[Exclusive] Disaster Relief Fund for All Citizens vs. Bottom 80% Income, 2.6 Trillion Won Difference in Required Resources... Execution Period is 1.5 Months

Ministry of the Interior and Safety Estimates 12.93 Trillion KRW Nationwide and 10.34 Trillion KRW for Bottom 80% Income Group, Calculating a Difference of 2.6 Trillion KRW
Administrative Costs 50.9 Billion KRW...180 Billion KRW Allocated for Support Staff Salaries, 900 Million KRW for Equipment to Verify Support Fund Eligibility
Support Staff and Equipment Rental Costs Estimated Based on a 6-Week Usage Period...Payments Possible After Early September

[Asia Economy Reporter Oh Ju-yeon] Amid the power struggle between the ruling party and the government over the scope of disaster relief fund (National Support Fund) payments, a government review report has revealed that the financial burden difference between providing payments to the "bottom 80% income group" and to the entire population nationwide is approximately 2.6 trillion won. Based on this criterion, considering the administrative costs of selecting the bottom 80% income group, the gap narrows to about 2.5 trillion won, and if the credit card cashback funds are eliminated as some proponents of nationwide disaster relief funds suggest, the difference decreases further to 1.4 trillion won.

According to the Ministry of the Interior and Safety's "Reference Material on Funding for the Coexistence National Support Fund," obtained by Asia Economy on the 12th through the National Assembly's Public Administration and Security Committee, the ministry estimated that the required funds for nationwide support amount to 12.93 trillion won (51.7 million people), while payments to the bottom 80% income group are estimated at 10.34 trillion won (51.7 million people × 80% × 250,000 won per person), calculating the difference at about 2.6 trillion won.

[Image source=Yonhap News]

In the "2nd Supplementary Budget Proposal Project Explanation Materials" prepared by the Ministry of the Interior and Safety, the national government cost for disaster relief payments targeting 18.56 million households in the bottom 80% income bracket is 8.0794 trillion won, with local government costs at 2.261 trillion won. Separately, the cost for selecting the bottom 80% income group is budgeted at 50.9 billion won (41.8 billion won from the national government, 9.1 billion won from local governments). These costs cover voucher issuance, local government auxiliary staff activities, publicity, and system construction.

Specifically, 17.932 billion won is allocated solely for the wages of auxiliary personnel in towns and townships. This includes wages and allowances for a total of 8,021 personnel: three per city/county/district with over 60,000 households, two per city/county/district with 30,000 to 60,000 households, and one per other areas. Additionally, 940 million won is allocated for PC rental fees provided to these auxiliary personnel to respond to civil complaints verifying eligibility for the support fund at each town and township. Furthermore, 7.91 billion won is estimated for building and operating related infrastructure and websites where eligibility for the disaster relief fund can be checked, confirmed, and applied for.

Including these separate operating costs, the total cost for disaster relief payments targeting the bottom 80% income group rises to 10.3909 trillion won. This narrows the funding gap with nationwide payments to 2.5391 trillion won.

Moreover, if the credit card cashback support costs are eliminated as some suggest, even if 250,000 won is paid to everyone nationwide, the difference in payment scale compared to paying only the bottom 80% income group shrinks dramatically to 1.4391 trillion won.

Earlier, on the 2nd, the Ministry of Economy and Finance submitted a second supplementary budget proposal totaling 33 trillion won to the National Assembly, including the COVID-19 Coexistence National Support Fund (5th disaster relief fund), the Coexistence Consumption Support Fund (credit card cashback), and the Small Business Hope Recovery Fund. However, the credit card cashback plan, which refunds increased card usage amounts as points, is considered to have low effectiveness and is complicated and difficult to apply. Therefore, opinions have emerged that it would be better to eliminate this plan and include its cost (1.1 trillion won) in the disaster relief fund, distributing it nationwide rather than selectively to the bottom 80% income group.

Additionally, in terms of operational efficiency, nationwide payments are pointed out to be faster. The Ministry of the Interior and Safety's data estimates a six-week period for auxiliary personnel and equipment rental costs when paying the bottom 80% income group as per the current government plan. If payments are made nationwide, execution can begin immediately after the supplementary budget passes in July, but if limited to the bottom 80%, even if work starts immediately after the National Assembly plenary session approval on the 23rd, the selection process is expected to continue until early September.