemed donations automatically reclaimed to the national treasury if the support funds are not applied for. Donors receive a 15% tax credit benefit on the donation amount during the year-end tax settlement of the following year.

Although the scale cannot be predicted at this time, the collected donations will be incorporated into the employment insurance fund revenue (private contributions). They are expected to be used as resources for COVID-19 crisis response employment stabilization projects. The funds are anticipated to be used for employment retention, worker livelihood stabilization, emergency job creation subsidies, vocational training, and more.

An official from the Ministry of Economy and Finance stated, "We expect that the amount of donations collected will have the effect of reducing government bond issuance for future employment insurance fund resource replenishment."