Seoul approves $20 billion energy relief program

The South Korean government will provide up to 600,000 won ($460) in fuel relief payments to 35.77 million people, representing the bottom 70 percent of income earners. Households with lower incomes and those living in rural areas will receive larger payments.

The Cabinet approved a 26.2 trillion won ($20 billion) supplementary budget on March 31 to help offset rising energy costs. Payments will range from 100,000 to 600,000 won per person, determined by health insurance contributions, with the highest support going to basic livelihood recipients in depopulated regions.

According to welfare guidelines, a four-person household earning less than 9.7 million won ($7,500) per month falls into the bottom 70 percent. Actual payment amounts will be based on each household’s health insurance contributions.

If the budget passes the National Assembly, the government will first pay 2.85 million basic livelihood recipients, followed by 360,000 near-poverty and single-parent households. The remaining recipients will be confirmed and paid once health insurance data is verified.

The budget is funded by 25.2 trillion won in excess tax revenue from corporate and securities transaction taxes, supplemented by 1 trillion won from government funds. Park Hong-geun, minister of the Ministry of Economy and Finance, said the budget could boost the country’s growth rate by 0.2 percentage points this year. He warned, however, that a prolonged Middle East conflict could lower growth below the current forecast of 2.0 percent, potentially limiting the budget’s impact.


Ae-Jin Ju jaj@donga.com