A 26.2 trillion won supplementary budget designed to mitigate the impact of the Middle East crisis passed the National Assembly plenary session on the 10th. The 4.8 trillion won allocation for high oil price relief payments to the bottom 70% of income earners was preserved as originally proposed by the government. The relief payments of 100,000 to 600,000 won per person are expected to be distributed starting this month, beginning with vulnerable groups.
The National Assembly convened a plenary session late in the afternoon and passed the supplementary budget. While 794.2 billion won was cut and 790.8 billion won was added, resulting in a net reduction of 3.4 billion won, the overall scale was largely maintained. Han Byung-do, floor leader of the Democratic Party of Korea, and Song Eon-seok, floor leader of the People Power Party, met several times on the deadline day to reconcile differences and reach an agreement.
Kang Yu-jeong, senior spokesperson for the Presidential Office, said in a written briefing, "We thank the ruling and opposition parties for swiftly processing the supplementary budget through bipartisan cooperation that prioritized national interest amid the crisis caused by the Middle East war." She added, "The Lee Jae-myung government will do its best for rapid execution, including pushing follow-up procedures so that this supplementary budget can be felt on the ground as quickly as possible."
100,000 to 600,000 Won Payments Starting This Month
The high oil price relief payments for the bottom 70% of income earners, the core program of this supplementary budget, passed without cuts and will now enter the actual payment process. The relief payments will be distributed to citizens in the bottom 70% income bracket based on monthly health insurance premium payments per household. The government estimates 35.8 million citizens qualify for payments. The People Power Party initially opposed the measure, calling it "election-driven," but reversed its position, saying "there are necessary elements for people's livelihoods."
The government will provide a base payment of 100,000 won per qualifying citizen, with additional support of up to 500,000 won depending on income level and residential area. Residents of the Seoul metropolitan area will receive 100,000 won per person, while those outside the metropolitan area will receive 150,000 won. Additional payments apply to population decline priority areas (200,000 won) and population decline special areas (250,000 won). Near-poverty households and single-parent households will receive 450,000 won (metropolitan area) to 500,000 won (population decline priority areas). Basic livelihood security recipients will receive 550,000 to 600,000 won. For a four-person household, payments could range from a minimum of 400,000 won to a maximum of 2.4 million won.
Actual payments are expected to be distributed in two phases. The first phase will cover basic livelihood security recipients and near-poverty households. Park Hong-keun, Minister of the Office for Government Policy Coordination, said at a National Assembly Budget and Accounts Special Committee meeting on the 7th, "For vulnerable groups whose administrative data is available, our goal is to make payments within this month. For the rest, we need to organize data using health insurance resources. We are preparing to make payments by May."
Naphtha Support and K-Pass Budget Expanded
The ruling and opposition parties agreed to create new budget items or increase existing ones for high oil price recovery measures. Instead, they maintained the overall scale by cutting budgets for programs with little direct connection to the Middle East crisis.
The parties agreed to add 204.9 billion won to stabilize naphtha supply, which has been difficult to secure due to the Middle East situation. Lee So-young, a Democratic Party lawmaker serving as Budget Committee secretary, told reporters, "In addition to the price difference support budget for naphtha import support already reflected in the original supplementary budget, we additionally reflected a budget to expand the period, volume, and targets of support."
A budget of 102.7 billion won was also added for a temporary 50% discount on K-Pass, the public transportation fare rebate service. The aim is to promote public transportation use amid expected disruptions to crude oil supply due to the Middle East crisis.
Additionally, 200 billion won in budgets were reflected for new fuel price-linked subsidies for agricultural machinery, increased fuel price-linked subsidies for tax-free diesel for farmers and fishermen, fuel cost support for coastal passenger ships, and expanded mineral fertilizer support. The parties also agreed to revise relevant enforcement ordinances to provide fuel price-linked subsidies to chartered buses, which had been excluded from existing support.
Some programs that the opposition party argued were inconsistent with the supplementary budget's purpose will see cuts. The China-origin Korea regional charter flight tourism package—criticized as the "Chinese Jim Carrey" budget—will have its budget reduced and program content improved. Short-term job program budgets will also be slightly reduced. The 110 billion won budget for SME fund-of-funds investment and 101.8 billion won for the general Tomorrow Learning Card program were also cut.
Floor leader Han said, "We formed a consensus that we must unite for the national interest during this national crisis caused by the Middle East war." Floor leader Song said, "Although I consider this a 'war-excuse supplementary budget,' we decided to process it by agreement for the people's livelihoods."
The government reflected 5.1 trillion won in this supplementary budget for fuel and transportation cost reduction, including operation of a petroleum price ceiling. It also allocated 2.8 trillion won for livelihood stabilization and 2.6 trillion won for minimizing industrial damage and supply chain stability. Local government fiscal reinforcement (9.7 trillion won) and government bond repayment (1 trillion won) were also included. The government plans to hold a Cabinet meeting on the 11th to finalize the supplementary budget and begin swift execution.
