Corona Special Committee to Finalize Next Week on Compensation Scale and Eligibility for Self-Employed Losses

The Corona Victims' Self-Employed General Federation (Coja General Federation), consisting of 14 self-employed organizations including the Korea Foodservice Industry Association, is holding a head-shaving ceremony at the "Government Condemnation Gwanghwamun Rally" held on February 15th at the Gwanghwamun Citizen Open Square in Seoul. They demanded the abolition of business hour restrictions, retroactive application of loss compensation and realization of 100% compensation, inclusion of self-employed persons with sales exceeding 1 billion won in the loss compensation target, preparation of separate support measures by Seoul and local governments, and additional application of loss compensation for all businesses opened after the outbreak of COVID-19. / Photo by Moon Honam munonam@

[Asia Economy Reporter Jeong Dong-hoon] The COVID-19 Emergency Response Special Committee (COVID Special Committee) is expected to finalize the scale, target, and method of compensation for losses suffered by self-employed individuals by next week.

At a briefing held on the 21st at the transition committee press conference room in Tongui-dong, Jongno-gu, Seoul, Hong Kyung-hee, deputy spokesperson of the transition committee, stated, "The COVID Special Committee held its 5th meeting of the Livelihood Economy Subcommittee on the 20th and approached a conclusion on the specific compensation scale, payment targets, and payment methods among various simulation plans to be included in the comprehensive COVID loss compensation package." She added, "The selected plan, based on the estimated loss scale refined through several rounds of government revisions, is scheduled to be reported to Chairman Ahn Cheol-soo, and is expected to be finalized through the COVID Special Committee's final review next week."

President-elect Yoon Seok-yeol had promised during his presidential campaign to inject 50 trillion won to compensate self-employed individuals who suffered losses due to COVID-19. However, recently, key economic figures in the Yoon administration, such as Prime Minister nominee Han Duck-soo and Finance Minister nominee Choo Kyung-ho, emphasized fiscal soundness, raising concerns that loss compensation and the supplementary budget for it might be reduced.

Deputy spokesperson Hong said, "The data required for accurate loss compensation estimates is vast, and we could not mention specific scales during the process to ensure thorough loss compensation through detailed analysis." He added, "The COVID Special Committee is making its best efforts to prepare a complete, fair, and prompt compensation plan."

Additionally, the committee is reviewing the 'Emergency Financial Restructuring Plan for Small Business Owners' as part of the financial support measures included in the comprehensive COVID loss compensation package. Hong explained, "The basic direction of the emergency financial restructuring plan is to reduce borrowers' interest burdens, extend repayment schedules, and alleviate excessive debt." He added, "Furthermore, in response to the transition to a period of rising interest rates, we discussed including support for refinancing through banks and interest differential compensation to ease the interest burden on non-bank loan borrowers exposed to interest rate risks."

Hong also stated, "Specific measures for debt restructuring of borrowers at risk of default are being developed and will be differentiated from existing programs focused on delinquencies and personal credit loans." He continued, "We are reviewing and discussing various financial support measures, including debt restructuring, to reduce the excessive debt burden on small business owners and self-employed individuals with low repayment capacity."

When asked about the progress of the 'bad bank' mentioned by Transition Committee Chairman Ahn Cheol-soo, Hong responded, "Using the term 'bad bank' is a reserved stance at this point." However, he added, "We are specifically exploring measures to alleviate the debt burden of small business owners and self-employed individuals."

Hong also revealed, "We are concretely reviewing plans to extend the payment period for individual local income tax and corporate local income tax for small self-employed businesses and SMEs affected by COVID-19."

In response to a question about whether industries excluded from the existing loss compensation targets, such as the travel industry, will be included in the support targets, Deputy Spokesperson Hong replied, "We are simultaneously reviewing measures for blind spots beyond those compensated under the existing loss compensation law."