Up to 240,000 KRW Annual Hope Incentive with 20,000 KRW Monthly
Public Mutual Aid System Providing Payment Amount + Compound Interest to Small Business Owners Facing Difficulties Due to Closure or Death
[Asia Economy Reporter Lim Cheol-young] Seoul City will support small business owners who newly subscribe to the "Yellow Umbrella Mutual Aid," known as the "retirement fund for self-employed," by providing a monthly payment of 20,000 KRW for one year.
On the 17th, Seoul City announced that small business owners with annual sales of 200 million KRW or less who join the Yellow Umbrella Mutual Aid this year will receive a total of 240,000 KRW in hope incentives, paid monthly at 20,000 KRW for one year. This is intended to provide practical assistance to small business owners who are experiencing severe difficulties due to the prolonged COVID-19 pandemic.
The "Yellow Umbrella Mutual Aid" is a public mutual aid system that acts as a social safety net, where small enterprises and small business owners who have subscribed receive a lump sum refund of the amount they have paid, with compound interest applied, when they face livelihood difficulties due to reasons such as business closure, death, retirement, or old age. It was introduced in September 2007 under the Small and Medium Enterprise Cooperative Act and is currently operated and managed by the Korea Federation of SMEs.
The subscription amount for the mutual aid ranges from 50,000 KRW to 1,000,000 KRW per month per small business owner. Benefits include an annual income deduction of up to 5 million KRW at the time of subscription, accident insurance support for two years from the subscription date, prohibition of seizure, transfer, or collateral provision of the mutual aid funds, and loans within the payment amount, among various other advantages.
Subscriptions can be made by small business owners through the Korea Federation of SMEs, 14 commercial banks, or the Yellow Umbrella Mutual Aid website. Hope incentive applications can be submitted simultaneously at the time of subscription, and if the application is missed, inquiries can be made to the Yellow Umbrella Mutual Aid call center. The hope incentive support is provided on a first-come, first-served basis.
Meanwhile, since 2016, Seoul City has been the first nationwide to provide hope incentive support for the Yellow Umbrella Mutual Aid to establish a social safety net for small business owners, supporting a total of 152,952 small business owners to date. Starting with Seoul City, 17 metropolitan cities and provinces including Busan, Daegu, and Gwangju are also providing subscription incentives, and the trend is spreading to basic local governments such as Yeongdeungpo, Dongjak, and Eunpyeong districts. As a result of providing hope incentives, the number of Yellow Umbrella Mutual Aid subscribers in Seoul increased approximately 2.8 times from 178,493 (13.5%) at the end of 2015 to 498,867 (37.8%) as of the end of last year.
Im Geun-rae, Head of Small Business Policy, said, "The Yellow Umbrella is a safety system that can provide economic assistance when small business owners face situations where they can no longer work due to business closure or health issues," adding, "We expect it to be a small help to those experiencing difficulties such as decreased sales due to COVID-19, and we will continue to provide various supports to protect small business owners who play an important role in Seoul's economy."
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