Welfare Renters to Get Coupons Instead

Starting next year, welfare recipients may get rent coupons that allow them to choose where they want to live instead of cash. The government also plans to distribute coupons to low-income family children, so that they can pick out after-school programs that they want to take part in, according to a government economic coordination meeting yesterday.

Deputy Prime Minister and Minister of Finance and Economy Han Duck-soo presided over the meeting held at the Central Government Complex and discussed these ideas as a part of “measures for expanding free-market elements into public service.”

Under a voucher system, welfare recipients would receive coupons that would allow them to choose services that they want, and afterward the government would pay an equivalent amount. Currently, low-income individuals receive educational and housing aid in the form of cash assistance.

The voucher system was introduced in vocational training to help participants choose favorable courses, and may finally expand into the realm of welfare.

Until now, as housing assistance, the government distributed rentals constructed by the Korean National Housing Corporation to low-income families. However, this new measure permits welfare families to choose any house they want, and pays deposits in the form of coupons. The landlords of these houses would then be reimbursed by the government later.

Additionally, the government is also distributing coupons, instead of cash, to children from low-income families and families in farming and fishing villages, which will allow them to participate in after-school programs for free.

The Ministry of Education and Human Resources Development plans to apply this voucher system to welfare recipients beginning next year, and expand it to those whose income is 20 percent more than the minimum cost of living (the minimum cost is annually declared by the government and used as one of the barometers in selecting welfare recipients) starting in 2008.

The Ministry of Finance and Economy also plans to implement this system in early 2007 after deciding the maximum amount that recipients can spend through coupons.

legman@donga.com