Self-employed workers' employment insurance subsidy expanded nationwide... Strengthening the social safety net

The Ministry of Small and Medium Risk Enterprises of Korea has expanded its employment insurance premium subsidy program for sole proprietors facing business closure risks to all metropolitan and provincial local governments nationwide, laying the foundation for small business owners to more easily access social safety nets such as unemployment benefits and vocational training.

On the 15th, the Ministry of Small and Medium Risk Enterprises announced that the employment insurance premium subsidy program for sole proprietors will be extended to operate across the 17 metropolitan and provincial systems nationwide. Employment insurance for sole proprietors is a system that, when a business closes and certain conditions are met, allows recipients to receive unemployment benefits and participate in vocational training aimed at re-employment or re-starting a business. Generally, sole proprietors are more likely than wage workers to fall outside the employment safety net, and to reduce this blind spot, the government currently provides a subsidy of 50% to 80% of insurance premiums based on standard salary levels, for up to five years.

The core of this expansion is that additional subsidies from local governments have been established nationwide. Especially, starting from May 2026, Chungcheongnam-do has newly joined the program, completing a structure where support from the central government and local governments are combined. Chungcheongnam-do plans to provide an additional 20% to 50% subsidy on insurance premiums for sole proprietors with a single business, for up to five years. Accordingly, sole proprietors in Chungcheongnam-do and Gangwon-do can combine support from both the government and local autonomous bodies, potentially receiving up to 100% of employment insurance premiums covered, allowing some to maintain insurance without personal payment.

The actual trend of enrollment is also steadily increasing. The number of sole proprietors enrolled in employment insurance rose from 17,500 in 2017 to 61,632 in 2025, a 3.5-fold increase. During the same period, new enrollees increased from 4,215 to 21,528, a 5.1-fold growth. This is interpreted as a growing awareness among sole proprietors to prepare for business closure amid intensified economic fluctuations and prolonged sluggish domestic demand. In the past, low awareness of the system and the burden of premiums were obstacles to expanding enrollment, but as the government and local governments increase subsidy support, the entry barriers seem to have lowered.

The Ministry of Small and Medium Risk Enterprises plans to support 42,200 people this year by strengthening on-site guidance and publicity. The policy’s purpose is not only to provide simple premium subsidies but also to expand the buffer mechanism to prevent small sole proprietors from falling into immediate livelihood insecurity after business closure. This trend is expected to further increase enrollment through competition among future local governments’ additional subsidies and expanded system promotion, potentially advancing the social safety net for the sole proprietorship sector.