Ministry of SMEs and Startups to Expand Employment Insurance Premium Support Program to 70,000 Recipients by 2030

Promoting Insurance-Linked Support and Tax Relief for the Yellow Umbrella Mutual Aid Fund

Measures are being promoted to encourage small business owners to enroll in employment insurance and to strengthen insurance-linked support for the Yellow Umbrella Mutual Aid Fund.

Noh Yongsuk, Vice Minister of the Ministry of SMEs and Startups, is delivering a greeting at the "3rd Meeting on Strengthening the Recovery and Safety Net for Small Business Owners" held at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Ministry of SMEs and Startups

On August 27, the Ministry of SMEs and Startups announced that it held an on-site meeting on "Strengthening Insurance and Mutual Aid for Small Business Owners" at the Daejeon Exclusive Training Center of the Small Enterprise and Market Service in Seo-gu, Daejeon, presided over by Vice Minister Noh Yongsuk. Attendees included representatives from the Ministry of SMEs and Startups, the Ministry of Employment and Labor, the Small Enterprise and Market Service, the Korea Federation of SMEs, the Korea Workers' Compensation and Welfare Service, as well as 15 small business owners and experts who are enrolled in employment insurance, the Yellow Umbrella Mutual Aid Fund, or fire insurance.

The Ministry of SMEs and Startups plans to promote the activation of employment insurance for the self-employed by expanding premium support, operating a pan-government policy council for system improvement, and linking support for business recovery.

Currently, small business owners who are enrolled in employment insurance and are forced to close their businesses can receive monthly unemployment benefits ranging from 1.09 million to 2.02 million won, as well as vocational training, for up to seven months. However, the actual number of self-employed individuals enrolled in employment insurance is only about 50,000, which is less than 1% of all small business owners.

To address this, the Ministry of SMEs and Startups will expand the scale of its employment insurance premium support program-which provides up to 80% of premiums for five years-from the current 30,000 recipients to 70,000 by 2030.

In addition, the Ministry of SMEs and Startups and the Korea Federation of SMEs will promote insurance-linked support, tax burden relief, increased contribution limits, and expanded enrollment incentives for the Yellow Umbrella Mutual Aid Fund. When Yellow Umbrella Mutual Aid Fund subscribers enroll in or renew disaster and earthquake insurance entrusted and sold through the Korea Federation of SMEs, they will receive support covering 60% to 100% of their personal insurance premiums. The government is also considering expanding this support to fire insurance.

The burden of mid-term cancellation fees for long-term subscribers (10 years) will also be eased. Previously, if business income decreased by more than 50% compared to the previous three years, retirement income tax (about 4%) was applied instead of other income tax (16.5%) to the cancellation refund. The Ministry of SMEs and Startups will revise this standard to apply when business income decreases by more than 20% compared to the previous three years. In addition, the contribution limit will be raised from the current 3 million won per quarter to 18 million won per year, similar to the limit for pension savings.

Vice Minister Noh Yongsuk stated, "We will strengthen the safety net for business closure by enhancing employment insurance and the Yellow Umbrella Mutual Aid Fund for the self-employed, and support the real recovery of small business owners who have closed their businesses by linking business recovery assistance." He added, "While improving the safety net for business closure, we will also continue to expand safety nets to prepare for various risks such as industrial accidents and disasters."