South Korea Rolls Out Cash Handouts: Boosting Economy Amid Global Uncertainties

The South Korean government has announced a sweeping initiative to distribute cash handouts, set to commence on July 21, as the nation seeks to stimulate domestic consumption in the face of ongoing global economic challenges, the Korea Herald reported.

This move, forming a key part of the Lee Jae Myung administration's inaugural economic relief package, follows the National Assembly's approval of a substantial 31.8 trillion-won (approximately USD 23.3 billion) supplementary budget.

Under this plan, every South Korean citizen residing in the country as of June 18 will receive a one-time payment of 150,000 won (around USD 110). The policy, targeting increased local spending, will see the distribution of so-called 'consumption coupons' over eight weeks, concluding on September 12.

The handout scheme includes tailored assistance for specific demographic groups: those receiving national basic living allowances will get 400,000 won, and near-poverty households or single-parent families will receive 300,000 won. Additionally, to address regional disparities, individuals living outside the Seoul metropolitan area are slated to receive an extra 30,000 won, with those in designated rural and fishing communities receiving an additional 50,000 won.

The initiative allows beneficiaries to choose between receiving funds through credit, debit, prepaid cards, or local government-issued gift vouchers. While the program does not extend to foreigners, it will accommodate permanent residents, marriage immigrants and recognized refugees. A second phase of disbursements, planned for September 22 to October 31, will focus on citizens in the bottom 90 percent income bracket, providing them with an extra 100,000 won based on a forthcoming income screening process.

Vice Interior Minister Kim Min-jae emphasized the administration's commitment to ensuring the payments function effectively as a catalyst for economic recovery, enhancing consumption and aiding those most in need.

(With inputs from agencies.)