Yellow Umbrella Re-enrollees Surpass 180,000: "Payouts Enable Successful Business Restart"

Re-enrollments Surpass 188,000 as of End of June
A Vital Springboard for Small Business Owners’ Comebacks
High Re-Enrollment Rates in Economically Sensitive Food Service and Accommodation Sectors

The number of people re-enrolling in the "Yellow Umbrella" social safety net program for small business owners and the self-employed has surpassed 180,000. This increase is attributed to the growing number of self-employed individuals who, after receiving a payout due to reasons such as business closure, have successfully restarted their businesses and rejoined the program.

According to the Korea Federation of SMEs, as of the end of June, the number of people who have re-enrolled in the Yellow Umbrella program has reached a total of 188,000, the federation announced on July 28.

The Yellow Umbrella is a mutual aid program designed to support small businesses and the self-employed in case of events such as business closure, offering benefits such as an annual tax deduction of up to 6 million won, protection from seizure of the payout, and annual compound interest. During the deposit period, business owners can receive a tax deduction on business income, and in the event of business closure, retirement, or other qualifying reasons, they receive the full deposit plus annual compound interest. Starting from July this year, the deposit limit has been increased from 3 million won per quarter to 18 million won per year.

Hyukjin Yoon, a man in his 40s who rejoined the Yellow Umbrella after closing his pasta restaurant, initially joined the program in 2014 with a monthly deposit of about 400,000 won and received approximately 24 million won in payout when his business closed in 2020. Yoon said, "After my previous store closed, the payout helped me overcome the crisis and open a new restaurant."

Jisoo Lee, a self-employed business owner in her 20s who now runs a homemade pudding specialty store after closing a brunch cafe, joined the Yellow Umbrella in 2023 and received around 11 million won in payout one year later. Lee commented, "I used the payout to replace the signboard and remodel the new business location with painting and other upgrades. The tax deductions and welfare benefits were favorable, so I decided to rejoin."

The majority of Yellow Umbrella re-enrollees received payouts within five years of joining. Specifically, 54.1% received payouts in less than three years, and 20.8% received theirs between three and five years after joining, indicating that most claimants received their payout within five years.

The average payout per person was about 12 million won, and the average monthly deposit was around 280,000 won. After re-enrollment, the average monthly deposit increased by about 8% to 303,000 won.

The number of enrollees depositing the maximum monthly amount of 1 million won increased by approximately 27%, from 11,000 at initial enrollment to 14,000 upon re-enrollment. This suggests that re-enrolled members of the Yellow Umbrella program are more aware of the benefits of the payout.

In particular, the re-enrollment rate was high among the food service and accommodation sectors, which are sensitive to economic fluctuations. The number of re-enrollees in these industries reached about 50,000, accounting for 26.3% of total re-enrollees. This is roughly 9 percentage points higher than their share among all enrollees, which stands at 17.7%.

Lee Changho, head of the mutual aid division at the Korea Federation of SMEs, stated, "The high re-enrollment rate among small business owners in industries where business closures and restarts are frequent demonstrates that the Yellow Umbrella is fulfilling its role as a social safety net. We will do our best to improve the system so that more small business owners can enjoy greater benefits."

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