It became known on the 28th that the Ministry of Employment and Labor has begun designing a system to pay unemployment benefits (job-seeking benefits) "once in a lifetime" even to young people who voluntarily resign. Currently, unemployment benefits are paid only when a person leaves a company involuntarily, such as through a layoff recommendation or contract expiration. The intent is to protect those new to the workforce, but some say supporting those who quit of their own accord is a waste of fiscal resources.
◇ Setting conditions of "involuntary resignation" to prevent indiscriminate claims
Unemployment benefits were introduced in 1995 to encourage re-employment for those who lost their jobs. The purpose is to help people who suddenly leave their jobs for unwanted reasons find new work without financial worries. Typically, for four to nine months, recipients receive 60% of the average wage of the three months before separation.
However, to prevent indiscriminate claims when the system was introduced, eligibility was limited to cases of "involuntary resignation."
Still, it is said there are quite a few cases in which a company "processes as a layoff recommendation" as the reason for an employee's resignation. Even if the employee voluntarily submitted a resignation letter, it is a kind of consideration to allow the person to receive unemployment benefits.
Such acts can be subject to criminal punishment. If a job seeker who is seeking re-employment falsifies the reason for resignation on a separation certificate, it constitutes fraudulent receipt. The company is also subject to punishment. In reality, however, the government has limits in verifying all reasons for resignation.
◇ "We should protect young people disappointed in their first job and give them a chance to try again"
The government is reviewing a plan to allow one-time receipt of unemployment benefits even without such tricks. The idea is to provide one-time financial support when a newcomer to the workforce leaves a company of their own accord.
A Ministry of Employment and Labor official said, "Many young people get hurt or disappointed at their first job, quit, and give up on re-employment," and added, "We need a system that protects them and gives them an opportunity to try again."
A rise in "resting youth," which has become a recent social issue, is another reason. This year, the number of resting youth who neither work nor look for work hit the 400,000 range, an all-time high. According to a recent survey conducted by University Tomorrow at the request of the ministry, most resting youth had at least one work experience. They answered that they "do not return to the workplace because of disappointment at the previous job."
◇ The unemployment benefit fund is already in the red… Fix fraudulent claims first
The problem is funding. Unemployment benefits are paid from reserves within the Employment Insurance Fund account. As of the end of last year, the reserve was 3.5083 trillion won. On the surface it is in the black, but if you subtract the money the ministry borrowed from the public funds (7.7207 trillion won), it is more than 4 trillion won in the red.
In this situation, if the number of people eligible for unemployment benefits increases, the deficit could widen. The ministry expects that expanding eligibility would require an additional 500 billion to 1 trillion won in annual costs. Minister Kim Young-hoon of the ministry said, "Currently, the Employment Insurance Fund shares expenditures such as childbirth and parental leave benefits, but if we separate these, we can solve the problem."
Some say it is a priority to fix problems in the current unemployment benefit system first. According to the ministry, there were 24,400 detected cases of fraudulent receipt of unemployment benefits last year. The amount totaled 32.2 billion won.
The government plans to put in place a tight system to prevent side effects from expanding eligibility for unemployment benefits. It will first look at overseas cases. In France, which provides unemployment benefits to voluntary leavers, four conditions must be met: ▲ at least 1,300 days of work in the five years before resignation ▲ consultation with a professional advisory firm on a career transition plan ▲ submission and review of the career transition plan by a local employment center ▲ job-seeker registration with an employment center after resignation. If this plan is not carried out, eligibility is revoked. Japan, Germany, and Denmark also operate similar systems.