Get Paid While Resting When Sick... Sickness Allowance to Expand Nationwide in Second Half of Next Year

Institutionalization Accelerates as Need Grows After COVID-19 Pandemic
Pilot Project Nears Completion; Health Insurance Funding Most Likely

The government is planning to convert the sickness allowance, which has been operated as a pilot project, into a nationwide full-scale project starting in the second half of next year, and to expand the eligibility for payments to all citizens.

According to Yonhap News Agency on July 12, citing the government and civil society organizations, the Ministry of Health and Welfare recently held a meeting to discuss the implementation of the full-scale sickness allowance project and shared plans for nationwide rollout in the second half of next year.

The sickness allowance is a social security system that provides income replacement for a certain period when people are unable to work due to illness or injury unrelated to their work, allowing them to focus on treatment. The system is also expected to help reduce so-called "presenteeism," where individuals go to work despite being ill, and to prevent the spread of infectious diseases. The necessity for such a system has grown even greater since the COVID-19 pandemic.

The government will convert the sickness allowance, which has been operated as a pilot project, into a nationwide full-scale project starting in the second half of next year. Yonhap News Agency

Among the member countries of the Organisation for Economic Co-operation and Development (OECD), most operate a sickness allowance system, with the exception of Korea and the United States. In Germany and France, a significant portion of wages is replaced for a certain period based on health insurance, and the United Kingdom also supports workers’ income through statutory sick pay. Since July 2022, Korea has been preparing for full-scale implementation by conducting a three-phase pilot project for employed people aged 15 to 64.

From the start of the pilot project until the end of May this year, a total of KRW 20,367,000,000 was paid out in sickness allowances. The number of recipients was 14,141, with each person receiving about KRW 1,440,000 on average for 30.4 days. By age group, those in their 50s accounted for the largest share at 40.3%, followed by those in their 40s and 60s. Employees covered by workplace health insurance made up 72.7% of all recipients, and the support also included the self-employed and those covered by employment and industrial accident insurance.

Based on the results of the pilot project, the government is working to clarify the eligibility criteria, benefit levels, and operational methods for the full-scale nationwide project, aiming to implement it in the second half of next year. Last year, the government discussed the system design with an expert advisory group, and this year it is collecting feedback from stakeholders, including labor and medical sectors.

It is highly likely that the funding will come from health insurance benefits. The current National Health Insurance Act stipulates that sickness allowances can be paid as a health insurance benefit, and most OECD countries that operate medical security systems also finance their sickness allowance schemes through social insurance rather than taxation.

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