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Laws and Systems of Social Services Vouchers in Korea

Laws and Systems of Social Services Vouchers in Korea
Alternative Title
Laws and Systems of Social Services Vouchers in Korea
Publication Year
Social services; e-vouchers; services vouchers; welfare; service users
Research Report
법제교류 연구, 16-18-11
Ⅰ. Background and Purpose
□ Background of the Study
○ In terms of supplying regular public services, the Service Vouchers Systems are based on the principles of market competition to increase efficiency and effectiveness, rather than securing the publicity
- When designing the system, it is necessary to establish legal and institutional measures, such as forming of the proper supply market, securing a link between policy goals and voucher systems, etc.
- To improve the national welfare and build the effective welfare delivery system, [Act on the Use of Social Services and the Management of Vouchers] was enacted on and has been enforced since August 4, 2011.
□ Research Purpose
○ To understand various social service-related e-voucher systems of Korea and their operation
- To prepare preventive measures for negative and duplicate supplies happening in the operation of e-vouchers through analyzing the delivery system and to present the future direction for the promotion of voucher business
○ To review the configuration system and the contents of [Act on the Use of Social Services and the Management of Vouchers] and its subordinate laws in order to derive an improvement plan

Ⅱ. Main Contents
□ [Act on the Use of Social Services and the Management of Vouchers]
○ There was a discussion about the enactment of the framework act for the legal coherence regarding the social services as a whole.
○ Since the enactment of [Act on the Use of Social Services and the Management of Vouchers] on August 4, 2011, the Act was revised once on February 3, 2016.
○ Establishment and enforcement of social services provision plan
- The Minister of Health and Welfare is currently the main agent that establishes and enforces the plan, and this had resulted in the limitation in the scope of the social services. Therefore, it is necessary to broaden the main agent and consider the users’ right of choice.
○ User’s shared cost
- Even though the Enforcement Rule Article 4 of [Act on the Use of Social Services and the Management of Vouchers] specifies the contents related to the price reduction of the expenses, it does not mention specific procedures and methods for the reduction.
○ Issuance and re-issuance of service vouchers
- In terms of issuance and re-issuance of services vouchers, the efficient processing through the unification of windows is required.
○ Regulations on appeal
- There are regulations on the raising of an objection/appeal in the Enforcement Rule Article 12 Paragraph 1 and Article 5 of [Act on the Use of Social Services and the Management of Vouchers]. However, there is no regulation for specific matters regarding the appeal procedure. The procedural clarity for appeal is not sufficiently provided.
○ Social services quality control
- It is necessary to organize the evaluation committee, which includes internal and external experts, and ensure the objectivity for the fair and efficient assessment.
- For the quality enhancement of social services, it is necessary to change the frequency of the assessment (from once every three years to once a year or once every other year).
□ Social Services Vouchers
○ Characteristics of voucher
-Providers or consumers are directly or indirectly granted with purchasing power.
- Vouchers’ range of use is adjustable.
-It is possible to regulate the related service providers and beneficiaries (consumer) with necessary regulations for policy objectives.
○ Effect of voucher business
- Voucher businesses increase the amount of new employment of participating businesses and create jobs that are suitable for the disadvantaged employment group.
- The accessibility and responsiveness of services are enhanced with the transparency of government spending and the application/approval process utilizing the Internet.
○ Limitations of voucher business
- Voucher businesses might cause the spread of small service providers due to excess competition between providers, resulting in decline in service quality or rise in prices.
- Voucher monopolies and inefficiencies due to collusion between suppliers and consumers may occur. Discrimination or a labeling effect may also occur in the process of using a voucher.
○ Status of e-voucher business
- Elderly Care, Disabled Care, Region Autonomous Social Service Investment Project, Family Support for Children with Disabilities and Pregnancy and Childbirth Support Program
- After introducing the comprehensive support approach to voucher businesses since 2013, the growth rate of the number of users, the amount of usage and the number of providers and service personnel had increased by 2-3 times and contributed significantly to job creation.
○ E-Voucher project business process
- Service application submitted by service user to si-gun-gu community centers → Targets selected by community center personnel, using Haengbok-e-eum (social security information system) → Service card issued and delivered to recipient through e-voucher system → Contract with providers signed by user for using service → Service used (user’s electronic payment) → Post liquidation of voucher system (Social Security Information Service)
□ Provision method of social services
○ There are advantages of e-vouchers, such as reduction of illegal transactions and management cost and prompt collection of policy information through ensuring the real-time statistics of providers and recipients. However, there also are problems, such as initial installation cost of setting up the electronic system and privacy concerns due to potential leaks of social services information.
○ While social service policies provide the vulnerable social groups with public financial resources, it is necessary to strengthen user accountability through the application of user’s minimum shared cost. Therefore, the appropriate level of the user’s shared cost shall be determined.
○ The income level-based user’s shared costs are differentiated in order to cover the recipients of the service up to ordinary people and the middle class and to expand the market of social services.
□ Social services provision procedures
○ User of social services
- Social services can target the entire nation, but in particular, the socially disadvantaged class, such as children, women, the disabled, the elderly, low-income groups and victims of domestic(family) violence. The term for the social service targets must be specifically stated by the definition provision instead of abbreviation.
- In the case of Regional Service Investment Project, the contents and the coverage of the social services vary according to the user types and characteristics. The Regional Service Investment Project targets those below 120% of the standard median income but raises the standard of the standard median income up to 140% to target the disabled or the elderly and to provide children and teens with psychological support services.
○ Applicants of social services
- One who needs social services or his/her family members or other related persons (guardians) with the power of attorney may apply.
- If a public officer in charge of welfare ex officio applies, a protection user’s protection consent is required.
- After the review of the applicable si-gun-gu, the decisions are notified to the Social Security Information Service through Haeng bok-e-eum by 18:00 on 27th of each month.
○ Delivery process of social services
- Once the social service agreement is made between a user and a provider, the user’s shared cost is paid and a voucher is generated on the following day from the time the information is registered in the e-voucher system.
- In the case of an e-voucher card, it is issued by selecting a user after an income survey and a needs survey after submitting application.
- Service is conducted once a card is delivered by the Social Security Information Service, which runs the voucher business.
- A target’s qualification is lost in the case of self-termination, death, termination of qualification, judgment result, unused vouchers, etc.
○ Social services qualification investigation
- If necessary, consultation and a needs survey shall be conducted for the selection of user.
- When a user of social services moves in or out under the Resident Registration Act, the user shall be reexamined and re-selected in the area being moved into. As a result, there may be changes in qualifications and loss of eligibility.
- The service provision agreement is made with an individual service provider in order to use the services.
○ Process of selecting users
- Application is submitted directly to eup-myeon-dong community centers where the target resides.
- Information regarding user’s service selection is provided by the person in charge of eup-myeon-dong or health center personnel (agreement procedure is processed regarding user compliance details and use of user’s personal information.).
- After collectively reviewing and judging on the target’s health, need condition and household income, the result of user selection is notified through ‘Haengbok-e-eum’.
- In the case of objection from the receipt of the user selection result or suspension of the support notice, the appeal shall be raised by preparing and submitting the application form for appeal.
□ The continuous upgrading of social service voucher system is required due to the changes in the newly developed IT technology and the institutional changes regarding the program changes that are required by the government.
□ The legal institutionalization of the services is required in order to universalize social services.
□ The allotment of service resources, selection of the user, the method of government support, and division of roles of the policy participants shall be clearly defined by law.
□ The stability of the system and operations must be reinforced continuously.

Ⅲ. Expected results
□ Data will be provided regarding Korea’s social services vouchers legislation and the current status of voucher system.
□ The improvement plan shall be presented through the review of the configuration system and the contents of [Act on the Use of Social Services and the Management of Vouchers] and its subordinate laws.
□ The development experience of the Korea’s social services vouchers will be shared, and the legal cooperation through the mutual exchange will be promoted.
Table Of Contents
Chapter 1 Introduction 17
Ⅰ. Necessity and Purpose of the Study 17
Ⅱ. Related Laws and Development 18

Chapter 2 Laws on Use of Social Services and Development 21
Ⅰ. Pre-Enactment Discussion 21
Ⅱ. Related Laws and Development 24
Ⅲ. Composition System and Main Content 39

Chapter 3 Social Service Voucher 65
Ⅰ. Concept and characteristics of the voucher 65
Ⅱ. Status of Electronic Social Service Voucher Project 73
Ⅲ. Work Process of Social Service Electronic Voucher Service 93

Chapter 4 Provision Method of Social Service 99
Ⅰ. Form of Right to Use Social Service 99
Ⅱ. Differential Burden and Support 103

Chapter 5 Social Service Provision Procedure 113
Ⅰ. User and Applicant of Social Service 113
Ⅱ. Provision Process of Social Service 117
Ⅲ. Survey of Qualification for Social Service 119
Ⅳ. Procedure to select User 123

Chapter 6 Conclusion 127
Ⅰ. Summary 127
Ⅱ. Suggestions 132

References 135
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