Expansion of 100,000 Low-Income Beneficiaries in the National Employment Support Program: "Assigning Tasks to Prevent Support Funds from Being Used for Living Expenses"

Expansion of Labor Costs for Youth Employment in SMEs
Minister of Employment and Labor: "Essential Employment Safety Net"

Minister of Employment and Labor Ahn Kyung-duk delivering a greeting at the 2021 National Employment Support System Best Practices Conference held at the Westin Chosun Hotel in Seoul on the 2nd of last month. (Photo by Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] The number of low-income individuals eligible for the National Employment Support System, which provides job-seeking preparation funds and other support to vulnerable employment groups such as youth and women with career interruptions, will increase by 100,000 this year. Each person is expected to receive up to 3 million KRW in job-seeking support funds over six months.

The Ministry of Employment and Labor announced on the 4th that it will increase support for low-income groups in the second year of implementing the National Employment Support System, known as the Korean-style unemployment assistance. This system combines personalized employment support services such as individual vocational training, work experience, welfare services, and income support.

Income support is divided into Type I, which provides a job-seeking promotion allowance of 500,000 KRW per month for six months totaling 3 million KRW along with employment support services, and Type II, which supports up to 1,954,000 KRW only. Last year, 509,000 people applied, and 423,000 actually received support. Notably, 341,000 were Type I beneficiaries, with youth accounting for 61.9% (211,000) and women 55.4% (189,000).

However, it was also revealed that many people used the job-seeking support funds for living expenses. According to a survey conducted by the Korea Labor Institute in November last year, the main reasons for applying to the system were job counseling and establishing a job search activity plan (4.05 out of 5 points) and stabilizing living through receiving the job-seeking promotion allowance (3.99 points). The usage of the job-seeking promotion allowance was ranked as living expenses (76.4%), job search activity costs (50.3%), and direct job-related expenses (42.8%).

The Ministry of Employment and Labor announced that the budget target for the National Employment Support System this year is set at 600,000 people. This is similar to last year's 590,000, but the number of Type I support recipients has been significantly increased from 400,000 to 500,000. The youth special support target has also expanded from 100,000 to 170,000. Referring to the results from the Korea Labor Institute survey, this year the system will operate to support participants' job-seeking efforts, reform employment competency evaluations, and maximize the effectiveness of work experience support. The goal is to encourage the use of funds for job-seeking rather than living expenses.

First, since the 1st of this month, an early employment success allowance of up to 500,000 KRW has been provided. The number of times participants can receive the job-seeking promotion allowance is limited to three, and 500,000 KRW is given upon successful employment or entrepreneurship. To strengthen job placement, a 'Job Placement Dedicated Team' will be pilot-operated in the Incheon and Gumi Employment Centers, and a 'Job Information Coordination Team' in the Busan Center during the first half of this year, with plans to expand to all regional offices.

Additionally, participants will be assigned tasks to confirm their job-seeking motivation and receive face-to-face counseling to effectively increase actual employment rates. A new 'Youth Job Leap Incentive' will be implemented this year, providing small and medium-sized enterprises that hire unemployed youth as regular employees and maintain employment for more than six months with 800,000 KRW per month per youth for up to 12 months (9.6 million KRW annually). Furthermore, the 'Employment Promotion Incentive' system will be linked, providing 600,000 KRW per month (7.2 million KRW annually) to employers who hire National Employment Support System participants as contract workers for more than six months. To enhance the work experience program, opportunities such as mock resume writing, self-introduction letter preparation, and interviews will be provided before participation.

Minister of Employment and Labor Ahn Kyung-deok said, "In the first year of implementing the National Employment Support System, we have identified and supported blind spots to help more citizens and provided employment support services," adding, "In the second year of the system's implementation, we will do our best to establish it as an essential employment safety net for the people."