Going forward, the criteria for calculating the ordinary grant will reflect items such as the "local love gift certificate issuance expense" and the "daily living population." The ordinary grant is a type of grant-in-aid (non-earmarked tax) that the central government sends to local governments with insufficient finances. Of 19.24% of the national tax, 97% is allocated as the ordinary grant, totaling 61.7 trillion won under next year's draft budget.
The Ministry of the Interior and Safety (MOIS) said on the 31st that it convened the Local Grant Committee and finalized the "2026 ordinary grant improvement plan."
Until now, each local government has received ordinary grants set according to criteria such as correction needs and its own efforts, in addition to the size of its budget shortfall. The government decided this time to improve the calculation criteria so that the more a local government works on "regional economic recovery," the more grants it can receive.
First, 10% of the size of local funds that a local government投入 into issuing local love gift certificates will be reflected in ordinary grant demand and supported starting in 2027. For non-capital regions and population-declining areas, 20% and 30% will be reflected, respectively, to strengthen support. The aim is to encourage local governments to actively issue local love gift certificates to reinvigorate neighborhood economies.
In addition, ordinary grants that had been provided based on the number of small business owners will be provided in proportion to each local government's investment size related to small business owners. The support period will also be extended by three years.
Penalties on operating cash-like welfare expenditures will be abolished. Until now, when the share of cash-like welfare expenditures was too high, the grant amount was reduced. The aim is not to restrict local governments' cash expenditures that guarantee residents' basic lives.
The daily living population will also be reflected in ordinary grant demand. The daily living population is a concept that encompasses the resident-registered population, registered foreigners, and the stay population that remains for at least three hours a day once a month due to commuting, schooling, or tourism. The idea is to encourage population-declining areas to attract more of the daily living population.
In addition, ◇ the local government cost-sharing expense for implementing the "5 poles and 3 specialties" strategy, ▲ corporations' relocation to the provinces, ▲ air and environmental investment, and ▲ renewable energy production volume, among other demand items, will be more widely reflected in the grant calculation criteria.
The "enforcement rule amendment to the Local Grant-in-Aid Act" reflecting these improvement measures will be preannounced for legislation from early Nov. to mid-Dec. After the amendment is promulgated, it will be applied to the national ordinary grant calculation starting next year. Minister Yoon Ho-jung of the Ministry of the Interior and Safety (MOIS) said, "We will work to ensure that the grant-in-aid (non-earmarked tax) is allocated in a way that supports the recovery and growth of regional economies and realizes solidarity and cooperation in local communities."