The South Korean National Assembly on Thursday approved a massive 26.2 trillion won supplementary budget designed to shield the economy and millions of households from the fallout of the ongoing Middle East conflict. The legislation, passed during a late-night session, prioritizes immediate cash relief for citizens struggling with soaring energy costs and provides critical subsidies to key industrial and agricultural sectors.
At the center of the package is a high oil price support fund totaling 4.8 trillion won. This initiative will provide direct payments ranging from 100,000 to 600,000 won to approximately 32.56 million people who fall within the bottom 70% of the country’s income bracket. The funds will be distributed via credit cards and local currency vouchers to stimulate regional spending while easing the burden of inflation.
The bill passed with a significant majority, receiving 214 votes in favor, 11 against and 19 abstentions among the 244 members present. While the National Assembly of Korea reached a consensus, the process was marked by political tension, with the People Power Party criticizing the cash handouts as a “vote-buying” measure.
Who is eligible for the cash relief?
The government has set the eligibility threshold for the oil price support fund at 150% of the median income. Based on last year’s data, this includes single-person households with a monthly income of approximately 3.59 million won and four-person households earning up to roughly 9.15 million won per month.
According to Budget and Finance Minister Park Hong-keun, the rollout will be phased to ensure speed. Vulnerable groups for whom administrative data is already available are expected to receive their payments within April. For the remaining eligible citizens, the government aims to complete disbursements by May.
Expanding public transit and energy security
To mitigate the energy crisis and encourage a shift toward public transportation, the budget allocates 188.8 billion won to temporarily slash K-Pass costs. A new “30,000 won Half-Price Pass” will be introduced through the “Everyone’s Card” (Modu-ui Card), offering a 50% discount. These benefits will be applied retroactively to April usage, with refunds processed in May.
The budget also addresses critical industrial supply chain disruptions caused by the blockade of the Strait of Hormuz. Funding for naphtha supply stabilization was increased to 674.3 billion won, up from the initial proposal of 469.4 billion won, to aid companies cover the rising costs of alternative imports.
| Program/Sector | Allocation | Primary Purpose |
|---|---|---|
| Oil Price Support Fund | 4.8 Trillion KRW | Direct cash for bottom 70% income earners |
| Oil Price Ceiling System | 5.0 Trillion KRW | Stabilizing national fuel prices |
| Naphtha Stabilization | 674.3 Billion KRW | Corporate import cost subsidies |
| Startup Ecosystem | 900 Billion KRW | Fostering new business growth |
| Low-Income Support | 400 Billion KRW | Rental fraud guarantees and welfare |
Support for agriculture, fisheries, and tourism
The agricultural and fishing sectors received a boost of approximately 200 billion won above the original government proposal. This includes 1.093 billion won for tax-free diesel subsidies for farmers and fishers, 528 billion won for agricultural machinery fuel subsidies, and 115 billion won to stabilize the supply and price of inorganic fertilizers.
The transport sector also saw targeted relief, with 45.9 billion won newly allocated to support charter bus operators suffering from high fuel costs. This will be supported by an amendment to the Passenger Transport Service Act. The government expanded its tourism strategy, transforming the “Jim Carry” project—originally focused on Chinese-speaking markets—into a broader “Global Market Attraction Project” to diversify international tourism.
A strategic response to geopolitical volatility
Beyond immediate relief, the supplementary budget includes long-term strategic investments. This includes 900 billion won to stimulate the startup ecosystem and 400 billion won dedicated to low-income support, including the expansion of “Just Dream Centers” and a guarantee covering one-third of deposits for victims of rental fraud (jeonse fraud).
Following the passage of the bill, Presidential Senior Secretary for Public Affairs Kang Yu-jung issued a briefing thanking both ruling and opposition parties for their bipartisan cooperation. Kang stated that the Lee Jae-myung government would focus on the rapid execution of the funds to ensure that the impact is felt immediately by the public.
The focus now shifts to the Ministry of Economy and Finance and related agencies as they establish the precise application and payment portals for the cash relief. The next major checkpoint will be the official announcement of the K-Pass refund schedule and the opening of the support fund application windows in late April.
This report is for informational purposes only. For official application dates and eligibility verification, citizens are encouraged to visit official government portals.
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