More than 100,000 South Koreans have filed initial claims for social welfare by May this year, near the full count for 2019, reflecting the pandemic’s devastating toll on the bottom class living off precarious earnings.

Enrollment in monthly state subsidies for basic living expenses totaled 1,999,388 as of May, up 109,764 from January, according to the Ministry of Health and Welfare on Thursday.

The number is already close to the 2019 full-year addition of 129,531.

Applications have started flooding in since the virus outbreak, adding 22,131 in March, 32,463 in April and 37,016 in May.

Under the basic livelihood security program, Korea provides cash payments and other stipends for healthcare, housing and education to those living in absolutely poverty, or those earning 30 to 45 percent less than the median income. As of 2020, a single-person household was eligible to a monthly check of 530,000 won ($443.7).

Those in the second-lowest income group also swelled 15,000 to 953,464 in May, more than triple the gain in the same period last year. They are people earning 50 percent less than the median income, but who cannot receive the state subsidies because they either have fixed assets or an income-earning family member.

“Those hovering on the poverty line appear to have been hit hard by COVID-19,” said Korean People’s Solidarity Against Poverty, a civic organization dedicated to reducing poverty. “This is largely because the virus outbreak has decimated or significantly reduced part-time construction work and other low-income jobs.”

Korea shed 269,000 part-time jobs in the first quarter compared with a year earlier, according to Statistics Korea.

The government partly attributed the rise of households on welfare to increased tax benefits for the lowest-income bracket effective this year. But it had anticipated only a 27,000 increase from the revised law, meaning the remaining 83,000 is largely due to the coronavirus impact.

Seoul also explained that some low-income households that had so far been outside the social safety net may have realized they were eligible for state welfare subsidies during the process of applying for government coronavirus relief programs.

But fears are growing that as the prolonged pandemic deals a long-term hit to the economy, some may never fully recover. Accelerated poverty rates, coupled with an erosion of the middle class, could dramatically push up social welfare costs, weighing heavily on the state budget that is already running a massive deficit due to COVID-19.

“The government should think long-term and consider expanding income tax breaks to encourage people to find jobs as well as fine-tuning welfare eligibility requirements to gradually help people get off welfare,” advised Choi Hyun-soo, researcher at Korea Institute for Health and Social Affairs.

The government is set to announce the second comprehensive state welfare plan later this month.

By Kim Yeon-joo and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]