[비즈한국] May 1st is May Day, also known as Labor Day. However, many workers are still on the job today. Is the life of the South Korean worker improving? Fortunately, the number of workers receiving industrial accident compensation insurance (workers' compensation) and the total amount of benefits paid have both increased significantly over the past ten years.
The Nara Institute for Economic and Social Research, which studies public finance and policy (Director Jung Chang-soo, authored by Senior Researcher Kim Min-soo), analyzed the status of industrial accident insurance payouts from 2014 to 2023 to indirectly assess safety conditions in industrial workplaces and the level of worker protection. According to this analysis, the number of people receiving workers' compensation grew by 58.0%, from 252,106 in 2014 to 398,324 in 2023. The total payout amount increased by 85.5%, from approximately 3.9 trillion won in 2014 to approximately 7.3 trillion won in 2023.
Overall Number of Recipients Increases, While Only Injury and Disease Compensation Benefits Show a Downward Trend
The number of people receiving medical care benefits, which account for the largest share of workers' compensation, increased by 128,946 (76.5%), from 168,566 in 2014 to 297,512 in 2023. The average annual growth rate was 6.5%, higher than the average for all benefits (5.2%). While there were high growth rates of 13.7% and 13.6% in 2019 and 2020 respectively, it saw a slight decrease of -0.1% in 2022 before increasing by 2.2% in 2023.
Temporary disability benefits increased by 58,885 (53.1%), from 110,843 in 2014 to 169,728 in 2023. The average annual growth rate was 4.8%.
Disability benefits (lump sum/pension) increased by 21,796 (23.3%), from 93,719 in 2014 to 115,515 in 2023. The average annual growth rate was 2.4%, lower than the overall average.
Bereavement benefits (lump sum/pension) increased by 12,290 (51.0%), from 24,103 in 2014 to 36,393 in 2023. The average annual growth rate was 4.7%, maintaining a relatively stable upward trend.
Injury and disease compensation pensions were the only benefits to show a continuous downward trend. They decreased by 1,827 (-36.1%), from 5,058 in 2014 to 3,231 in 2023. The average annual growth rate was -4.9%. The decline was consistent across all years, with 2023 recording the largest drop at -7.9%.
Funeral expenses increased by 287 (13.2%), from 2,169 in 2014 to 2,456 in 2023. The average annual growth rate was 1.4%, though there was significant annual variation.
Nursing care benefits decreased by 762 (-13.9%), from 5,487 in 2014 to 4,725 in 2023, with an average annual growth rate of –1.6%.
Vocational rehabilitation benefits decreased by 1,199 (-28.2%), from 4,245 in 2014 to 3,046 in 2023, with an average annual growth rate of -3.6%. There was significant annual fluctuation, with a 21.2% increase in 2019 followed by a sharp decline of -20.1% in 2020.
Total Payout Increased by 85% Over the Past 10 Years
The total amount of workers' compensation payouts increased by approximately 3.3584 trillion won (85.5%), from about 3.9 trillion won in 2014 to about 7.3 trillion won in 2023, with an average annual growth rate of 7.1%. Notably, 2018 saw a high growth rate of 13.5%, an increase of approximately 597.9 billion won compared to the previous year.
Medical care benefits increased by approximately 778.1 billion won (105.1%) in 2023 compared to 2014, with an average annual growth rate of 8.3%. Growth rates were particularly high in 2018 and 2020 at 20.3% and 20.7%, respectively. After the only decrease in 2022 (-3.2%), it rebounded to 15.4% in 2023.
Temporary disability benefits increased by approximately 1.0854 trillion won (139.3%) in 2023 compared to 2014, with an average annual growth rate of 10.2%. It has been showing a steady upward trend.
Injury and disease compensation pensions decreased by approximately 22.7 billion won (-13.6%) in 2023 compared to 2014, showing an average annual decline of -1.6%. It was the only benefit to show a downward trend for 10 years before rebounding in 2023 with a growth rate of 4.9%.
Disability benefits increased by approximately 1.0323 trillion won (61.9%) in 2023 compared to 2014, recording an average annual growth rate of 5.5%. It accounts for the largest share of total industrial accident benefits in terms of amount.
Bereavement benefits increased by approximately 467.8 billion won (98.1%) compared to 2014, showing an average annual growth rate of 7.9%. Payments in the form of pensions are overwhelmingly more common than lump sums, and pension payouts are consistently increasing.
Funeral expenses increased by approximately 11.8 billion won compared to 2014, a growth rate of 48.3%.
Nursing care benefits decreased by approximately 3.1 billion won compared to 2014, recording a growth rate of -5.8%. Along with the injury and disease compensation pension, it showed a 10-year downward trend before rebounding slightly to a 1.8% growth rate in 2023.
Vocational rehabilitation benefits increased by approximately 8.7 billion won compared to 2014, a growth rate of 52.0%.
Sharp Increase in Per-Capita Temporary Disability Benefits
Insurance benefits per person increased by 2,713,951 won, from 15,575,033 won in 2014 to 18,288,984 won in 2023. The total growth rate was 17.4%, with an average annual growth rate of 1.8%. By year, the largest increase occurred in 2018 (8.2%), while the largest decrease was in 2021 (-2.4%).
Medical care benefits per person increased by 711,240 won, from 4,393,376 won in 2014 to 5,104,616 won in 2023, a 16.2% increase. After a downward trend from 2015 to 2017, it saw a significant increase of 13.3% in 2018, followed by alternating increases and decreases, before returning to an upward trend after 2022.
Temporary disability benefits per person increased by 3,955,448 won, from 7,031,407 won in 2014 to 10,986,855 won in 2023, a 56.3% increase. This shows a very high growth rate (56.3%) compared to other items and is consistently on the rise.
Sharp Increase After ‘Expansion of Industrial Accident Insurance’ in 2018
The scale of industrial accident insurance payouts and the number of recipients have shown a continuous upward trend over the past decade, with growth particularly steep after 2018. The Nara Institute for Economic and Social Research analyzed that this stemmed from institutional changes. This is because in 2018, the coverage of industrial accident insurance was expanded to all workplaces, and the scope of recognition for commuting accidents was also increased.
In this context, it was predicted that the number of industrial accident medical cases would increase in 2023 as special employment workers and platform workers (effective July 1, 2023) became eligible for coverage following the amendment of the ‘Industrial Accident Compensation Insurance Act’ in June 2022.
Another notable point in the analysis is that insurance and medical care payouts decreased between 2020 and 2021. The institute believes this may be related to changes in medical utilization patterns or a contraction in economic activity due to the COVID-19 pandemic.
The Nara Institute for Economic and Social Research emphasized that “the observed 3-4 year cycle of fluctuations in insurance and medical care benefits suggests a connection with policy changes, economic conditions, or institutional factors,” and that continuous monitoring and analysis of the status of workers' compensation are essential to realize the public value of efficient social safety net operation and the protection of workers' rights.
In particular, they stressed, “Institutional interest and environmental efforts from local governments are necessary,” adding, “We must strive to build regional integrated support systems to help workers return to work and develop customized industrial accident support policies for local regions.”
*Reference
https://narasallim.net/report/743