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People Abusing System to Get Jobless Benefits

Posted April. 20, 2009 07:47,   


A 28-year-old woman in Seoul’s Jungrang district quit her job with a broadcast production company late last year after she got married.

She was ineligible for unemployment benefits since she resigned, but received them illegally by falsifying on documents that she was fired.

After marriage, she had no intent to get a job but still applied for jobs at small and medium-size enterprises on a regular basis. She did so because she needed documents to submit to the Labor Ministry’s job center every one to four weeks to receive unemployment benefits.

Three companies offered her jobs, but she declined and instead received unemployment benefits for three months through fraud.

“I felt sorry as I had job interviews with companies I had no plans to join,” she said, but added unapologetically. “I still think it’s better for me to get unemployment benefits as long as I can.”

○ Many don’t show even when hired

Many jobseekers are applying for jobs with smaller companies to receive unemployment benefits even if they have no intent to work. A significant portion of people who submit applications to such companies seek to join conglomerates or not land jobs, and hence they fail to show up for work even if hired.

The head of a small metallic company in Ansan, Gyeonggi Province, said, “We posted a job announcement for an experienced worker early this year. We decided to hire a retiree from a mid-size company, but he didn’t come to work. I later found out that another company near mine hired him but he didn’t show there either.”

“This person seems to be applying for positions at nearby factories to receive unemployment benefits. I suffered more psychological disappointment than physical damage.”

Guk Jong-yeol, CEO of Samhwa Industries and vice chairman of the Korea Federation of Small and Medium Business, told a recent forum, “When we decide to hire a qualified person, he or she doesn’t show up by making an excuse.

“Even when I called a person whom I’d interviewed in the morning to come for work, he wouldn’t come because he said he’d been hired by another company.”

Smaller companies say these people give the wrong impression that labor shortages at smaller companies have eased by increasing the number of applicants. They said that since hiring costs money, measures are needed to prevent such a practice.

○ Crackdown on jobless benefits fraud

According to the Labor Ministry, the number of unemployment benefits recipients increased 53.4 percent from 290,000 in March last year to 445,000 last month. The number of beneficiaries reached an all-time high in the first quarter this year as the economic crisis deepened. Smaller companies and welfare experts say many of these beneficiaries are taking advantage of the system.

A ministry official said, “We randomly pick two to five percent of applicant documents and confirm their eligibility with their employers to crack down on unqualified beneficiaries.”

Once caught, illegal beneficiaries must not only repay the unemployment benefits but also double the amounts as fines.

The official said, however, “If such beneficiaries submit fake documents, they can be punished but those who go to job interviews but give up employment can hardly be considered illegal beneficiaries.”

Experts say the government lacks oversight over people who commit this type of fraud. Kim Jin-soo, a social welfare professor at Yonsei University in Seoul, said, “In European countries including Germany and Austria, if a person receiving unemployment benefits reject jobs three or four times without justification after being hired, they are construed as having no intent to work and get their benefits cut off.”

“Korea lacks after-employment oversight for checking whether those beneficiaries actually work after finding jobs.”

Cho Joon-mo, an economics professor at SungKyunKwan University in Seoul, said, “If someone gets unemployment benefits, he or she must under thorough monitoring as in Japan to determine eligibility. The government must also toughen punishment for unqualified beneficiaries.”

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