[비즈한국] As the budget allocated for emergency welfare programs—which support low-income households struggling to make ends meet due to economic hardship—has increased, it appears that the amount of fraudulent claims has also risen. However, with the government’s recovery rate for these fraudulent funds declining, concerns are being raised that households in desperate need of government assistance may end up suffering. Given that the budget for emergency welfare programs was increased by over 20 billion won through this year's supplementary budget, critics point out the need for policies to prevent fraud and effectively recover funds from those who have claimed benefits illegally.
In his policy speech regarding the supplementary budget at the National Assembly on June 26, President Lee Jae-myung stated, "Looking at detailed economic indicators, the hardships of the public are becoming all the more evident," adding, "The number of young people who have given up on job hunting has hit an all-time high, and the number of self-employed individuals who have shut down their businesses has reached 1 million per year. The delinquency rate for household loans among the vulnerable is soaring." President Lee further emphasized, "The greatest duty of the government is to protect the lives of the people," and urged for the swift processing of the supplementary budget, declaring, "Actions that revitalize the economy and people's livelihoods, rather than ideologies and slogans, are the direction the new government will take."
Reflecting President Lee's stance of a 'government that protects the lives of the people,' the emergency welfare budget was increased by over 20 billion won through the supplementary budget. According to the Ministry of Health and Welfare, the original budget for emergency welfare programs this year was 350.1 billion won. However, the need for an increase was raised as more people required emergency welfare support due to worsening economic conditions, such as domestic demand stagnation and tariff wars, as well as the Muju International Airport passenger plane tragedy late last year. Consequently, the supplementary budget bill passed at the National Assembly plenary session on the 4th increased the emergency welfare budget to 373 billion won, an increase of 22.9 billion won from the original budget.
The emergency welfare program provides livelihood, medical, and housing support to low-income households that face difficulty maintaining their livelihood due to sudden unemployment or illness of the head of the household. The largest portion of the emergency welfare program is the livelihood allowance, which, as of this year, provides 1,872,700 won per month for a four-person household. The livelihood allowance is paid for up to 6 months per year.
The next highest cost support is for social welfare facility admission, which provides 1,494,100 won per month to four-person households, also for up to 6 months. Housing support, which helps people stay in temporary residences owned by the state or local governments if they have lost their homes due to fire, provides 662,500 won per month for a four-person household, with a payment period of up to 12 months. Medical service support for various examinations or treatments is provided within a limit of 3 million won.
The Ministry of Health and Welfare expects that due to the prolonged economic downturn and various disasters, there will be an average of 29,831 monthly cases of livelihood support and 4,320 monthly cases of medical service support this year. In fact, the fact that the execution rate of emergency welfare programs is continuously increasing due to the economic downturn has also influenced the budget increase. The execution rate of emergency welfare programs, which was 88.6% in 2021, increased to 90.7% in 2022 and 95.6% in 2023, and has since risen to 98.0% in 2024. As of May this year, the execution rate for emergency welfare programs has already reached 48.0%, and if this trend continues, it is expected to exceed last year's level.
The problem is that as the government increases the execution rate to ensure that low-income households are not pushed into crisis, there are quite a few cases where support is being received fraudulently. The amount of fraudulent emergency welfare claims identified by the government appeared to decrease from 1.617 billion won in 2021 to 1.198 billion won in 2022 and 1.133 billion won in 2023, but increased to 1.432 billion won last year. As the economy worsened, the number of people obtaining emergency welfare benefits through unfair means increased. In contrast, the recovery rate for fraudulent claims has actually dropped. The recovery rate by the number of cases fluctuated from 83.0% in 2021 to 64.3% in 2022 and 74.5% in 2023, before falling to 69.8% last year.
Due to the lower number of recoveries, the proportion of recovered funds has also decreased. The ratio of recovered funds compared to the total amount decided for recovery, which was 85.2% in 2021, fell to the 70% range at 72.0% in 2022 and 77.0% in 2023, and then dropped further to the 60% range at 63.0% last year.