[단독] Promote support to the Chinese snowball loss compensation law

As the party government prepared the’Corona 19 Self-Employment Loss Compensation Act,’ it decided to significantly expand the compensation targets not only to small business owners, but also businesses with five or more employees, including small and medium-sized businesses. According to the Democratic Party and the government on the 25th, the party government decided to unveil the amendment to the Small Business Support Act, which is based on compensation for the loss of self-employment, at the high-ranking party administration council on the 28th and legislate within March. Loss compensation targets are self-employed people who have been directly subjected to administrative regulations such as prohibition of gatherings and business restrictions due to Corona 19.

The grounds for compensation for losses are provided in the Small Business Support Act, but it was decided to stipulate exceptions so that workplaces of a scale beyond small business, such as small and medium-sized businesses, can receive compensation for losses. This is because under the current law, the scope of small business owners is limited to less than 5 full-time workers (service industry) and less than 10 (manufacturing, construction, and transportation). An official from the Democratic Party explained, “If you are subject to the same business restrictions, you should be able to receive compensation even if you are not a small business owner.” In addition, although there were no collective bans or business restrictions, it was decided to provide’damage support’ for general businesses that suffer from management difficulties due to infectious diseases such as Corona 19, based on the existing Basic Law for Small Businesses.

The government plans to pay compensation by discriminating the case of losses incurred by small business owners and self-employed persons. To this end, a deliberation committee (tentative name) for loss compensation and damage support was set up under the Ministry of SMEs and Startups. It is a structure in which the Minister of SMEs and Enterprises finally decides on compensation after review by the deliberation committee.

This is a similar structure to the’Corona 19 Loss Compensation Committee’ under the Ministry of Health and Welfare.

The government’s policy is not to apply retroactively to self-employment loss compensation. However, small business owners and self-employed persons who have received new business restrictions starting in March as early as the decision to compensate for losses incurred by the law `before the enforcement after promulgation` may be eligible for beneficiaries. The party administration aims to complete the revision of the Small Business Support Act in March and enforce it from August to September.

Initially, the party government held a difficult discussion over where to prepare the basis for compensation for losses. As proposed by many lawmakers, a plan was also reviewed to make grounds for loss compensation in the infectious disease prevention method, but the opposition from the Ministry of Strategy and Finance was large and it was unexploded. An official from the Ministry of Science and Technology explained, “It is because the compensation for losses may be excessively expanded if the infectious disease prevention method is based.”

A plan to enact a new’Corona 19 Special Act’ was also discussed, but the Ministry of Knowledge Economy insisted on the burden of enacting a special law whenever a new infectious disease occurs, and eventually the law was based on the Small Business Support Act. However, the provision of exceptions here means that not only small business owners but also small and medium-sized business owners will receive compensation for their losses, so the provision of financial resources is regarded as a major obstacle. The Ministry of Science and Technology has also ordered research services to resolve side effects caused by the introduction of the loss compensation system.

Korea is expected to be the first country to legalize compensation for losses. Earlier, Vice Minister Kim Yong-beom said, “It is not easy to find a country that has been legalized overseas,” and expressed difficulty in legalizing compensation for losses. For this reason, the Ministry of Knowledge Economy even conducted a second overseas case study, but it is known that it has come to the same conclusion that there are no cases of legalization abroad.

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