🚨 Sickness Allowance

Today Korean Social News for Beginners | 2025.09.13

0️⃣ From Right to Rest When Sick to Support for Return to Work

📌 Not Just a 'Rest System' but 'Return Support'... Sickness Allowance Design Discussions Begin Ahead of Full Implementation

💬 The sickness allowance system is being redesigned to go beyond simply guaranteeing the right to rest when sick, to consider return to work after treatment. The government is expanding pilot programs and coordinating system design with the goal of full implementation in 2027. So far, about 13,000 people have received benefits, with most being non-regular workers, low-wage workers, and self-employed individuals. While financial burden and fairness issues remain controversial, positive effects have been confirmed, including a decrease in the rate of "going to work while sick" and more cases of receiving timely treatment after the system was implemented. Korea was the only OECD member country without a sickness allowance system, but is now putting together the final piece of the puzzle.

💡 Summary

• Sickness allowance is a system that provides income support when unable to work due to non-work-related illness or injury.
• With the goal of full implementation in 2027, it is being designed to go beyond simple cash payments to support treatment and return to work.
• Financial requirements vary greatly depending on waiting period, coverage days, and payment level, requiring careful system design.

1️⃣ Definition

Sickness allowance refers to a system that provides minimum income support during treatment periods for workers who cannot work due to illness or injury unrelated to work. It is a social insurance benefit paid during time off due to general illness or accidents, not industrial accidents.

This is a social safety net that helps workers focus on treatment without financial burden even when they are sick. Korea was the only OECD member country without a sickness allowance system, but started pilot programs in 2022 with the goal of full implementation in 2027.

💡 Why is this important?

• It solves the problem of people forcing themselves to go to work because of financial concerns even when sick.
• It prevents diseases from worsening by not missing appropriate treatment timing.
• It contributes to public health by preventing the spread of infections in workplaces.
• It improves overall labor productivity and health levels in society.

2️⃣ Current Status and Results of Sickness Allowance Pilot Programs

📕 Pilot Program Operations and Beneficiary Characteristics

• Pilot programs are being expanded step by step. Key status includes:

  • Started in 6 regions in July 2022 and has now expanded to 25 regions.
  • Covers both regional subscribers (self-employed, etc.) and workplace subscribers (employees).
  • Paid for up to 90 days when receiving inpatient or outpatient treatment for 4 consecutive days or more.
  • Daily payment amount is 60% of standard monthly income divided by 30 days.

• Beneficiary characteristics are clearly emerging. Key features include:

  • About 13,000 people have received benefits, with over 60% being women.
  • Middle-aged and older adults aged 50 and above show relatively high usage rates.
  • Non-regular workers, low-wage workers, and self-employed individuals show high utilization.
  • Regular employees and civil servants have relatively low usage rates due to existing sick leave systems.
  • Most common uses are for musculoskeletal diseases, digestive diseases, and respiratory diseases in that order.

📕 Positive Effects and Changes of the System

• The culture of 'going to work even when sick' is improving. Key changes include:

  • The rate of going to work with symptoms is showing a decreasing trend in pilot program areas.
  • Cases of delaying or giving up treatment due to financial burden have decreased.
  • Cases of recovery through early treatment before diseases worsen have increased.
  • Effects of preventing infection spread in workplaces have also been confirmed.

• Changes in social awareness are also appearing. Key effects include:

  • Awareness that resting when sick is natural is spreading.
  • Employers are also taking more interest in employee health management.
  • Social consensus is forming that health rights are important as basic worker rights.
  • The necessity of the system has been further highlighted through COVID-19 experience.

💡 Key Results of Sickness Allowance Pilot Programs

1. Cultural Improvement: Shift from 'going to work even when sick' to 'resting when sick' culture
2. Early Treatment: Promoting health recovery through timely treatment without financial burden
3. Infection Prevention: Improving public health by blocking disease transmission in workplaces
4. Protecting Vulnerable Groups: Eliminating blind spots for non-regular workers and self-employed individuals
5. Social Consensus: Raising social awareness about health rights

3️⃣ Key Issues and Challenges in System Design

✅ Financial Sustainability and System Design

• Waiting period and coverage days are key design elements. Key considerations include:

  • Financial requirements vary greatly depending on how the waiting period is set.
  • Current pilot programs require 4 consecutive days or more, but this may be adjusted in the full program.
  • Coverage days are also being reviewed for extension from current 90 days to 120 or 180 days.
  • Payment level is being discussed for upward adjustment from 60% to 70% of standard monthly income.

• Careful approach based on financial projections is needed. Key outlooks include:

  • According to research institute estimates, differences in condition settings could result in trillions of won in differences by 2050.
  • If payments start from day 1 without a waiting period, financial burden would increase rapidly.
  • Whether income standards apply and upper limit settings also greatly affect finances.
  • Funding methods such as health insurance premium increases or expanded government support must also be discussed together.

✅ Fairness and System Integration Challenges

• Fairness issues with existing systems are being raised. Key issues include:

  • Regular employees have paid sick leave, so sickness allowance benefits are relatively small.
  • Civil servants can use sick leave for up to 1 year, raising fairness controversies.
  • On the other hand, non-regular workers and self-employed individuals have no existing protection, so sickness allowance effects are large.
  • This may result in differences in system benefits between different groups.

• Development is moving toward linking treatment and return to work. Key directions include:

  • Going beyond simple cash payments to include active treatment support.
  • For long-term sick leave takers, linking vocational rehabilitation or reemployment support.
  • Managing appropriate treatment periods through cooperation with medical staff.
  • Building monitoring systems to prevent abuse.
  • Ultimately aiming to maintain healthy workforce and improve productivity.

4️⃣ Related Term Explanations

🔎 National Health Insurance Act Article 50

• This article provides the legal basis for sickness allowance payments.
  • National Health Insurance Act Article 50 is a provision that allows the National Health Insurance Corporation to provide additional benefits such as sickness allowance in addition to medical benefits to subscribers. This article serves as the legal basis for introducing the sickness allowance system, and specific operational plans are currently being reviewed through pilot programs.
  • Key contents of the law include: First, it specifies that the corporation provides medical benefits for subscribers' illnesses, injuries, and childbirth. Second, it stipulates that sickness allowance, funeral expenses, and other benefits can be paid in addition to medical benefits. Third, it delegates the types of benefits, payment standards, and payment procedures to be determined by presidential decree.
  • Based on this provision, the government is gradually introducing the sickness allowance system, and plans to prepare specific enforcement ordinances for full implementation based on experience gained through pilot programs. The legal foundation is already in place, ensuring stability for system introduction.

🔎 Standard Monthly Income

• This is the income that serves as the basis for calculating health insurance premiums and benefit payments.
  • Standard monthly income refers to the monthly income that serves as the basis for calculating insurance premiums and paying various benefits in national health insurance. It is used to determine subscribers' income levels for premium assessment and as a basis for calculating payment amounts when paying benefits such as sickness allowance.
  • Methods for calculating standard monthly income include: First, for workplace subscribers, it is calculated by combining earned income and business income. Second, for regional subscribers, income, property, and living standards are comprehensively considered. Third, minimum and maximum amounts are set to prevent excessive differences. Fourth, it is adjusted annually to reflect income changes.
  • For sickness allowance, daily payment amount is calculated by dividing 60% of standard monthly income by 30 days. For example, if standard monthly income is 3 million won, the daily sickness allowance payment is (3 million won × 60% ÷ 30 days) = 60,000 won. This is designed at an appropriate level that reduces living cost burden while preventing excessive payments.

🔎 OECD Social Security Statistics

• This is data that comprehensively compares and analyzes social security systems of OECD countries.
  • OECD Social Security Statistics is international statistics that comprehensively compares and analyzes the current status and expenditure scale of member countries' social security systems. It serves as important reference material for objectively evaluating each country's social security systems and setting policy directions.
  • Key contents related to sickness allowance include: First, 37 out of 38 OECD member countries operate sickness allowance systems. Second, waiting periods vary from 0 to 14 days by country. Third, coverage periods also vary greatly from 26 weeks to 2 years by country. Fourth, payment levels are at 60-100% of average income.
  • Korea has been classified as the only OECD member country without a sickness allowance system. This has been pointed out as a blind spot in the social security system and has been internationally regarded as an important indicator for evaluating the completeness of Korea's social security system. With the introduction of sickness allowance, Korea will finally have a social security system that meets OECD standards.

5️⃣ Frequently Asked Questions (FAQ)

Q: What is the difference between sickness allowance and workers' compensation insurance?

A: Different systems apply depending on work-relatedness.

• Sickness allowance and workers' compensation insurance have clear differences in scope and coverage. First, workers' compensation insurance only applies to work-related accidents or illnesses, while sickness allowance applies to general illnesses and injuries unrelated to work. Second, workers' compensation provides 100% medical benefits and 70% of average wages for temporary disability benefits, while sickness allowance is at 60% of standard monthly income. Third, workers' compensation is paid until treatment is completed, while sickness allowance is limited to a maximum of 90 days (extension being reviewed for full implementation). Fourth, workers' compensation premiums are paid by employers, while sickness allowance is included in health insurance premiums and jointly paid by subscribers and employers.
• The two systems are mutually exclusive, so you cannot receive both at the same time, and if recognized as a work-related accident, workers' compensation takes priority. Sickness allowance serves as a social safety net for general illnesses and injuries not covered by workers' compensation.

Q: How much will health insurance premiums increase with the introduction of sickness allowance?

A: While it varies depending on system design, gradual increases are expected to be unavoidable.

• The scale of health insurance premium increases due to sickness allowance introduction varies greatly depending on system design direction. First, annual budget requirements could differ from hundreds of billions to trillions of won depending on waiting periods and coverage days. Second, expanding nationwide at current pilot program levels (4-day waiting period, maximum 90 days) is estimated to require about 1 trillion won annually. Third, converting this to health insurance premium rates, an increase of about 0.1-0.3 percentage points would be needed. Fourth, gradual introduction is being reviewed to ease the shock of sudden premium increases.
• The government is working to minimize financial burden through expanded government support, medical cost savings from health promotion effects, and increased premium income from economic activity promotion. In the long term, social benefits are expected to exceed costs through maintaining healthy workforce and improving productivity.

Q: Can self-employed individuals also receive sickness allowance?

A: Yes, as regional subscribers they can receive sickness allowance and may actually benefit more.

• Self-employed individuals are major beneficiaries of the sickness allowance system as regional health insurance subscribers. First, they can apply for sickness allowance under the same conditions as workplace subscribers, receiving payments for up to 90 days when receiving treatment for 4 consecutive days or more. Second, daily payment amounts are calculated at 60% of standard monthly income, reducing economic burden. Third, since self-employed individuals previously had no income protection system when sick, sickness allowance effects are expected to be particularly large. Fourth, usage rates among self-employed individuals are quite high in pilot programs.
• However, there may be some difficulties in calculating standard monthly income due to the difficulty of determining self-employed individuals' income. To supplement this, the government is applying a method that comprehensively considers reported income, property, and living standards, and plans to introduce more sophisticated income calculation methods during full implementation.

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