Since September 6, the South Korean government has been handing out another round of COVID-19 relief funds to the bottom 88% of the income bracket. Eligibility is assessed based on health insurance premiums that are levied based on an individual's income and property owned. Permanent foreign residents and marriage immigrants are also eligible as long as they meet the health insurance qualifications. Those who are eligible can apply for the relief fund of 250,000 KRW online at credit card or health insurance corporation websites and mobile apps. Recipients can choose to receive the fund through credit card or debit card, as a local gift certificate, or as a prepaid card. Funds can be spent in most small neighborhood businesses like traditional markets, local supermarkets and restaurants, and franchised convenience stores and cafes, but not in department stores, malls, and large supermarket chains.

The goal of the relief funds is to help economic recovery and provide assistance to households hit particularly hard by the pandemic. As new confirmed cases continue to increase and social distancing rules remain strict, the national economy surely needs assistance, but whether the relief funds are effective, accessible, and fair remains questionable.

Many have argued that the current eligibility criterion is not fair. Because health insurance premium is assessed as a household, not as an individual, some felt that they were unfairly left out of receiving benefits. For example, a household where both parents work and pay a high amount of health insurance may not be able to receive the relief fund, while a single retiree owning many properties may receive funding. Adults who work and live separately from their parents but are under the same health insurance receive funding based on their parents’ income level rather than their own. The government has allowed citizens to file complaints, but it is unclear what re-evaluation will be involved and how long the process will take. Furthermore, as the eligibility criteria and the processes in obtaining funds are complicated, relief funds can be hard to obtain even for those who are eligible. Especially for senior citizens who are not as tech savvy and other people in the welfare blind spot, the application process and use of funds can be difficult. 

Due to these shortcomings of the national level relief funds, many local governments have announced to give out relief funds to the top 12% who were previously ineligible. However, it seems that the debate around who should receive how much relief funds is centered around political motivations rather than economic considerations. As the elections draw near, politicians have been competitively calling for more subsidies and funding for their political gain rather than real concerns for the constituents. Daejeon is one of the few municipalities that has not announced a handout of additional funds. 

Along with the question about eligibility and fairness, there exists a more fundamental question about the efficiency of these funds. Previously, there were four rounds of COVID-19 relief funds. The first round of relief funds was given to all households, regardless of income and property owned. The next three rounds were focused on providing assistance to businesses hit by social distancing rules. Evaluations on the impacts of previous relief funds have been mixed. Researchers at the Korea Development Institute (KDI) have calculated that only 30% of the relief fund was used for additional consumption. Others have calculated it as high as 78%. According to the OECD, the South Korean government spent around 60 trillion KRW in COVID-19 relief funds in 2020, effectively increasing its debt to over 50% of the annual GDP for the first time ever. Estimated effect of relief funds on an increase in GDP is less than 0.2%, far too little to call it a real booster to the economy. Rather than setting an arbitrary cut-off for the relief funding, the government should seek better ways to distribute the limited resources.

While most would agree that the most vulnerable groups need the greatest policy attention, the COVID-19 virus does not discriminate based on income level, not to mention the national health insurance premium. Free handouts are always to be appreciated, but 250,000 KRW is certainly not enough to alleviate situations of most households, and with large amounts of budget spent on relief funds, there would be less budget available for programs tailored for the people in most need. The latest relief funds demonstrate how unclear policy objectives lead to ambiguous results. Had the government narrowed the focus to emergency relief, and not economic recovery, discussions around implantation and evaluation of the policy would have been more productive.