"Only Up to One-Third of the Deposit? Individual Rehabilitation Might Be Better" Frustration Over Jeonse Fraud Relief Standards

Ministry Secures 27.9 Billion Won for Minimum Support in Supplementary Budget
Payment Threshold Set at One-Third of Lost Deposit
Pending Amendment’s Standard of Half the Deposit Not Adopted

Even if victims of jeonse fraud have gone through auction or public sale procedures, the government has decided to directly provide partial financial support if the recovered amount does not reach a certain threshold. Since the enactment of the special law in 2023, the government has offered only indirect support—such as purchasing affected homes and renting them to victims, low-interest loans, and free guarantee products. However, for the first time, this year’s supplementary budget includes direct support funds.

President Lee Jaemyung has long defined jeonse fraud as a social disaster, both during his time as party leader and as a presidential candidate, and has called for active government relief measures. During the formulation of the 2026 main budget—the first budget of the current administration—his and the ruling party’s intent was not reflected due to opposition from fiscal authorities. It has only now materialized in this so-called “war-time supplementary budget.” However, there are concerns about the effectiveness of the support since the scale falls far short of the level demanded by victim groups, civic organizations, and even lawmakers.

According to information gathered from government ministries as of April 12, the Ministry of Land, Infrastructure and Transport secured 27.9 billion won in this supplementary budget under the category of minimum support funds for jeonse fraud victims. This item did not exist in the main budget and has been introduced for the first time. If officially recognized as a jeonse fraud victim, individuals will receive partial support through auction proceeds, rent subsidies, and other means. If the total support received is less than one-third of the lost rental deposit, the government will provide additional support up to the difference.

More than 220 local victims and the Daejeon Jeonse Fraud Victims Countermeasure Committee are holding a street march in Dunsan-dong, Seo-gu, Daejeon, condemning the government ruling party and Daejeon city while demanding the government to acknowledge its negligence and provide compensation. Yonhap News

Although a new budget item has been established, there is controversy for two main reasons. First, there is currently no legal basis for this support. A bipartisan amendment to the special law on jeonse fraud, which would provide the legal grounds for this financial support, has been jointly proposed by Assemblymen Bok Kiwang and Um Taeyoung, but it has yet to pass the relevant committee. The National Assembly’s Land, Infrastructure and Transport Committee has not yet convened a bill subcommittee, resulting in slow progress on the legislation.

Second, the scale of support funds was criticized during parliamentary review. Under the pending amendment, if the total amount of support received so far is less than half of the rental deposit, the government will provide the difference. For example, if a recognized jeonse fraud victim has lost a deposit of 300 million won but has received a total of 100 million won through auction proceeds, priority payments, or rent subsidies, they would not qualify for additional support under the current criteria. If the threshold were set at half the deposit, the victim would be eligible for 50 million won in support.

The “less than one-third of the deposit” standard was confirmed as the government’s initial proposal for the supplementary budget passed unchanged. This conservative criterion appears to reflect limited fiscal capacity. According to the supplementary budget review report, as of the end of last year, 35,909 people had been recognized as jeonse fraud victims. Excluding around 4,000 who have directly purchased affected homes and those who have already received support exceeding one-third of their deposit, the government estimates that approximately 4,800 people will be eligible. If payments begin in the fourth quarter of this year for those who have completed auction or public sale procedures, the government expects to fully execute this year’s allocated budget.

On the 10th, the supplementary budget worth 26.2 trillion won submitted by the government was passed at the plenary session held at the National Assembly. In this supplementary budget, 27.9 billion won was allocated for the Minimum Damage Support Fund, which directly provides cash support for the first time to victims of jeonse fraud. Yonhap News

Civic groups have consistently called for the minimum guaranteed amount to be set at at least half of the deposit. Seo Dongkyu, chairperson of Mindalpaengi Union—a group that has consistently addressed housing rights for young renters—said, “Since a special law was enacted on the grounds that active relief for victims is needed, the current minimum support level—one-third—is insufficient for meaningful impact. At this level, more people will choose individual rehabilitation proceedings rather than apply for support.” If a jeonse fraud victim opts for individual rehabilitation, there are provisions to exclude the lost deposit from their assets, shorten the repayment period, and allow recognition of additional living expenses.

Civic society and lawmakers have argued that the government should actively intervene because the proliferation of victims has exploited loopholes in a state-certified system, such as licensed real estate agents. The widespread abuse of gap investments without actual capital was largely enabled by the indiscriminate expansion of jeonse loans. Because these loans are backed by public guarantees, the state cannot avoid responsibility.

This content was produced with the assistance of AI translation services.