Government Begins Designing Childcare Support Grant System for One-Person Small Business Owners

Korea Small Business Institute Launches Related Research

2.28 Million One-Person Women-Owned Enterprises

Social Safety Net Stagnating

"Thorough Review of Payment Scale and Methods"

For Ms. A, a small business owner running a flower shop in Yongsan-gu, Seoul, the distressing memories of being pregnant about three years ago are still vivid. Because she was unable to hire staff, she had to manage everything on her own. Ms. A, who continued to keep her shop open while taking morning sickness medication until just two weeks before giving birth, said, "It was not uncommon for me to run to the restroom while preparing flowers and feeling nauseous at the sink," adding, "I felt I couldn’t keep the shop closed for too long, so I took exactly two weeks off after giving birth and then resumed operations."

There is a prospect that the triple burden faced by small business owners like Ms. A, who have been struggling to run their businesses while also dealing with childbirth and childcare, may be somewhat alleviated. The government has begun designing a comprehensive support system specifically for self-employed business owners who try to juggle business and parenting, but are often driven to the brink of closure. According to the government on August 18, the Korea Small Business Institute recently began a research project on providing childcare support grants to small business owners. This comes as a follow-up to the Ministry of SMEs and Startups’ announcement earlier this month regarding its intent to introduce childcare support grants to prevent income disruption and business closures among small business owners due to childbirth or childcare responsibilities.

Through this research, the Korea Small Business Institute is expected to examine a range of options, including providing grants to help small business owners who are unable to run their businesses due to childbirth or childcare maintain some income for a certain period. The study will also cover potential recipients, payment methods, required funding, and expected outcomes. Once the research is completed, the government plans to finalize the timing and size of the support in consultation with fiscal authorities.

The main focus of the government’s plan is on "one-person small business owners," those who operate their shops without any employees. These owners are at high risk of having to suspend or close their businesses for good, as they have no one to cover in their absence due to childbirth or childcare. According to "Basic Statistics on Small and Medium Enterprises" published by the Ministry of SMEs and Startups, as of 2023, there were 2.28 million women one-person business owners, making up 82.1% of all women-owned SMEs. However, systems to support them regarding childbirth and childcare remain woefully inadequate.

The key issue is how to design the payment system for the childcare support grants. Various methods are being considered, ranging from fixed payments to eligible one-person business owners, to compensation for income lost due to childbirth or childcare. If the system is designed to supplement lost income, setting the eligibility criteria will become a major point of discussion. Whether only complete business closure will qualify as a work gap, or if reduced business hours or employing substitute staff will also make a person eligible, will determine the scope of recipients.

A representative from the Korea Small Business Institute stated, "This research is not only considering childcare support grants, but is also reviewing the introduction of a 'health care allowance' to compensate for business gaps and losses resulting from health checkups for small business owners," adding, "We are currently considering various possibilities and analyzing the impact and effectiveness of the potential new system." The research is expected to be wrapped up by the end of next month.

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