"Exceeded Insurance Premium Criteria, Why Me?"... This Time, 90% National Support Fund Controversy

With "Support Payments to 90% of the Population"... Over 1 Million Plus α Additional Payments
Average 13,000 Objections Filed Daily
Hard to Predict Objections from Regional Subscribers
Experts Say "Disaster Relief May Be Mentioned for Political Reasons"

[Asia Economy Reporters Jang Se-hee and Moon Chae-seok] Office worker Kim Mo (41) exploded in frustration upon hearing that he was excluded from the disaster relief fund payment. He had been unemployed from last year until April this year and started working from May, but the reason for exclusion was that he did not meet the health insurance premium assessment criteria. He pointed out, "My situation is still difficult due to the long period of no income since last year," adding, "The problem arises because the judgment is made only based on income at the relevant time."

◆ Considering Additional Payment to ‘1 Million+α’ = The Democratic Party of Korea announced that it would expand the payment target to 90% just three days after the payment of the Win-Win National Support Fund, reigniting the ‘boundary controversy.’ With more than 50,000 objections flooding in over four days, the debate over ‘how far to pay’ is expected to intensify.

According to the ruling party and government on the 10th, if the payment rate is raised to 90%, 460,000 households, equivalent to 2% of the population, will be included in the payment target. Considering the average household size of 2.2 persons, about 1 million people will be added.

The ruling party and government plan to first expand the target based on objections. They intend to provide additional payments only to those with changes in family composition due to reasons such as marriage, childbirth, or the return of family members from overseas stays, or regional subscribers whose recent income has decreased. Park Wan-joo, chairman of the Democratic Party’s Policy Committee, said, "It is inevitable that many dissatisfaction factors will arise," adding, "If we pay at least about 90%, those on the borderline can receive it without feeling unfair." A government official said, "We plan to pay as much as possible only if the reasons are recognized," adding, "Based on comprehensive statistical data analysis, we expect the number will not exceed 1 million." During last year’s nationwide disaster relief fund payment, about 400,000 out of 43.26 million applicants raised objections due to changes in family composition.

However, the issue of how far to accept objections if they continue to increase remains a challenge. According to the Anti-Corruption and Civil Rights Commission, as of the 9th, the total number of objections was 54,000, averaging 13,000 per day. Changes in family composition accounted for 22,000 cases, and health insurance premium adjustments for 19,000 cases. If a similar level continues for the remaining 63 days, the total is expected to reach 819,000 cases.

In particular, dissatisfaction among regional subscribers is a variable. A government official said, "Objections from regional subscribers are unpredictable," adding, "Accurate judgment requires receiving actual comprehensive income tax filings and additional analysis of decreases by industry." Since the June health insurance premiums for self-employed regional subscribers are based on the comprehensive income tax filed in 2019, the decrease in sales and income due to COVID-19 last year was not reflected in the health insurance premiums, causing controversy. It is expected that industry-specific sales analysis based on comprehensive income tax filings will be possible around November at the earliest.

◆ Endless Boundary Controversy over ‘A Slight Difference’ = Experts express concerns that the Democratic Party’s plan to provide maximum relief for objections will exponentially increase the number of objections. They argue that cutting off 88% of the population without basis and the constantly changing criteria will only increase complaints.

In particular, since the support target was arbitrarily divided from the beginning as ‘80%’ or ‘88%,’ dissatisfaction is expected to be endless. If support is provided up to the bottom 88% of income, 88.1%, or up to 90%, 90.1%, people standing on the ‘slight difference’ borderline will understandably complain about unfairness. Therefore, expanding the support target to 90% will not hide the fundamental problem. Seven out of ten objections are related to health insurance adjustments and changes in family composition due to marriage or return, and experts point out that structural problems cannot be solved simply by increasing the payment scale.

Professor Sung Myung-jae of Hongik University’s Department of Economics (President of the Korean Association of Public Finance) said, "The problem was announcing payments as ‘nationwide’ or ‘80%’ from the start, and even if the payment target is expanded to the bottom 90%, there will still be people who feel unfair," adding, "The problem is not the budget to cover the 2% gap between 88% and 90%, but the concern that support payments will be discussed again whenever politically necessary." Professor Park Ki-baek of the Taxation Department at the University of Seoul said, "Expanding the payment target to ‘90%’ does not end the issue," adding, "If payments were made only to low-income groups such as the first income quintile, the controversy would not be so great, but because it may include middle-class and high-income earners, people say, ‘Why do they receive it but I don’t?’"

Meanwhile, the scale of applications and payments for the COVID-19 Win-Win National Support Fund, which began on the 6th, has exceeded 50 trillion won. The number of people who received the support fund increased by 5.5 million, surpassing a cumulative total of 20 million.