[Yonhap]
[Yonhap]

The government will strengthen its management of at-risk households in welfare blind spots by incorporating data on victims of illegal private lending charged above the legal interest rate and those subjected to unlawful debt collection.

The Ministry of Health and Welfare said Wednesday it will seek public comment through Aug. 24 on a proposed amendment to the enforcement decree of the Act on the Use and Provision of Social Security Benefits and the Search for Eligible Recipients, which would expand the linkage of crisis information related to victims of illegal private lending and vulnerable debtors.

The ministry currently uses 47 types of crisis indicators — including utility and water shutoffs — to identify people in need of support, working with local governments to connect them with public and private welfare services.

The proposed amendment would add to the big data-based welfare blind spot detection system information on victims of illegal lenders and illegal lending brokers, as well as those subjected to unlawful debt collection. The addition would enable authorities to quickly identify and support people harmed by unregistered lending operations or illegal debt collection practices.

Information on vulnerable debtors with low income and poor credit ratings among users of policy-backed retail financial products — such as Haetsal-ron loans and illegal private lending prevention loans — would also be added.

Previously, only applicants rejected for such policy financial products were flagged for outreach. Going forward, the scope will expand to include approved applicants identified as vulnerable debtors at risk of financial difficulty.

Individual debtors whose debt restructuring plans have lapsed due to non-compliance will also be eligible for support.

Until now, only debtors with arrears of 90 days or more whose restructuring plans had lapsed were covered. The amendment would extend eligibility to debtors at risk of falling behind on payments, or those with arrears of less than 90 days, whose restructuring plans have similarly lapsed due to non-compliance.

Through this expanded data linkage, the ministry plans to proactively identify households in financial distress and help them recover from economic hardship.

Alongside this, the ministry plans to go beyond tracking water shutoffs and also monitor households showing unusual changes in water consumption, connecting them with appropriate welfare services.

The ministry will finalize the amendment after gathering broad public input during the comment period. Opinions may be submitted through Aug. 24 to the ministry's Benefits Standards Division or through the Public Participation Legislative Center.


thlee@heraldcorp.com