Ruling Party and Government Clash Again Over Loss Compensation System... 'Compensation' VS 'Support'

Ruling Party and Government Clash Over Wording and Implementation Timing

On the 4th, when the measure prohibiting private gatherings of five or more people was expanded nationwide, the streets of Myeongdong, Jung-gu, Seoul, were deserted during lunchtime due to the impact of the novel coronavirus infection (COVID-19).
Photo by Moon Honam munonam@

[Asia Economy Reporter Jang Sehee] The Democratic Party of Korea and the government are showing differences over the basis and timing of support for the loss compensation system. While the Democratic Party strengthens the government's responsibility by legally specifying the term "compensation," the government insists that the term "support" is more appropriate.

According to the ruling party and government on the 1st, legislative discussions on loss compensation for small business owners affected by quarantine measures to prevent the spread of COVID-19 have begun in earnest with the Loss Compensation Act (Amendment to the Act on Protection and Support for Small Business Owners) proposed by Democratic Party lawmaker Song Gap-seok. The Democratic Party intends to pass the bill in the March National Assembly session.

The bill limits the target to small business owners and explicitly states the "obligation to compensate for losses."

However, government ministries such as the Ministry of Economy and Finance hold the view that the term "support" is more appropriate than "compensation." A government official explained, "Using the term 'loss compensation' could lead to disputes," and added, "It is appropriate for the government to proceed in the direction of support."

There is also a clash over the timing of enforcement. If the ruling party passes the bill as planned in March, the enforcement date will be in July, and losses will be applied from March.

However, the government believes it is reasonable to set a six-month grace period considering the time needed to prepare enforcement ordinances or rules. In other words, if the bill passes in March, the actual enforcement date would be around October.

In response, a government official said, "Since not all infectious diseases come in the same form, reflecting rigidity could cause difficulties in future support processes."