[News Terms] Including Military Service Period in State Compensation 'Loss of Expected Earnings'

'Ilsil-iik (逸失利益)' refers to a method of calculating damages, representing the expected profit that could have been earned if the accident leading to the claim for damages had not occurred. Ilsil-iik is a legal term and is sometimes referred to as 'future income.'

In the case of death caused by an accident, ilsil-iik is calculated by reflecting the expected earnings from work from the date of the accident until the deceased reaches the age of 65, the daily wages for urban (rural) workers set by the government, the monthly working days, and the Hoffman coefficient, which accounts for interest on the expected earnings from the accident date until the age of 65.

The Ministry of Justice announced on the 24th that it will give legislative notice until July 4th for the "Amendment to the State Compensation Act and Enforcement Decree," which mainly includes the expected military service period when a man dies or is injured due to an accident for which the state is responsible before military service.
[Photo by Asia Economy DB]

Since February 21, 2019, the Supreme Court has raised the working age for general manual laborers from 60 to 65 years when calculating ilsil-iik. The monthly working days for workers are calculated as 22 days for urban daily workers and 25 days for rural daily workers. However, due to the implementation of a five-day workweek and the introduction of substitute holidays increasing the number of holidays, recent courts have sometimes lowered the monthly working days for urban workers to 18 days in their calculations.

The issue arises in the calculation of ilsil-iik where, for minor males, the expected military service period is excluded, resulting in a difference in compensation amounts between males and females. The Ministry of Justice calculated ilsil-iik assuming the death of 9-year-old male and female students due to state negligence, finding that the male student (486.51 million KRW) received about 26.82 million KRW less than the female student (513.34 million KRW). This is because the expected military service period (18 months) was excluded from the employment period when calculating the male student's ilsil-iik.

On the 24th, the Ministry of Justice announced that it will publicly propose the 'Amendment to the State Compensation Act and Enforcement Decree,' which mainly includes counting the expected military service period when a male dies or is injured due to a state-responsible accident before military service, until July 4. Accordingly, males subject to military service will have their military service period included in the employment period and will be able to receive the same amount of state compensation as females.