SEOUL, July 12 (AJP) - South Korea plans to roll out a nationwide sick pay program in the second half of next year, extending income support to all eligible workers who are unable to work because of illness or injury outside the workplace, after four years of pilot projects that paid more than 20 billion won in benefits.
The Ministry of Health and Welfare has begun consultations with labor groups, medical professionals and other stakeholders ahead of the nationwide launch, which would make South Korea one of the last OECD members to introduce a statutory sickness benefit system.
The expansion comes as policymakers seek to strengthen the social safety net by guaranteeing workers the right to recover without losing their income, an issue that gained urgency during the COVID-19 pandemic when many employees continued working while ill for financial reasons.
Sick pay provides income replacement for workers who are temporarily unable to work because of illnesses or injuries unrelated to their jobs. Unlike industrial accident compensation, the benefit covers ordinary illnesses and non-work-related injuries.
Among the OECD's 38 member states, South Korea and the United States remain the only countries without a nationwide sick pay scheme. Switzerland and Israel do not operate separate statutory sickness benefit programs but instead require employers to provide paid sick leave and protect employees from dismissal during illness.
The legal basis already exists under Article 50 of the National Health Insurance Act, which authorizes sickness benefits as an additional health insurance benefit.
The government argues the system serves multiple policy goals beyond income support.
It helps prevent households from falling into poverty following illness, encourages early diagnosis and treatment by reducing fears of lost wages, limits productivity losses caused by employees working while sick, and reduces the spread of infectious diseases in workplaces and communities.
The ministry first launched pilot projects in July 2022 across six municipalities before expanding them in 2023 and 2024 to a total of 14 regions under different payment models designed to compare policy effectiveness.
As of the end of May this year, the pilot program had paid a combined 20.37 billion won ($14.7 million) to 14,141 recipients.
Each recipient received benefits for an average of 30.4 days, amounting to roughly 1.44 million won per person.
Workers in their 50s accounted for the largest share of recipients at 40.3 percent, followed by those in their 40s with 23.8 percent and workers in their 60s with 20.8 percent.
Regular employees enrolled in the National Health Insurance system represented nearly three-quarters of recipients at 72.7 percent, while 2,730 self-employed workers and 1,128 workers covered by employment or industrial accident insurance also received payments.
The current pilot allows eligible workers who are unable to work for more than seven consecutive days because of illness or injury to receive benefits after a seven-day waiting period, with coverage lasting up to 150 days depending on the program model.
The scheme generally pays 60 percent of the minimum wage, while some later pilot models link benefits for salaried workers to 60 percent of their recent average earnings, subject to minimum and maximum payment limits.
Eligibility currently depends on employment status, insurance coverage and, in some pilot regions, household income. Public officials, recipients of overlapping welfare benefits, workers on ordinary leave and several other groups are excluded.
Financing remains the biggest obstacle.
The government expects the full-scale program to cost between 273.7 billion won and 785.3 billion won annually, depending on the waiting period, benefit duration and payment formula adopted.
Officials intend to finance the program through the National Health Insurance system, following the practice of many OECD countries that operate sickness benefits through social insurance rather than general taxation.
According to the National Assembly Budget Office, the National Health Insurance reserve fund could be exhausted by 2029 under current healthcare reform spending plans, two years earlier than previously projected.
Labor unions have called for a separate funding mechanism dedicated to sick pay rather than relying solely on health insurance finances. Medical groups have also urged the government to increase direct fiscal support, arguing that existing state contributions to the health insurance system should be supplemented to finance the new benefit.
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