[Economic Outlook] This Week's Start of '4th Disaster Relief Fund' Payments... Announcement of LH Scandal Reform Plan

On the 25th, the supplementary budget bill worth 15 trillion won for the 4th disaster relief fund payment is being passed at the National Assembly plenary session. Photo by Yoon Dong-joo doso7@

[Sejong=Asia Economy Reporter Son Sunhee] Starting from the 29th, the government will begin distributing the 4th disaster relief fund of up to 5 million KRW to small business owners, special-type workers (teukgo), and freelancers. Priority recipients include self-employed individuals whose sales have decreased due to the COVID-19 pandemic and those who have previously received emergency employment stabilization support funds.

According to the Ministry of Economy and Finance on the 28th, the government will start distributing approximately 6.7 trillion KRW in 'Small Business Owner Support Plus' funds to 4.83 million self-employed and small business owners facing difficulties in management and livelihood due to the COVID-19 crisis from the 29th. The recipients were finalized last week, and notification messages will be sent on the 29th. Payments will be made as soon as account numbers and application intentions are confirmed.

The initial recipients are 2.7 million people whose sales decrease has been confirmed through the National Tax Service database. Those whose sales decrease is not confirmed in the database and require separate proof will receive payments between mid-April and mid-May.

The Small Business Owner Support Plus funds are divided into seven tiers: ▲ 5 million KRW for extended gathering bans ▲ 4 million KRW for eased gathering bans ▲ 3 million KRW for gathering restrictions ▲ 3 million KRW for general industries in management crisis (industry average sales decrease of 60% or more) ▲ 2 million KRW for general industries in management crisis (industry average sales decrease of 40-60%) ▲ 2 million KRW for general industries in management crisis (industry average sales decrease of 20-40%) ▲ 1 million KRW for general industries.

For 800,000 special-type workers and freelancers, a total budget of 450 billion KRW will be used to provide emergency employment stabilization funds. Among them, 700,000 people who have already received support will be prioritized to receive 500,000 KRW from the 30th until May 5th. New applicants will receive 1 million KRW. Considering the time required for screening, actual payments are expected by the end of May.

For 80,000 corporate taxi drivers and 35,000 charter bus drivers whose sales have decreased compared to the previous year, applications will be accepted from early next month, and 700,000 KRW will be provided from early May. For 60,000 care service workers, 500,000 KRW will be paid in mid-May.

For street vendors and other marginal working poor, 500,000 KRW in livelihood and income stabilization funds will be provided, and farmers will receive vouchers worth 300,000 KRW and 1 million KRW. The vouchers can be used to purchase farming and fishing supplies.

Meanwhile, the Democratic Party, the Ministry of Economy and Finance, and the Ministry of Land, Infrastructure and Transport will hold a party-government meeting today regarding the Korean Land and Housing Corporation (LH) employee land speculation scandal. They plan to significantly strengthen penalties for real estate speculation using undisclosed information. Profits gained from illegal acts related to public housing projects will be confiscated, and fines of 3 to 5 times the amount of the profits will be imposed. If profits exceed 5 billion KRW, the maximum penalty is life imprisonment; if profits are between 500 million KRW and 5 billion KRW, imprisonment for at least 3 years will be imposed.

Employees of ministries or public institutions related to real estate policy will be required to register their assets like senior public officials, and must report the circumstances and sources of funds when acquiring real estate. Acquiring real estate related to their work field will be completely prohibited. Penalties will be significantly increased for illegal real estate activities using undisclosed information despite these measures.

In the case of LH, the same penalty regulations apply not only to current employees but also to retirees within the last 10 years who use work-related undisclosed information in real estate transactions.

Relatedly, on the 24th, the three laws to eradicate real estate speculation (Public Officials Ethics Act, Special Act on Public Housing, and LH Act) were passed in the National Assembly. Asset registration regulations will apply six months after the laws are promulgated, and penalty regulations will apply from the date of promulgation.

Additionally, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki plans to finalize and announce LH innovation measures by the end of this month.