The Ministry of SMEs and Startups announced on the 27th that it held a field meeting on 'Strengthening Insurance and Compensation for Small Business Owners' at the Daejeon Small Business Market Promotion Corporation Daejeon Education Center, chaired by Vice Minister Noh Yong-seok. The meeting was attended by 15 participants, including officials from the Ministry of SMEs and Startups, Ministry of Employment and Labor, Small Enterprise & Market Service (SEMAS), Korea Federation of SMEs (KBIZ), Korea Workers' Compensation & Welfare Service (K-COMWEL), and small business owners enrolled in unemployment insurance, the Yellow Umbrella Program, and fire insurance, as well as experts.
This meeting was the fifth event of a relay discussion on 'Recovery and Strengthening Safety Nets for Small Business Owners,' which has been ongoing since July 30th, designed to protect small business owners from management risks such as bankruptcy and establish a robust safety net with the theme of 'Strengthening Insurance and Compensation.'
First, the Ministry of SMEs and Startups will expand support for insurance premiums to activate employment insurance for self-employed individuals. Currently, small business owners who enroll in unemployment insurance and involuntarily shut down can receive unemployment benefits of up to 2 million to 1.09 million won per month for a maximum of seven months, along with job training. However, the number of enrollees is only about 50,000, which is less than 1% of the total. The ministry plans to encourage enrollment by providing up to 80% of the insurance premium for five years and aims to increase the number of beneficiaries from the current 30,000 to 70,000 by 2030.
In addition, a policy consultative body will be formed with relevant ministries, including the Ministry of Employment and Labor, to conduct policy research to identify the operational status of the system. For small business owners who received employment insurance premium support through Small Enterprise & Market Service (SEMAS) and subsequently went out of business, support for reemployment and entrepreneurship will be strengthened in connection with the 'Hope Return Package.'
The Yellow Umbrella Program will also be strengthened. First, support will be provided for 60% to 100% of the insured individual's portion of the premium when subscribing to or renewing disaster insurance for typhoons and earthquakes through Korea Federation of SMEs (KBIZ). There are also plans to consider expanding support to fire compensation.
Additionally, the recognition criteria for acknowledging management deterioration for long-term subscribers will be eased from a 50% decrease in business revenue compared to the previous three years to a reduction of over 20%. If the criteria are met, those who terminate their Yellow Umbrella Program enrollment before maturity will be subject to a retirement income tax of 4% instead of the 16.5% other income tax on the termination refund. Furthermore, the deposit limit for compensation payments will be expanded from the current 3 million won per quarter to an annual limit of 18 million won, similar to retirement savings deposit limits.
Meanwhile, the Ministry of SMEs and Startups also announced major improvements to the proposals made during the fourth meeting. In response to the need to alleviate the burden of high-interest household loans, the loan limit for refinancing household debt will be raised from 10 million won to 50 million won.
Vice Minister Noh Yong-seok stated, 'We will strengthen the safety net for self-employed individuals through employment insurance and the Yellow Umbrella Program, and support the practical recovery of bankrupt small businesses by linking them to re-employment support.' He further noted, 'We will continuously improve the safety net for bankruptcies while also expanding the safety net to prepare for various risks such as industrial accidents and disasters.'