99.5% of Government Emergency Disaster Relief Funds Used Within Deadline... Most Spent at Marts and Restaurants

64% Usage at Small Franchise Stores with Annual Sales Under 3 Billion KRW
Donations Amount to 280 Billion KRW, 2% of Total Payments

[Asia Economy Reporter Jo In-kyung] It has been revealed that 99.5% of the emergency disaster relief funds, which the government has been providing to all citizens since May to overcome the economic recession caused by the novel coronavirus infection (COVID-19), were used by the deadline at the end of August. Approximately 280 billion KRW of relief funds that were either not applied for or applied for but not used were donated.

According to the Ministry of the Interior and Safety on the 22nd, as of the 24th of last month, the government had completed applications for the emergency disaster relief funds, and a total of 22.16 million households nationwide received 14.2357 trillion KRW in relief funds. This corresponds to 99.9% of the initial first round emergency disaster relief budget of 14.2448 trillion KRW.

The number of households receiving the funds also increased by 450,000 from the initially estimated 21.71 million households targeted by the government.

Regarding the payment methods, 14.64 million households (66.1% of the total) received the funds as credit or debit card recharge amounts, followed by prepaid cards given to 2.92 million households (13.2%), cash payments to 2.87 million households (12.9%), and local love gift certificates to 1.73 million households (7.8%).

The Ministry of the Interior and Safety explained that since a significant number of applicant households chose online application methods such as credit or debit cards, congestion such as lining up at community centers was alleviated, and by the end of May, about one month after the application started, support payments were completed for most households (approximately 21.32 million households).

This includes 395,000 cases and 176 billion KRW paid after appeals. Among the emergency disaster relief fund appeals, 340,000 cases amounting to 162.6 billion KRW were accepted and additional payments made, while about 55,000 cases were rejected and processed with the original amount (13.4 billion KRW).

More than half of credit/debit card recharge funds used at marts, groceries, and casual restaurants

The emergency disaster relieffunds were used up to August 31 excluding cash and paper gift certificates, with 12.1273 trillion KRW distributed via credit/debit cards, prepaid cards, and mobile/card-type local love gift certificates, of which 99.5%, or 12.0656 trillion KRW, was used.

Breaking down by payment method, of the 9.6176 trillion KRW given as credit/debit card recharge amounts, 99.6% (9.5796 trillion KRW) was used; of the 1.8411 trillion KRW given as prepaid cards, 99.1% (1.8241 trillion KRW) was used; and of the 668.6 billion KRW given as mobile/card-type local love gift certificates, 99.0% (661.9 billion KRW) was used.

In particular, when the usage details of the credit/debit card recharge funds (9.5591 trillion KRW) were classified by industry codes, 26.3% was used in marts and grocery sectors. This was followed by 24.3% at casual restaurants, 10.6% at hospitals and pharmacies, 6.1% at gas stations, and 4.7% at clothing and miscellaneous goods stores.

Based on merchant sales size, 63.5% of the credit/debit card recharge fund usage was at small and medium-sized credit card merchants with annual sales of 3 billion KRW or less, and 36.5% was at large credit card merchants. Notably, 24.9% of the total recharge fund amount was used at very small merchants with annual sales of 300 million KRW or less.

Since the application and usage period for the emergency disaster relief funds has ended, the government plans to verify and finalize the settlement of the final payment and usage amounts by each local government.

28.03 billion KRW of unused relief funds incorporated into Employment Insurance Fund

Meanwhile, the government allowed applicants to choose donation either at the time of application or after receiving the funds, and if no application was made within three months from the start date, it was considered as a willingness to donate. Accordingly, a total of 737,000 donation cases amounting to 280.35 billion KRW were recorded.

Among these, 'deemed donations' from those who did not apply within three months after the application start date amounted to 580,000 cases and 251.6 billion KRW, while 'solicited donations' chosen at the application stage or after receipt amounted to 157,000 cases and 28.75 billion KRW.

These donations will be incorporated into the revenue of the Employment Insurance Fund and used for employment retention and job creation in the future.

Minister Jin Young of the Ministry of the Interior and Safety stated, "We hope that the government’s emergency disaster relief funds have provided strength and comfort to the people struggling due to COVID-19, while also serving as a breath of fresh air for small businesses and the local economy." He added, "The government will continue to make every effort to revitalize the depressed local economy."