It appears that 190,000 small businesses and self-employed people who joined the Yellow Umbrella, received a payout due to reasons such as closure, then restarted their businesses and re-enrolled.
The Korea Federation of Small and Medium Enterprises said that as of the end of June this year, the total number of Yellow Umbrella re-enrollees stood at 188,000.
The Yellow Umbrella is a mutual aid program that small businesses and the self-employed join to prepare for business closure or old age. Benefits include an annual income deduction of up to 6 million won, protection of payouts from seizure, and annual compound interest. Enrollees can receive business income deductions while paying contributions, and when a qualifying event such as closure or old age occurs, they receive the full amount paid in plus interest.
KBIZ said on the grounds that many self-employed people succeeded in restarting their businesses after receiving payouts and rejoined the Yellow Umbrella, on-site trust in the program has been confirmed.
In fact, Yoon Hyuk-jin had been paying about 400,000 won in monthly contributions since 2014, then received about 24 million won in payouts when closing a pasta shop in 2020. Afterward, using those funds, the person opened a new shop and re-enrolled in the Yellow Umbrella.
Lee Ji-su, who is running a handmade pudding specialty shop after closing a brunch shop, also joined the Yellow Umbrella in 2023 and received about 11 million won in closure payouts about a year later. Using the payout, the person replaced the signboard and repainted the new business site as part of remodeling, then rejoined the Yellow Umbrella.
Looking at re-enrollees' initial enrollment periods, less than three years accounted for 54.1%, the largest share. Three years or more but less than five years was 20.8%, indicating that about 75% of all re-enrollees received payouts within five years of enrollment. The average payout per re-enrollee was about 12 million won. The average monthly contribution at initial enrollment was about 280,000 won, but after re-enrollment it increased by about 8% to 303,000 won.
The number of enrollees paying the maximum monthly contribution of 1 million won also rose about 27%, from 11,000 at initial enrollment to 14,000 after re-enrollment. It is interpreted that they increased their payment scale after re-enrollment based on their experience receiving payouts.
By industry, the re-enrollment rate was highest among those in the restaurant and lodging sectors. Re-enrollees in these sectors totaled about 50,000, accounting for 26.3% of the total. Considering that restaurants and lodging make up 17.7% of all Yellow Umbrella enrollees, this is about 9 percentage points higher.
Lee Chang-ho, head of the mutual aid division at the Korea Federation of Small and Medium Enterprises, said, "The fact that re-enrollment rates are high among self-employed people in sectors where closures and restarts are frequent shows that the Yellow Umbrella is fulfilling its role as a social safety net," adding, "We will continue to do our best to improve the program so that more self-employed people can enjoy greater benefits."