Ministry of SMEs and Startups to Strengthen Employment Support for Former Small Business Owners

Expansion of Employment Training and Allowances, Plus Eased Loan Burdens
Third Roundtable Held on Recovery and Strengthening the Safety Net for Small Business Owners

On August 14, the Ministry of SMEs and Startups announced that it held its third roundtable discussion on "Recovery and Strengthening the Safety Net for Small Business Owners" at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul, chaired by Vice Minister Noh Yongseok. The ministry stated that it listened to feedback from the field regarding "Support for Transitioning Former Small Business Owners to Wage Employment." The roundtable was attended by officials from the Ministry of SMEs and Startups, the Ministry of Employment and Labor-which operates the National Employment Support System-the Small Enterprise and Market Service, former small business owners, and experts in business recovery support.

On this day, the Ministry of SMEs and Startups gathered feedback from small business owners who are preparing for or have succeeded in finding employment after closing their businesses. At the same time, the ministry announced the "Plan to Strengthen Employment Support for Former Small Business Owners" to actively support their new beginnings. Starting this year, the Hope Return Package provides both basic and advanced training, including employment mindset programs, and connects participants with the Ministry of Employment and Labor’s National Employment Support System to offer tailored job training and employment support. This year, about 2,000 former small business owners will receive support through this linkage, and the ministry plans to expand support to 5,000 people by 2028. Participants in the National Employment Support System linkage program can receive a supplementary allowance of 200,000 won per month for up to six months, in addition to the existing benefits, as part of specialized employment support.

In addition, the ministry will support former small business owners aged 50 and older who have obtained certifications or completed vocational training, enabling them to gain career transition work experience. The Hope Return Package will proactively identify those with certifications or practical experience during its training courses, and, in cooperation with the Ministry of Employment and Labor’s "Mid-to-Late Career Support Program," participants will be able to gain work experience while receiving a participation allowance of up to 1.5 million won per month.

For employers who hire former small business owners who have completed the Hope Return Package’s basic or advanced training and retain them for at least six months, the ministry will provide up to 7.2 million won in employment promotion incentives over one year. The subsidy will be paid in installments at the six- and twelve-month marks after hiring, and this measure is expected to encourage employment retention and stable settlement for former small business owners.

The ministry has also prepared an incentive plan to ease the policy loan repayment burden for small business owners who transition to wage employment and maintain continuous service after closing their businesses. Currently, support is provided to defer lump-sum repayment of policy loans upon business closure. Going forward, for those who successfully find employment, the ministry will support an extension of the repayment period, and for those who remain employed for over a year and make diligent repayments, an additional interest rate reduction of 0.5 percentage points will be provided. To implement this, the "Act on the Protection and Support of Small Business Owners" needs to be amended, and the ministry plans to pursue this legislative change within the year.

Vice Minister Noh Yongseok of the Ministry of SMEs and Startups said, "As of last year, the number of business closures exceeded one million, and the difficulties faced by small business owners continue," adding, "We will work to build a robust 'Closure and Restart Safety Net' so that former small business owners can overcome their hardships and make a new leap forward."