Guidelines on

Industrial Accident Compensation Insurance

In the Republic of Korea

March. 2005

March, 2005.

Research Division, Insurance Management Department

Korea Labor Welfare Corporation

94-267 Yeongdeungpo Dong 2 Ga, Yeongdeungpo Gu, Seoul, The Republic of Korea, 150-981

Tel  : (82)-2-26700-267, 330, 366

Fax : (82)-2-26700-489

Home page : http://www.welco.or.kr

Contents

Part Ⅰ. Overview on the Industrial Accident Compensation Insurance	1

Section 1. Industrial Accident Compensation Insurance Program	1

Section 2. The System to Manage the IACI	3

Part Ⅱ. Application of the IACI	4

Section 1. Application of the insurance relations	4

Section 2. Insurance Participants	5

Section 3. Covered Workers	6

Section 4. Formation and changes of the insurance relations	7

Section 5. Termination of the insurance Relations	9

Section 6. Non-mandatory participation of owners of SMBs	11

Part Ⅲ. Collection of the IACI	19

Section 1. Overview	19

Section 2. Determination and Exceptions to Insurance Contribution Rate	22

Section 3. Estimated Contribution	24

Section 4. Final Contribution	29

Section 5. Insurance Affairs Association(IAA)	32

Section 6. Penalties	34

Part Ⅳ. Benefits of the IACI	37

Section 1. Types and contents of IACI benefits	37

Section 2. Average Wage Adjustment Scheme	51

Section 3. Protection of the right to benefits entitlements	56

Section 4. Undue gains collection, legal liability, etc.	58

Section 5. Administrative Remedies	61

Part Ⅴ. Employee Rehabilitation & Welfare Programs	64

Section 1. Programs for rehabilitation of injured employees	64

Section 2. Worker Welfare Programs	75

Appendix A : Frequently Asked Questions on Application and Collection	79

Appendix B : Frequently Asked Questions on Benefits and Rehabilitation	85

Appendix C : Industrial Accident Prevention Program	90

Part I. Overview on the Industrial Accident Compensation Insurance

Overview on the IACI

Overview on the IACI

Section 1. Industrial Accident Compensation Insurance Program

The Industrial Accident Compensation Insurance (IACI) was introduced in 1964 for the first time in Korea to protect workers from rapidly increasing number of industrial accidents during the industrial development.

At first, Industrial accidents took place mainly at construction sites and the workplace using dangerous tools and machinery. Yet, as the society became modernized, sophisticated and driven by information, types of the accidents became widened to include new industrial diseases, overwork, and stresses, and their number dramatically increased.

Though prevention is the best policy to protect workers from industrial accidents, the IACI is important as well to protect and compensate for the workers who were injured or dead for the accidents and their families.

The IACI is the compulsory insurance program where the state ensures post-accidental livelihood of workers and their families. Under the IACI, the state imposes a certain level of contribution on employers to take responsibility for accidents compensation under the Labor Standards Act, and compensates on behalf of employers for accident victims out of resources funded through collection of insurance contribution.

		What is the IACI?
	1) The principle of 'liability without fault' is applied whereby employers will not be asked about his intention or faults regarding accidents at work. 2) In principle, resources of insurance business will be financed by contribution by employers. 3) The insurance benefits will be provided according to the fixed rate calculated based on the average wages, so it does not compensate for the entire damage caused by an accident. 4) Voluntary reporting and payment are the basic principles of the IACI. 5) Review and petition for re-deliberation on a case is conducted for the purpose of facilitating the appeal process related with accident compensation. 6) Workplace is the unit for management of the IACI, different from other social insurance programs.

Since 1964 when the IACI was first introduced to cover large-scale mining and manufacturing enterprises employing 500 regular workers and pay insurance benefits equivalent to the amount prescribed under the Labor Standards Act(LSA), the coverage of the IACI was expanded to include workers of the workplace employing one or more workers on July 1, 2000. In addition, Collection Law on Insurance Contribution of Employment and Industrial Accident Compensation Insurance was enacted and became effective as of January 1, 2005.

- In 1965, the electric & gas industry and transport & warehousing businesses were covered.

- In 1969, the construction, services, water sanitation facilities, and communications industries were covered.

- In 1989, the law was amended to expand coverage to all workplace and business applied by the LSA.

- In 1991, agriculture, forestry, fishery, hunting, wholesale and retail, real estate services, business assistance, personal and housekeeping services were included.

- On July 1, 1998, the financial and insurance industry were covered, and;

- On July 1, 2000, workplace employing one or more workers became insured by the IACI.

- On January 1, 2005, all the constructions by builders with construction licence as well as the business by corporations employing more than one worker and doing business with agriculture, forestry(except for logging), fishery, hunting industries became mandatory application category.

Chronological expansion in scope of application of the IACI

year	’64	’65	’66	’67	’68	’72	’73	’76~’81	’82~’91	’92	’96	’98	2000.7.1
the number of workers in workplace	500	200	150	100	50	30	16	5~16	5~10	5	5	5	1

1. From 1976 to 1991, it was gradually expanded according to industrial classification

2. In 1992, Financial & Insurance industry and other category including Educational Service, Health & Social welfare, and Research & Development industry were excepted from IACI

3. In 1996, Financial and Insurance industry was excepted from IACI

Section 2. The System to Manage the IACI

The highest authority to manage the IACI program is the Minister of Labor. The Korea Labor Welfare Corporation is in charge of actual administration of the IACI. Participants(employers, subcontractors) in the program must comply with their obligations such as payment of contribution. Beneficiaries(employees, the bereaved) have entitlement to insurance benefits. The figure below shows how these actors interact under the program.

Paying the benefits

Requesting benefits

Ensuring stability in livelihood

Providing labor

Paying the contribution

Actual undertaker

- Korea Labor Welfare Corporation

The Minister of Labor

in charge of deciding program policies

Participants

- Employers

- Subcontractors

Beneficiaries

- Injured workers

- Bereaved families

Part II. Application of the IACI

Application of the IACI

Application of the IACI

Section 1. Application of the insurance relations

1. Subject for the insurance Relations

Any business employing a worker must be subject to participation in the IACI. The IACI is applied to a business or workplace.

- “A business” is a commercial unit for constant social and economic activities conducted for the purpose of profit or non-profit.

- “Workplace” is a spatial concept meaning a place where people are employed and equipment exists to do business.

※ The principle of application of IACI : Several business which are undertaken in the same place would be regarded as one business, but those in the different places would be considered as separate business

2. Mandatory participation category

Mandatory participation category includes a business or workplace for which the insurance relations will be automatically formed under the IACI regardless of an intention of an owner of the business of the workplace, once the business or workplace starts its business and fulfills the requirements for application of the IACI. Any business or workplace, except 'exemption category', employing one or more workers will be part of the mandatory participation category. Therefore, if worker is injured after his/her business or workplace belonging to the 'Mandatory participation category' started operation or fulfilled the requirements for the IACI, he/she will be entitled to compensation under the IACI regardless of reporting by his/her employer of participation in the IACI.

	Exemption Category
1) An unincorporated business in the field of agriculture, forestry (except for logging), fishery, and hunting industries employing less than five regular workers 2) Housekeeping services 3) A construction project costing less than 20 million Won, a construction or renovation project of a house with a size of 330㎡ or less conducted by those who are neither a housing developer, a construction undertaker, an electric work undertaker, an information and telecommunications work undertaker, a fire facility worker nor a cultual asset repairman, respectively specified by the Housing Act, the Basic Act on the Construction Industry, the Information and Communications Industry Act, the Fire Act and the Cultural Properties Protection Act. 4) A business compensated for workers' injuries by the Public Officials' Pension Act or the Military Servicemen's Pension Act. 5) A business compensated for workers' injuries by the Seamen's Act or the Private School Teachers' Pension Act. 6) A business which is not included in the above ② and ⑤, employing workers for a short-term basis and having less than one regular worker (amended on June 27, 2000).

※ The total cost of construction = The amount in contract + The cost of construction material separately provided by owner(material offered by government or a private person) - VAT

3. Non-mandatory participation category

A business belonging the non-mandatory participation category is a business whose application is not mandatory, but up to an owner of a business.

- An owner of a business included in the non-mandatory participation category must obtain an approval from the Korean Labor Welfare Corporation (KLWC) to take out insurance policy for his/her business.

Section 2. Insurance Participants

1. Mandatory participation category

The insured of the IACI will be owners of businesses.

An owner of a business will be a judicial person or a natural person, representing his/her business.

An owner of the 'mandatory participation category' will automatically be insured regardless his/her intention, be given with obligation to report and pay the contribution. An owner of a business, if his/her business is a big scale or covers a wide area, making him/her difficult to conduct obligations to report or register, he/she may appoint his proxy to conduct insurance-related duties.

2. Non-mandatory participation category

The insured of the IACI will be owners of businesses, as is the case in the mandatory participation category. An owner of a business may participate in the IACI upon approval by the KLWC.

3. The contracting business at multiple levels

If subcontracting is made at multiple levels under the Civil Laws, the main contractor must take out the IACI on behalf of other subcontractors, in principle.

- If a contractor  hands over his/her duties to pay contribution in a written contract to a subcontractor, the contractor has to apply for it to the KLWC to receive approval. Upon approval, the subcontractor may be recognized as the insured.

Section 3. Covered Workers

1. The definition of a worker

Definitions of a worker vary for the purpose of each act such as the LSA, the Trade Unions and Labor Relations Adjustment Act, and the Basic Act on Vocational Training.

Yet, under the IACI, the term 'a worker' means 'a worker' defined by the LSA.

- According to the LSA, a worker means a person engaged in whatever occupation offering work to a business or workplace for the purpose of earning wages.

2. Calculation on the number of regular workers

A term 'a business employing one or more workers' means a business whose average number of workers is one or more during 30-day period from the first day when the number of workers the business employs reaches one since starting operation to the 30th day in operation. The average number is gained through dividing the number of workers the business has employed during the above-mentioned 30 day period by 30.

※ In cases where the number of days in operation from the first day when the number of workers the business employs reaches one to the day the cause of the calculation was occurred is less than 30, the average number of workers is calculated through dividing a total number of workers employed from the first operating day to the end of operation by the number of days in operation.

In this context, a worker includes any worker in any type of employment, be it a permanent or daily employment.

	Special Clauses of Application of the IACI
1) Trainees at workplace : Out of the students or trainees who are under the on-the-job training at the workplace, those belonging to the category determined by Minister of Labor have been regarded as workers of the workplace and benefited from the IACI since Jan.1, 1998. 2) Employees dispatched to other countries : Employes may apply to the KLWC for his employee who is dispatched to the place outside of the Republic of Korea. If the application is approved by the KLWC, the worker will be covered by the IACI. 3) The insurance relations of foreign industrial trainees : The insurance relations were recognized for industrial trainees recommended by the Korea Federation of Small Business since 1994. Industrial trainees recommended by the Construction Association of Korea have been also benefited from the IACI since Feb.23, 1998. 4) Owners of small and medium-sized businesses, or SMBs (see Section 6 of the Part II) : Owners of the workplace having less than 50 workers may participate in the IACI for themselves or their families bereaved in cases of death, under the approval of the KLWC. Now the enactment of the law is under way to provide optional participation in the IACI of those using a car but not employing a worker for the tourist trade or freight transport businesses.

Section 4. Formation and changes of the insurance relations

1. Meaning of the formation of the insurance relations

The formation of the insurance relations under the IACI means that the relations for rights and obligations were created under the IACI.

Through the formation of the insurance relations, an owner of a business will have obligation to report and pay the insurance contribution, while undertakers of the insurance will have obligations to pay the insurance benefits and workers will have right for benefits and obligations to request the insurance benefits in cases of injuries.

2. Date when the insurance relations are formed and Documents to submit

A. Mandatory participation category

ㅇ Establishment date : The day when a business belonging to the mandatory                participation category started operations or a business exceeded a certain level

ㅇ Necessary Documents to be submitted : The reporting paper for establishing the IACI

ㅇ Other Documents to be submitted

- Construction projects and logging businesses must forward a copy of a project contract, a detailed account of project costs, and licensing paper.

- Other businesses, except for construction projects and logging businesses, have to submit a business registration certificate, a wage ledger, and a description of products the participant is making.

ㅇ Submission deadline: Within 14 days from the day the insurance relations were            formed (When a company closes its business within 14 days from the day the             insurance relations were formed, the deadline will be the day before it closes).

B. Non-mandatory participation category

ㅇ Establishment date : The day after an owner of a business registered an application        for participation in the IACI.

※ If a subcontractor is approved by the KLWC as Insurance Participants, the date when a subcontractor starts to work for the first time will be the establishment date.

ㅇ Necessary Documents to be submitted : The application paper for establishing the          IACI

ㅇ Other Documents to be submitted : the same as the mandatory participation category

C. Changes from the mandatory participation into non-mandatory one

If a business belonging to the mandatory participation category is turned into one of the non-mandatory category because of the change in the number of employees, its insurance relations will be changed into the non-mandatory participation category on the day the business is changed into the non-mandatory category.

3. A blanket application to the same businesses of one owner

A. Intention

The provision is to improve conveniences for owners of businesses and protection for workers by regarding two or more businesses of an owner as one business in applying the insurance relations. If the owner meets the following requirements, a blanket application of his/her businesses is mandatory.

B. Requirements

① Owner of different businesses will be identical.

② Each business will have a fixed term.

③ The businesses which are conducted by a construction project undertaker, a housing       developer, an electric work undertaker, an information and telecommunications work        undertaker, a fire facility worker and a cultual asset repairman, according to the           Basic Act on the Construction Industry, the Housing Act, the Information and             Communications Industry Act, the Fire Act and the Cultural Properties Protection          Act.

※ If an owner belonging to non-mandatory participation category wants to have the blanket application for his businesses(But, the type of business classified by the Minister of Labor should be the same and owner should be identical), the owner may have the blanket application upon approval from the KLWC

C. Maintaining the blanket application

An owner who had the blanket application in the previous year will continue to have it on this insuring year, unless the his/her insurance relations are terminated.

D. Termination of the blanket application

Once a participant in the IACI who has received the blanket application wants to terminate the insurance relations, he/she has to present an application for termination of the blanket application seven days before the commencement of the next insuring year. If the application is filed and approved during the insuring year, the blanket application will be terminated from the next insuring year.

E. Reporting on the opening of a business

An owner whose business is under the blanket application must fill in the application to report the opening of each business and submit it within 14 days after starting to work to the KLWC regional headquarter or branch office with jurisdiction over his construction.

4. Changes of the insurance relations

An owner must report any changes of the following items to the KLWC without any delay.

- The name and address of an owner (in cases of a legal person, the name and address of a representative)

- The name and location of a business, Type of a business

- Business Registration Number (in cases of a legal person, including the registration number of the legal person)

- Period of a business of a construction or logging project with the fixed term of a business

Documents to submit : a reporting paper on the changes of the insurance relations

※ When a location of a business is changed, it must be reported to the competent regional KLWC office of the former location.

Section 5. Termination of the Insurance Relations

1. Reasons for the termination

A. Discontinuation or closing of a business

In cases where a business is actually discontinued or closed, the insurance relations will be terminated. Discontinuation or closing of a business is not related with the completion by a legal person of registration on dissolution of a business, report of the cessation of a business, or report of the termination of the insurance relations.

B. Termination by authority

The KLWC will terminate the Insurance Relations by authority, if it deems a business impossible to maintain the Insurance Relations.

C. Termination by application

An owner of a business belonging to the non-mandatory category and those changed from the mandatory to the non-mandatory category may apply for the termination of the insurance contract at his or her will after the present insuring year ends. Yet, employer could apply for the termination of the Insurance Relation, after the insuring year ends.

	When wanting to terminate the insurance relation in non-mandatory categorized workplace
◦ If a employer belonging to non-mandatory voluntarily takes out the IACI on July 10 2005, the employer could apply for the termination of the insurance relation after January 1, 2006.

2. Termination date and documents to be submitted

A. In cases of discontinuation or closing of a business

Termination date : the day after a business is actually discontinued or closed.

Documents to be submitted : a reporting paper on termination of the insurance relations

Submission deadline : within 14 days after a business is actually discontinued or closed.

B. In cases of termination by authority

Termination date : the day after decision on termination by authority based on the assessment that continuation of the insurance relations is impossible, is notified.

C. In cases of termination by application

Termination date : the day after the KLWC approved termination of the insurance relations.

Documents to be submitted : an application paper on termination

3. Effects of termination of the insurance relations

Obligations to pay contribution and provide benefits to workers will be nullified after the date of termination.

- Yet, the obligation to pay contribution in arrears before termination will not cease to exist.

- Requests for insurance benefits for the injuries which took place before termination of the insurance relations are possible.

4. Extinctive prescription

A. Meaning

Extinctive prescription means if the rights to charge certain fees, receive refunds or insurance benefits are not exercised for three years, the excercise of the rights will be refused for the expiration of the period of prescription.

B. Starting point of reckoning

ㅇ Regarding the Final Contribution, the first day of the next insuring year will be the starting point for reckoning. In cases where the insurance relations are terminated in the middle of year, the next day of the termination day will be the starting point of reckoning.

ㅇ Regarding rights to request insurance benefits, the day when rights can be exercised will be the starting point of reckoning.

- Concerning the Temporary Disability Benefits and the Medical Care Benefits, rights can be exercised from the day after the compensable accident occurred

- Concerning the Disability Benefits, rights can be exercised from the day after medical care due to injuries at work is completed.

C. Suspension of the extinctive prescription

Extinction of prescription is suspended during the period when a right holder claims for benefits, presses for payment, notifies on payment, or applies for the process to obtain delivery of contribution. After the period lapses, the extinctive prescription will newly start.

Section 6. Non-mandatory participation of owners of SMBs

1. Purpose of the provision

The provision is intended to provide chances to participate in the IACI to owners of Small and Medium-sized Businesses, because many of them are de-facto workers.

It has a purpose of appropriately compensating owners of SMBs who had industrial accidents and promoting participation of workplace employing four or less workers in the IACI.

Yet, the self-employed are not subject to this provision, different from those in Japan.

Owners who run the business of carrying passengers and goods in terms of cars, without employing workers, could participate in the IACI as of January, 1 2005.

2. Eligibility for participation

ㅇ According to the Article 105-4(1) of the Industrial Accident Compensation Insurance Act (IACIA), an employer of SMBs defined by the Presidential Decree as SMB may insure himself/herself or his surviving family as beneficiaries upon approval of the KLWC. The insured owner of SMBs will be regarded as a worker in applying this provision, despite the provisions of the Article 4(2) of the IACIA.

ㅇ Employers of less than 50 workers, based on The Article 113-3(1) of the Enforcement Decree of the IACIA, are eligible to take out IACI

- The Article 133-3(2) of the Enforcement Decree of the IACIA states that if the insured owner of less than 50 workers employs 50 or more workers during an insuring year, he/she will be still regarded as the insured owner of a business employing less than 50 workers until the end of the insuring year.

ㅇ According to the Article 113-3(1,2) of the Enforcement Decree of the IACIA, owners who run the business of carrying passengers and goods in terms of cars, without employing workers, could participate in the IACI.

3. Application and approval for participation

If an eligible owner of a SMB wants to participate in the IACI for himself/herself, he/she has to forward to the KLWC the 'Application Paper for Owners of SMBs to Participate in the IACI' specifying the number of workers he/she employs, a type of business, and matters regarding wages.

- The applicant must fill up the column in the application form titled 'details on work of the applicant' with specifications on a type of business in relation to IACI contribution, the work and working hours the applicant is engaged in for the insuring year. The details will be the basis to decide whether an injury will be an industrial accident or not.

Within 7 days upon receiving the 'Application Paper for Owners of SMBs to Participate in the IACI', the KLWC will notify the applicant of the decision on approval. When an applicant has his/her health examined before the decision, the KLWC will notify the applicant of the decision on approval within 7 days upon receiving the results of the examination.

- If a owner of two or more SMBs received an approval from the KLWC to be insured and was injured for an accident at other business where he/she was not insured, he/she will not be entitled to insurance benefits. Therefore, in order to be insured against all accidents of any business he/she owns, he/she has to receive the separate approval on participation in all businesses he/she owns.

- KLWC will check if employees in his SMBs are insured or not, before KLWC approves the application of the IACI for owner in SMBs. The reason is that the owner of SMBs can be insured by the IACI on the premise that their workers are insured first, regardless of the Mandatory or Non-mandatory category. Meanwhile, owner of SMBs may apply for participation in the IACI for himself at the same time when he applies for participation of their businesses in the IACI. for his employees

Health examination

- Applicants subject to health examination are as follows.

․Those involved in dust work

․Those involved in the work which set up the vibration on their bodies

․Those involved in the work dealing with lead

․Those involved in the work dealing with organic solvents

※ If a owner of a business newly took office and became subject to health examination, he/she has to present the separate application paper including the health examination certificate to the KLWC.

- Business owners falling under the above-mentioned list of applicants subject to health examination will have their health examined according to the Article 43 of the Industrial Safety and Health Act (ISHA) and the Article 98 of the Enforcement Regulations of the ISHA.

- Medical institutions conducting health examination for applicants subject to health examination are the medical institutions having contracts for health examination with the KLWC out of those which meet the personnel, equipment, and facilities standards of the List 14 of the Article 102 of the Enforcement Regulations of the ISHA and are designated by heads of regional labor offices as 'Medical Institutions for Health Examination.'

- Following decisions will be made after health examination

․If it is decided based on the results that an applicant is contracted with a disease to the extent where he/she will have difficulties in working to need treatment, changes of workplace and working hour reduction, his/her participation in the IACI will not be approved.

․If it is decided based on the results that an applicant has the history of a contraction with a disease to the extent where the disease may recur or grow worse, his/her participation in the IACI will not be approved.

※ If an applicant with the history of being contracted with Pneumoconosis is involved in the dust work, his/her participation in the IACI for the dust work will not be approved. Yet, his/her participation in the IACI for other work than the dust work such as business trip or events will be approved.

- The KLWC will pay for health examination of the applicants.

4. The insurance relations of a owner of a SMB

If a owner of a SMB applied for participation in the IACI and received the approval from the KLWC, the insurance relations will be effective from the day after the application paper is received (Article 105-4(6) and Article 10-2 of the IACIA)

If the insured owner of a SMB does not employ a worker any more during an insured year, the insurance relations of the owner of a SMB will be effective within one year after he/she does not employ a worker any more (Article 105-4(6) and Article 8(2)).

If an information a owner of a SMB reported to meet the requirements for participation in the IACI changed after the participation, the insurance relations will change when a reporting paper on the changes is received.

- Changes in information subject to report： the type of business, personal information and duties at work of the insured owner of the SMB

- If an insured owner of a SMB closed the existing business and opened a new business, he/she has to newly apply for his/her participation in the IACI.

5. Termination of the insurance relations and Termination date

A. Termination of the insurance relations by application or by authority

An insured owner of a SMB wants to terminate the insurance relations, he/she has to obtain approval from the KLWC. And if approved, the insurance relations will be terminated only when the insured year ends (Article 105-4(6) and Article 7(3)).

If the KLWC recognized that the insurance relations of an insured owner of SMB cannot be sustained, the KLWC may extinguish the insurance relations (Article 105-4(6) and Article 7(4)).

B. Date for extinguishment of the insurance relations

The insurance relations of an insured owner of a SMB will be extinguished on the day after his/her business is discontinued or closed.

The insurance relations of an insured owner of a SMB stated in the Article 8(2) of the IACIA will be extinguished on the next day of the one year from the first day when he/she did not employ a worker.

The insurance relations of an insured owner of a SMB stated in accordance with the Article 7(3) of the IACIA will be extinguished on the day after the application for termination is approved by the KLWC.

The insurance relations of an insured owner of a SMB stated in accordance with the Article 7(4) of the IACIA will be extinguished on the day after the KLWC notified the decision on termination of the insurance relations.

6. Collection of contribution

The wage amount and the average wage of an insured owner of a SMB stated by Labor Minister will be the basis to calculate contribution and benefits of the IACI of the  owner of a SMB. The contribution rate of a business an insured owner owns  will become the contribution rate the insured owner has to pay (Article 105-4(3)). When Individual Contribution Rate applies to his workplace, it will apply to insurance contribution rate of the owner, as well.

The insurance contribution will be calculated as follows ; Insurance Contribution = the monthly wage amount × the contribution rate × the total number of months of an insured year.

- 'The monthly wage amount' will be decided by the Article 105-4(3) of the IACIA.

- 'The total number of months of an insured year', in case where the insurance relations of an insured owner of a SMB were formed during a year, will be the number of months from the day when insurance relations are formed to the last day when the insured year ends.

- The insurance contribution for the months during which the day when the insurance relations are formed or terminated comes will be calculated in daily terms.

The wage amount and the average wage to calculate the insurance contribution (application period : from Jan.1, 2005 to Dec. 31, 2005)

Grade		1	2	3	4	5	6	7
Monthly wage (KRW)	‘04	1,110,600	1,650,000	2,190,000	2,760,000	3,300,000	3,840,000	4,374,000
	‘05	1,256,070	1,800,000	2,340,000	2,880,000	3,420,000	3,990,000	4,537,470
Daily average wage (KRW)	‘04	37,020	55,000	73,000	92,000	110,000	128,000	145,800
	‘05	41,869	60,000	78,000	96,000	114,000	133,000	151,249

A owner of a SMB who received the approval for the participation in the IACI has to report the insurance contribution and pay it by March 31(When the IACI is established in the middle of year, he should do it within 70 days from the establishment date). The contribution should be paid in lump sum, not in installments. The insured owner of a SMB will not be subject to 5% deduction.

- When the insured owner of a SMB continues the insurance relations on the second year following the first insured year, he/she will submit only the contribution reporting document.

If the insurance contribution rate are increased or decreased during an insured year, the additional payment or refund has to be made.

The measures to collect overdue contribution will not be taken to an insured owner of a SMB, since he/she can not get the benefits from the IACI while his/her contribution is overdue. If the continuation of the insurance relations is deemed to be difficult, the KLWC will extinguish by authority the insurance relations in accordance with the Article 7(4) of the IACIA after urging for payment.

There are very few cases of additional payment or refund of contribution for the insurance of owners of SMBs because they can pay contribution based on the wage category they chose. Still, if the insurance contribution of a category of businesses are lowered during an insured year to affect a business of a owner of a SMB, the lowered amount will be returned to the owner at the end of the insured year upon request. If a business of a owner of a SMB is discontinued or closed during an insured year, the return will also be made. In the opposite case where a owner of a SMB changed his/her business type, the contribution will be increased and he/she has to pay the additional contribution.

7. Insurance benefits for an insured owner of a SMB

A. Scope of work-related accidents

The scope of work-related accidents for which insurance benefits are paid to a owner of a SMB will be determined by the Ordinance of the Ministry of Labor (Article 105-4(2)).

Criteria to recognize work-related accidents

- A work-related accident is the accident which took place for the work or an act directly related with work which is pursuant to the Article 34 of the Enforcement Rules of the IACIA, at the workplace during the working hours specified in the application paper for insurance participation. An act to perform the duty purely as a owner of a SMB will be exempted from the scope of an act of work which caused the work-related accidents, for the purpose of the law, though there is no specific ground for the exemption because a owner of a SMB is regarded as an employee in participating himself/herself in the IACI.

※ The recognition on an accident to be related with work will not be affected by whether the owner of a SMB concerned was with an employee, if the owner of a SMB concerned had an accident while performing the work during the working hours approved by the KLWC to be subject to compensation.

※ Attending a shareholders' meeting and a meeting of an association of owners, and events provided for clients such as banquets, lobbying activities, and golf games will be exempted from the act of work.

※ An act directly related with work will be decided in accordance with the criteria applied to 'a worker.'

- In cases where a owner of a SMB had an accident while performing work subject to compensation under the IACI out of working hours, recognition of the accident to be work-related will be decided in accordance with the criteria applied to 'a worker.'

※ The term, 'out of working hours' means the overtime, holiday, and night works officially recognized or approved. Thus, the hours worked for the personal needs of a worker will not be included in the term 'out of working hours.'

- An accident a owner of a SMB had during recess will be recognized to be related with work, only when the accident took place for the act performed with a worker.

- An act of preparation before work or that of arrangement after work performed by a owner of a SMB with a worker or by himself/herself may be recognized as an 'act of work' if it is performed immediately before or after the work. Accordingly, if a owner of a SMB performed the act of preparation or arrangement, following recess and dinner after work, the act will not be regarded as the 'act of work,'

- The business trip out of direct needs for the operation of a business will constitute the act of work. However, the business trip purely as a owner of a SMB will be exempted from the act of work, though there is no specific mention on the exemption. A willful act, a personal act motivated by strong intention of a owner of a SMB, and act of crime during the business trip will not be approved by the act of work.

※ The term 'the business trip purely as a owner of a SMB' above mentioned means the business trip for the purpose of attending meetings of associations of owners or serving clients.

※ The decision on whether an act is a willful act or a personal act motivated by strong intention of a owner of a SMB will be made on the basis of the criteria used for workers such as the diversion from the courses of the business trip.

- Sports games, picnic, or mountain-climbing necessary to operate a certain SMB will constitute an 'act of work.'

- Other cases specified in the Enforcement Regulations of the IACIA to be recognized as work-related will include accidents except an act of suicide (Article 32), work-related diseases (Article 33), accidents caused by an act of the third party (Article 38(1)(2)), an accident during medical treatment (Article 38), and death for the work-related diseases (Article 39). Yet, accidents stated in the Article 35 of the Enforcement Regulations of the IACIA which took place out of working hours will not be recognized as work-related.

B. Insurance benefits for owners of SMBs

Payment of insurance benefits

- The types of insurance benefits and methods of payment provided to owners of SMBs will not be different from those applied to workers.

- The amount of benefits will be predetermined on the basis of the average wage of an insured owner of a SMB he/she chose at the time of participation in the IACI. The maximum and the minimum amount is set as a ceiling on the choice.

※ A owner of a SMB cannot change the average wage during an insured year which is the basis for calculation of the benefits once he/she reports the insurance contribution for the insured year. Yet, he/she must request for the change in the following year when reporting and paying the contribution, and receive an approval from the KLWC.

The work-related accidents which took place during the period when contribution was in arrears will not be compensated with benefits.

※ In principle, employer should pay the whole insurance contributions before the time limit of payment. Therefore it should be borne in mind that insurance benefits won't be granted to the insured owner in case the industrial accident takes place during delinquency in payment, even though part of the insurance contribution is paid. As urging SMBs to pay the insurance contribution, KLWC must notify them of such fact that KLWC could terminate the insurance relation by authority as a result of delinquency in payment(It is considered as notice). However, such presses for payment in this case is not a precondition for making an attachment for unpaid taxes in accordance with the Article 7(4) of the IACI

※  If an insured owner of a SMB who paid contribution for an insured year and had a work-related accident, he/she will continue to receive the same level of Medical Care Benefits in the following year with the previous year. However, if an insured owner of a SMB paid contribution every year before he/she failed to pay it in a certain year when he/she had accident, he/she will not be provided with the insurance benefits.

※ If an insured owner of a SMB has been in medical care for the long term for the work-related accident and other owner took office for the company, the new owner has to submit the application paper and pay the contribution to be insured.

※ If an insured owner of a SMB who chose a certain grade as the basis for contribution and paid the contribution for the last insured year had a work-related accident this year before reporting and paying the contribution for this year, he/she will be compensated with the last year's level of benefits. Yet, the actual amount of provided benefits may be different from the amount announced by the KLWC for the last year's benefits because the amount of benefits announced by the KLWC may change every year.

Part Ⅲ. Collection of the IACI

Collection of the IACI

Collection of the IACI

Section 1. Overview

1. Significance of contribution

contribution is the amount imposed on the insured(employers) so that the insurer(employers) can afford expenses for insurance business.

2. Principle : The employer pays the whole amount of contribution

3. Calculation period

Business excepting time-limited one : For every insurance year from Jan 1 to Dec 31

Business which established insurance relations in the middle of the year : From the starting date of insurance relation to Dec 31

Business which ceased to exist in the middle of the year : From the insurance year Jan 1 to the business shut-down date

Business that started and shut-down in the middle of the year : From the starting date of insurance relations to the business close-down date

4. Basis wage for calculation of contribution

A. Significance of the total wages

The total wages, which is used as a calculation basis for contribution refers to the total amount that the employer paid or decided to pay during the insurance year(construction period) stipulated in the Article 18 of the Labor Standards Act(LSA).

The total wages described in the article 18 of the LSA refers to wages, salary, and any other payment to a worker from an employer as remuneration for work and includes wages paid in kind as well.

B. Scope of Total Wages

The examples of wages written below are not everything included in the total wages, but are leading elements either included or not in the wage. Even an element in question is omitted here, the nature of total wages described in the article 18 of LSA should be considered to determine whether the element belongs to the total wages or not.

Elements that constitute the total wages

a. Elements that are paid in currency

1) Base wage

2) Yearly․monthly leave, paid leave

3) Executive allowance

4) Allowance for special jobs, dangerous jobs, technical jobs

5) Overtime, evening and holiday special allowance

6) Day or Night duty allowance

7) Incentive and perfect-attendance allowance

8) Items that are recognized as paid consistently and regularly through collective agreement or employment rules and regulations under employment contract terms are: a) bonus, b) transportation costs, c) housing costs, d) education costs, e) meal-related expenses, f) family compensation, g) energy costs, h) area costs, such as cold area or remote area costs, i) inflation adjustments, j) any other adjustments.

b. Payment in kind : payment in kind made according to the law, collective agreement, employment rules and conditions of working contract (example : meal service, commutation ticket)

Elements that do not constitute the total wages

a. Elements that are not acknowledged as wage in terms of the nature

1) Payment in currency  : a)payment in celebration of marriage b)payment in condolence c)payment in consolation of disaster d)compensation for temporary disability e)spendings that can be expensed (e.g. : equipment loss, supplies allowance, clothing allowance for work, travelling expense)

2) Payment in kind

a) payment in kind for which money is collected from the worker

b) payment in kind essential for work (e.g. : working clothes, working shoes, etc)

c) Payment in kind in the form of welfare facilities (e.g.: housing equipment, lightings, water, medical service, health food, etc)

b. Other elements that do not constitute the total wages

1) Retirement benefit (Regardless of the collective agreement, employment rules)

5. Base wage system

A. Significance and Cause

□ Significance

When it is difficult to calculate or confirm wage due to business shut-down or bankruptcy, or any reasons due to presidential decree, the amount of wage announced by the Labor Minister shall be used to process insurance administrations, thereby reducing employer's burden and enhancing efficiency of insurance administrations.

□ When to use the base wage

① when it is difficult to calculate or confirm wages due to business shut-down, bankruptcy, or transfer

② when there is no information related to wage or if there is, when the information is not clear

③ when it is difficult to find out the address of workplace because of transfer

	How to calculate the number of workers at ordinary times applicable to the Announced Base Wage
◦ The total number of the insured workers on the last date of every month in previous year should be divided by the number of months during which business was conducted in previous year. In case of business starting to be undertaken in the middle of year, the number of workers on the establishment date of Insurance relation is the number of workers at ordinary times.

B. The Announced Base Wage

Year		Hourly salary	Daily salary	Monthly salary
All industries	2004.1.1~12.31	5,760 Won	46,080 Won	1,301,760 Won
	2003.1.1~12.31	5,470 Won	43,760 Won	1,236,220 Won
	2002.1.1~12.31	5,200 Won	41,600 Won	1,175,200 Won
	2001.1.1~12.31	3,730 Won	29,840 Won	843,000 Won

※ Daily salary applies to IACI and results from "Hourly salary × 8 hours"

The Announced Base Wage in 2005

Class	Industrial Classification	Monthly salary(Won)	Hourly salary(Won)
1	Electricity, Gas and Water supply industry(E)	2,765,000	12,230
2	Finance and Insurance Industry(K)	2,316,000	10,250
3	Mining(C), Telecommunication(J)	1,591,000	7,040
4	Transport(I), Manufacture(D), Personal Service(R), Retail and Whole Sale(G), Business Service(M)	1,458,000	6,450
5	Agriculture and Forestry(A), Fishery(B), Construction(F), Public Administration and Defense(F), Housekeeping Services(S), International & Foreign Association(T)	1,379,000	6,100
6	Recreation, Culture and Sports Service(Q), Lodging and Restaurant(H)	1,220,000	5,400
7	Real Property and Leasing service(L), Health and Social Welfare Industry(P)	1,117,000	4,940
8	Educational Service(O)	994,000	4,400

6. Calculation of wages depending on the labor rate

A. Significance and standard for application

If it is too difficult to determine the presumed total wage or total wage in the case of report and payment of Estimated Contribution and Final Contribution, the Minister of Labor shall determine the figures in accordance with the labor rate that it publicly announced.

B. Subject of Application

The above provision is applicable when it is impossible to confirm the actual wages paid, for companies in construction and logging industry ; if specific wage amounts are determinable from the construction cost details, then the provision shall not be applicable.

C. The announced labor rate

Year	Main construction projects	Subcontract projects	Logging projects (per 1cubic meter)
2005	28% of total construction costs	33% of subcontract amounts	12,274 Won
2004	27% of total construction costs	34% of subcontract amounts	12,454 Won
2003	29% of total construction costs	34% of subcontract amounts	12,283 Won
2002	28% of total construction costs	36% of subcontract amounts	13,357 Won

Section 2. Determination and Exceptions to Insurance Contribution Rate

1. Industrial Accident Contribution Rate

Industrial Accident Contribution Rate are directly related to employers' insurance liabilities. For the purposes of fairness in payment of contribution,  the contribution rate is decided, based on the rate of the total paid benefits over the total wages for the past 3 year period from every Sep. 30th and depended on  industries categorized by risk of accidents, and announced at the end of every Dec.

※ For year 2005, the announced insurance rate for 61 industries ranges from 4/1000 to 489/1000, with average at 16.2/1000.

In applying contribution rate,

- Single contribution rate is applied for one business entity.

- In case there are 2 or more different types of businesses in an entity, the following criteria (in the order of importance from the top to the bottom) will be applied in determining the major business line to apply the single contribution rate

① where more employees are present

② if they have identical number of employees, whichever business has higher total wage

③ assuming above methods are not effective in determining the main line of business, whichever business generates larger amount of sales

2. Exceptions to Determining contribution rate (Merits Rate)

A. Significance

For the purpose of strengthening accident prevention activities of business owners and improving fairness in application of contribution rate vis-a-vis employers delinquent in doing the accident prevention activities, the increase or the decrease of the contribution rate within 50/100 range may be applied in the following year to the businesses whose ratio of the contribution paid to the benefits received over the past 3 years(balance rate) exceeds 85/100 or is less than 75/100

B. Application Criteria

The above applies to mining, manufacturing, electricity & gas & water, transportation & warehouse & telecommunications, finance & insurance, forestry (except construction and logging), fishing, and agricultural companies with 30 employees or more, or 7,500 total man-days or more (for seasonal business)    ※ From 2005, Merits Rate has applied to Other Extra Category which means all business sectors with more employees could apply to Merits Rates

Construction companies under the blanket application, whose total costs of the construction projects taken 2 years before the current insurance year amounted to larger than 10 billion Won

Those companies, as of September 30, that exceeded 3 years since the establishment of insurance relations.

- Provided that, if the business of the company is changed during the previous 3 years as of September 30 of the current year, then Merits Rate shall not apply (excluding those that do not have changes in main business lines).

C. Calculation Formula

Merits Rate = Standard Rate for Subject Business Lines ± (Standard Rate for Subject Business Lines ×

increase and decrease based on the balance rate)

※ Balance rate = (Total insurance benefits over last 3 years / Total contribution payments over the last 3 years) × 100

※ The benefits paid as a result of the actions by the third party shall be excluded from July 1. 2000; however, those payments that do not recognized as resulting from third party actions by the court shall be added to the total payment calculation

D. Determination Dates

Merits Rate are determined within 10 days after standard rate is published. If the date to publish standard rate to the first day of the following insuring year is less than 10 days,  Merits Rate shall be determined the day before the start of the following insuring year.

Section 3. Estimated Contribution

1. Significance

Estimated Contribution means an amount of annual contribution that is determined by multiplying total estimated wages of all employees by the contribution rate on a yearly basis. (for the year that a new insurance relationship is established, the period from the start date to the end of year shall be used)

2. Determination of Estimated Contribution

A. Principles underlying the determination

The insured(employers) shall estimate the total wages to be paid to employees and multiply it by the appropriate contribution rate to determine the Estimated Contribution.

Estimated Contribution = Subject year‘s presumed total wages × contribution rate

- Yet, if the presumed amount is between 70/100 and 130/100 of the previous year’s actual total wages, the current years total wages shall be used.

	For example : How to calculate Estimated Contribution
◦ How much is the Estimated Contribution in 2005, when the total wages in 2004 were 100 million and the total wages in 2005 are expected to be 120million ? - The total wages in 2005 are expected to be the rage from 70 % to 130 % of wages in 2004, which is exactly 120 % of wages in 2004. - Therefore, Estimated Contribution in 2005 = 100 million which were total wages in 2004 × contribution rate

B. Determination of contribution based on labor rate (if it is too difficult to estimate total wages in the construction)

If it is too difficult to estimate total wages, the labor rate published by the Minister of Labor shall be used to determine the total wages

Estimated Contribution = Total Construction Amount × Labor Rate × contribution rate

3. Reporting and Payment of Estimated Contribution

Employers should fill in the insurance contribution form and submit it to the KLWC by March 31 every year(When Insurance Relations are established in the middle of the year, employers should do it within 70 days of the establishment date).

- For the contribution amounts the business owners shall pay voluntarily through Bank of Korea, the agency that take the money into the Treasury (Commercial banks), or at the post office

However, if the terminable businesses such as a construction project ends within 70 days from establishment of insurance relations, the owners of those businesses shall report and pay the contribution by the day before the end of their businesses.

Employers are obligated to pay the full amount of insurance contribution by March 31 every year(When insurance relations are established in the middle of the year, employers should pay for it within 70 days of the establishment date)

-	However, those businesses that establish insurance relations prior to the end of June can request installments scheme.(That request should be made at the reporting of Estimated Contribution)

- But those who paid in lump sum payable in installment schemes within the statutory deadline (within 70 days from the first day of the insured year) shall enjoy 5% deduction.

※ In principle, employers are expected to report and pay Estimated Contribution voluntarily according to the prepayment system.

Payment date for installments
Group	Subject Period	Payment deadline
1	Jan. 1 ～ Mar.31	3.31
2	April. 1 ~ June.30	5.15
3	July. 1 ~ Sep.30	8.15
4	Oct.1 ～ Dec.31	11.15

※ The principle of installments in case of workplace where new insurance relation is  formed in the middle of the year

․Installments are in principle paid 4 times a year ; however, for the cases that insurance relations start in the middle of the year, the installments times shall be adjusted to 2 or 3 times a year as appropriate

․In cases where new insurance relations start after June, no installments scheme shall be allowed, thus the business owners are expected to pay the full contribution amount in lump sum within 70 days from establishment of insurance relations.

4. Adjustment to reduce Estimated Contribution

A. Significance

This is the policy to reduce the financial burden on employer whose business was reduced in scale during the year by means of decreasing Estimated Contribution before accurate calculation of Final Contribution.

B. Conditions for decreasing Estimated Contribution

When business is reduced in scale

When the deceased Estimated Contribution should exceed 30/100

When employer should apply for the adjustment to reduce Estimated Contribution

C. The procedure

If a cause for decreasing the estimated amount occurs, application form to decrease Estimated Contribution shall be filled out and submitted to the KLWC. If accepted, a notice describing decreasing Estimated Contribution shall be sent.

Fact proof and wage ledger are needed for supporting reasons for the application for the adjustment to decrease contribution or calculation of decreased contribution. If Estimated Contribution has been fully paid, appropriation and return of the excess shall take place. For installments, evenly decreased contribution shall be paid.

5. Reassessment System of Estimated Contribution(New)

A. Significance

When employers reported Estimated Contribution within a definite period of time by law but its amount were overestimated, employers' rights and interests could be protected by Reassessment System which helps them to request reassessment of Estimated Contribution.

B. Conditions of Reassessment

◦ Estimated Contribution should be reported within a definite period of time by law

◦ Estimated Contribution which was previously reported should exceed Estimated Contribution to be reported

◦ Reassessment should be requested within one year after a definite period of time by law for reporting Estimated Contribution

C. Procedure of requesting reassessment

◦ When employer wants to reassess Estimated Contribution which was already reported and paid, they have only to fill in the application for reassessment of Estimated Contribution(or Final Contribution) and submit it to KLWC. Then, within two month, KLWC must inform employer of the result as to whether or not Reassessment is accepted.

◦ When employer asks for Reassessment of insurance contribution, he should explain the cause of Reassessment and show an account book of employees' wage. If employer pays the whole Estimated Contribution, the difference in amount which was resulted from Reassessment will be filled up to non-paid contribution or will be refunded. If employer pays Estimated Contribution in installment, unpaid Contribution will be reduced in balance as much as unnecessary Contribution.

6. Special Clauses of Collection for employers with less than 5 employees

A. Significance

Special Clauses of Collection is what KLWC imposes Estimated Contribution on employers who employ less than 5 workers in terms of Base Wage and notifies employers of such fact. It was introduced for the purpose of employers' convenience in payment as well as efficiency of insurance's management.

B. Conditions

◦ Business with less than 5 workers at ordinary time

	Exception to Special Clauses of Collection
◦ Construction and Logging Industry ◦ When employer starts business in the middle of year and misses the legal deadline of submitting an application for taking out IACI ◦ When employer doesn't want to be benefited from Special Clauses of Collection and submits the application of "Exception to Special Clauses of Collection" by the end of February each year. (When employer starts business in the middle of year, he must submit the form for Exception to Special Clauses of Collection within 70 days from the establishment date . When there are less than 70 days left from the establishment date to the end of the insuring year, employer must submit the form of "Exception to Special Clauses of Collection" by the end of the insuring year)

◦ How to calculate the number of workers at ordinary time

The number of workers at ordinary time = The total number of insured workers in Employment Insurance on the last                            date of every month last year / The number of months when business was in operation last year

※ In case of workplace where business starts in the middle of the year and employer submits the application for taking out IACI within the legal deadline, the number of workers in the application form could be the number of workers at ordinary time

◦ Even though employer, who is favored with Special Clauses of Collection, hires more than 5 workers in the middle of the year, he could enjoy Special Clauses of Collection until the end of that year.

C. Procedure

◦ Special Clauses of Contribution would be based on the number of insured workers at Employment Insurance and Base wage, according to a quarter-yearly settlement. Firstly, KLWC will figure out the daily number of insured workers at Employment Insurance, in terms of adding up the total number of insured workers for three months and dividing them into the total number of dates for three months. Secondly, KLWC will multiply the daily number of insured workers at Employment Insurance by Base Wage and then by 3 which means 3 months owing to a quarter basis of the whole year. Finally, KLWC will notify employers of Special Clauses of Contribution 10 days before the deadline in payment.

How to calculate Special Clauses of Contribution

- Special Clauses of Contribution at IACA = (The total number of insured workers at EI for every quarter years ÷ The total number of dates for every quarter years)  × Base Wage × 3 × Contribution Rate at IACA

◦ Employers have only to pay Special Clauses of Contribution, which is charged by KLWC, by the final date of every next month of each quarter(Case 1 - When Insurance Relation starts in the middle of year, the deadline in payment is the final date of next month of the quarter when the starting month falls on. Case 2 - When workplace, which is favored with Special Clauses of Collection, terminates Insurance Relation in the middle of year, the employer must pay Contribution within 30 days of Termination Date)

The Deadline in payment at Special Clauses of Contribution

The quarter-yearly settlement	Period	The deadline in payment
The first quarter	1. 1 ～ 3. 31	4. 30
The second quarter	4. 1 ～ 6. 30	7. 31
The third quarter	7. 1 ～ 9. 30	10. 31
The final quarter	10. 1 ～ 12. 31	1. 31 of the following year

D. Reassessment of Special Clauses of Contribution

◦ Reassessment by Employers' request

- Employers could request reassessment, when they don't report their employees's qualification and disqualification at Employment Insurance in an appointed time

- Employers could request reassessment because of changing the kind of business and the establishment date of Insurance Relation

◦ Reassessment by KLWC's authority

- In case that there is any change in the number of insured workers at EI for the former quarter just before KLWC charges Special Clauses of Contribution

- In case of changing the kind of business and the starting date of Insurance Relation

◦ When employer wants to request Reassessment, he should submit the application for "Reassessment of Special Clauses of Contribution" to KLWC. As a result of Reassessment, the difference in amount between the amount paid and the amount assessed will be filled up to non-paid contribution of the next quarter, will be refunded or will be additionally charged.

Section 4. Final Contribution

1. Significance

Final Contribution refers to the amount equal to multiplying the total wages by the contribution rate from the first day of every insurance year(the establishment date if the insurance relation is established during the year)to the end of the year, or the day before the extinction of the insurance relation .

2. Calculation Formula

A. General principle

Multiply the actual total wage(including overdue wage)paid during the concerned year by contribution rate.

Final Contribution ＝ actually paid total wage(including the amount determined to be paid) × contribution rate

B. Calculation using labor rate

It is a principle to multiply the actual total wage by contribution rate for the construction, but if it is deemed difficult to determine the total wage, the labor rate publicly announced by the Labor Minister shall be used to calculate the Final Contribution.

Final Contribution ＝ [direct labor cost + (subcontract cost × labor rate of subcontract)] × contribution rate

※ excluding the amount approved for a subcontractor to pay from the subcontract cost.

C. Working places where base wage is applicable

For working places where the base wage is applicable, the number of workers and their tenure shall be submitted along with Estimated Contribution. However, for reporting Final Contribution, weekly fixed working hours originally used cannot be reduced or increased.

3. Reporting and payment

Employers should fill in the insurance contribution form and submit it to the KLWC by March 31 every year(When Insurance Relations are extinguished in the middle of the year, employers should do it within 30 days of the termination date).

- If the Estimated Contribution paid exceeded the Final Contribution, the excess can be returned or appropriated.

※ When business is conducted by State or Local authorities, such business's Final Contribution could be reported and paid by the end of the year(in case of the continuous business carried forward to next year)

4. Final calculation while Estimated Contribution is unpaid

If Estimated Contribution is not paid before the accurate calculation of Final Contribution, the total amount of Final Contribution shall be paid.

Calculation of arrearage for Final Contribution where the Estimated Contribution is not paid yet

- For the original Estimated Contribution imposed, arrearage shall be calculated for the period from the next day of the statutory payment time-limit of Estimated Contribution(If the contribution is reported after the time-limit, the day on which contribution report is submitted) to the day of the statutory payment time-limit of Final Contribution.

- For additional contribution, arrearage shall be calculated for the period from the next day of due date of Final Contribution(in the case of contribution collection after inspection, the day after the due date written in the bill) to the day before the payment.

- For actual Final Contribution, arrearage shall be calculated from the next day of the statutory payment time-limit of Final Contribution to the day before the payment.

5. Inspection with official authority

If the business owner does not report Estimated Contribution as well as Final Contribution, or if the reported contribution differs from the fact, the KLWC shall have the authority to investigate the workplace to come up with contribution to be paid.

- Arrearage and additional dues shall be additionally imposed

※ But, if employer asks for recalculation of the contribution after having submitted relevant information, recalculation shall be done.

6. Reassessment and Amendment System of Final Contribution(New)

A. Significance

When employer reported Final Contribution within a definite period of time by law but its amount were overestimated or underestimated, he could request Reassessment or Amendment of Final Contribution, which helps to enhance employer's rights and interests.

B. Conditions of Reassessment

◦ Final Contribution should be reported within a definite period of time by law

◦ Final Contribution which was previously reported should exceed Final Contribution to be reported

◦ Reassessment should be requested within one year after a definite period of time by law for reporting Final Contribution

C. Conditions of Amendment

◦ Final Contribution should be reported within a definite period of time by law

◦  Final Contribution which was previously reported should be less than Final Contribution to be reported

◦ It should be done before KLWC examines Final Contribution and gives a notice of it to employer

D. Procedure of requesting Reassessment

◦ When employer wants to reassess Final Contribution which has been already reported, he has only to fill in the application for Reassessment of Estimated Contribution(or Final Contribution) and submits it to KLWC. Then, within two month, KLWC must inform employer of the result as to whether or not Reassessment is accepted.

◦ When employer asks for Reassessment of insurance contribution, he should explain the cause of Reassessment and shows an account book of employees' wage. If employer pays the whole Final Contribution, the difference in amount which was resulted from Reassessment will be filled up to non-paid contribution or will be refunded. If employer does not pay Final Contribution, he must pay the Final Contribution after reducing unpaid Contribution as much as unnecessary contribution.

E. Procedure of amending Final Contribution

◦ When employer wants to adjust his Final Contribution, he has to full in the application for Amendment of Final Contribution, submits it to KLWC and pays the difference in amount which might be additional amount after Amendment.

7. Prescription

If the right to collect the contribution and other dues, and the right to receive return or receive the insurance benefits, has not been exercised for three years, the extinctive prescription shall be completed. Thus, investigations of estimated, Final Contribution and additional dues shall be conducted for the previous three years, and demand for payment shall be sent.

- Extinctive prescription for Final Contribution starts from the first day of the following insurance year. (for business where the insurance relation extinguished during the insurance year, the day after the insurance relation was extinguished)

Section 5. Insurance Affairs Association(IAA)

1. Significance

It is an organization sanctioned by the KLWC to assume insurance affairs of owners of small and medium sized businesses to lessen their insurance affairs burden and complement their ability to process affairs.

2. Subjects

Working places with less than 300 workers, regardless of types of businesses

3. Scope of work

Report on Estimated Contribution and Final Contribution

Report on establishment, change, and termination of insurance relation

Insurance affairs that other business owners must report or declare to the KLWC.

The Insurance Affairs Association is responsible for paying contribution, arrearage, additional dues, etc that the employer entrusted, and shall pay fines that arise from failing to fulfill such role.

-	Thus, employers who are uncomfortable with processing insurance affairs, check out Insurance Affairs Association authorized by KLWC and entrust insurance affairs to the association. Then, the association does all the reporting and declaration work on behalf of the employer.

	Examples which cannot be conducted by IAA
◦ Requesting and Receiving Industrial Benefits ◦ Requesting Review, Second Review

4. Subject of sanction

An organization composed of business owners, which was established by a special act(Korea Federation of Small & Medium Business, Korea Chamber of Commerce & Industry, Construction Association of Korea)

An organization sanctioned by the Labor Minister pursuant to Article 32 of Civil Code.(Korea Employers Federation, etc)

An organization sanctioned and permissioned, or registered or reported by government agency in jurisdiction pursuant to regulations (Federation of Korean Industries, Collective Labor Unions, Labor firm etc.)

A person who has been working more than 3 years as the certified Labor Affairs Consultant on the basis of Act 2, after registering his qualification according to the certified Labor Affairs Consultant Act 5.

5. Subsidy

A. Subsidy for collecting Insurance Contribution

Collection subsidy shall be paid only for the collection of contribution from employers employing less than 100 employees among the entrusting insured

The Standard for Collection Subsidy

employees' number collection rate of contribution	less than 5	more than 5 ~ less than 10	more than 10 ~ less than 100
more than 65/100	₩15,000 per employer
more than 70/100		₩20,000 per employer
more than 80/100	₩15,000 + additional ₩2,000 per employer		₩35,000 per employer
more than 90/100		₩20,000 + additional ₩3,000 per employer
more than 95/100			₩35,000 + additional ₩5,000 per employer

- When to provide Collection Subsidy：twice a year by semester

B. Subsidy for promoting the application of the IACI

Subsidy for promoting the application of the IACI shall be paid when IAA submits the application form of IACI on behalf of employer with less than 100 employees, after being entrusted with such duty from employer.

- The standard of subsidy :  ₩ 30,000 per employer who entrusts IAA with task related with IACI will be paid to IAA. Additional ₩10,000 when more than one year has passed since IAA was entrusted with task, will be paid

- When to provide collection subsidy：twice a year by semester

Section 6. Penalties

1. Fines

Penalty on any person who falls under any of the followings

① a person who fails to report or change Insurance Relation, or who does not report Estimated Contribution and Final Contribution or makes a false report

② a person who makes a false answer, or refuses, interferes with, or evades, any         inspection

③ a person who fails to comply with an order to present documents or objects, or who submits documents after making a false entry

→ a fine of 3 million Won or less

A person who fails to keep the books or other documents, or who makes a false entry

→ a fine of 50,000 Won or less

※ A fine shall be collected in the manner similar to the example of a disposition of national tax in arrears

2. Additional dues

If a owner of business fails to report or pay the Final Contribution within statutory deadline, or if the report differs from the fact, 10/100 of contribution to be paid shall be charged.

- But, if the total sum of additional dues is less than 3,000 Won, or if the failure to report the Final Contribution is due to natural disaster, the imposition of additional dues shall be exempt.

3. Arrearage

If a owner of business fails to pay contribution and other dues within statutory deadline, arrearage of 12/1000 of the overdue amount shall be charged. After statutory deadline, overdue interest of 12/1000 shall be imposed every month and it will continue until 36 months.

- But, if the total sum of arrearage imposed is less than 3,000 Won, if arrearage or additional dues, collection of insurance benefits from the insured, undue gain are overdue, and if overdue payment of contribution and other dues is caused by natural disaster and other reasons acknowledged by the Labor Minister as excusable, the imposition of arrearage shall be exempt.

※ This rule will be applied to overdue payment after January l, 2005 according to Collection Law of Contribution.

4. Collection of Insurance Benefits from employer

A. Significance

Collection of insurance benefits from employer is applicable when insurance benefits are paid to a worker for the accident occurred while his/her employer was negligent in reporting insurance relations establishment or paying contribution. After the above benefits are paid, whole or partial amount of that benefits are to be collected from employer

B. Requirements for collection of insurance benefits from the insured

Following requirements must be met for collection of insurance benefits for an accident occurred while a business owner failed to report on insurance relations establishment.

① The business must belong to mandatory coverage : Businesses that meet certain standard are automatically qualified for establishment of insurance relations.

② Accidents must take place while the insured was negligent in reporting : Business owner shall report to the KLWC within 14 days from the establishment date of insurance relations.

③ The insurance benefits(Medical Care Benefits, Temporary Disability Benefits, Permanent Disability Benefits, Nursing Benefits, Survivors Benefits, severe disease annuity) must be paid or determined to be paid.

Following requirements must be met for collection of insurance benefits for an accident occurred while the insured failed to pay contribution.

① 50% or more of estimate(increased)contribution must be overdue at the time of occurrence of an industrial accident.

② An accident occurred during the period from the day after the statutory deadline to the day before the contribution payment must occur, constituting a cause for benefits claim.

C. Amount of collection

In cases where an accident occurred before report on insurance relations establishment, 50/100 of insurance benefits determined to be paid will be collected.

※ In the above cases, however, collection of benefits is confined to cases where cause for benefits claim occurs from the day medical treatment starts to the end of the month to which the day after 1 year from the start of the treatment belongs.

In cases where an accident occurred during the period of negligence in  payment, 10/100 of the benefits for which the claim was made from the day accident occurred to the day before the contribution payment will be collected.

※ However, the case when the ratio of unpaid contribution to paid contribution is less than 50/100 will be exempted from collection.

D. Imposition of collection of insurance benefits

Permanent disability annuity or survivors annuity are deemed to be determined to be paid in lump-sum on the day the cause for benefits claim occurs.

For collection of benefits, the amount and payment deadline(within 30 days from receipt of the notice) shall be informed in a written manner.

In cases where many reasons compete for collection, only the dues with the highest collection rate of benefits will be collected.

When a employer enjoys the Special Clauses of Collection, he is not disadvantaged from the accident occurred during the period of negligence in payment, different from other employers. Namely, under the Special Clauses of Collection, employer does not need to pay 10/100 of the benefits, even though he fails to pay more than 50/100 of the Insurance Contribution. However, if a employer submits a form for exception of Special Clauses of Collection, he must pay 10/100 of the benefits from the day when accident occurred to the day before more than 50/100 of the Insurance Contribution will be paid, in case of accident during the period of negligence in payment.

Part IV. Benefits of the IACI

Benefits of the IACI

Benefits of the IACI

Section 1. Types and contents of IACI benefits

1. Significance of IACI benefits

IACI benefits are awarded to an employee or his surviving family in cases of his injury, sickness, disability or death arising out of or in the course of his employment with a business or workplace which is covered under the IACI, in order to help the employee safely return to work and guarantee a certain level of income for his family during his recovery or after his death.

	Types of IACI Benefits
◦ Medical Care Benefits : In case of work-related injury or disease for more than 4 days, the whole medical care expenses within National Health Insurance's coverage of medical examination will be covered ◦ Temporary Disability Benefits : The amount equivalent to 70% of the average daily wage for each day off work will be given ◦ Severe disease compensation : Benefits at a high rate for an insured employee who has not recovered from his work-related injury or sickness even after 2 years of medical treatment and suffered from the disability of Grade 1～3 will be paid ◦ Permanent Disability Benefits : For an employee whose work-related injury or disease has resulted in physical or mental impairment even after he has recovered from the injury or disease, it will be awarded according to the extent of disability ◦ Nursing Benefits : For an employee who, owing to work-related injury or sickness, medically requires a constant or occasional nursing and actually receives nursing services, even though he has recovered from the injury or sickness ◦ Survivors Benefits : For the surviving dependent(s) of an employee who dies or is presumed dead due to a work-related reason, it will be granted in order to guarantee a decent living for his surviving family ◦ Funeral Expenses : The actual costs incurred for funeral service in case of an insured employee's death from a work-related cause

2. Medical Care Benefits

A. Definition

Medical Care Benefits are given on an in-kind basis to an employee who contracts a disease or sustains an injury while at work, by having him received medical attendance from medical facilities installed by the KLWC or a KLWC-designated hospital until he does not need medical treatment for the work-related disease or injury any longer.

- However, in case an employee suffering work-related injury or sickness, for an inevitable reason, has received medical treatment at a non-designated medical institution or at his out-of-pocket expenses, he will be paid in cash the amount equivalent to the medical expense.

B. Conditions to benefits entitlement

The employee has been working for an employer who is covered under the Industrial Accident Compensation Insurance Act.

His injury or disease is related to his work in employment.

His injury or disease requires four days or longer of medical attendance.

C. Claimants

Medical institutions, pharmacies and employees

D. Opening of the claims to benefits

The claims to Medical Care Benefits for a work-related injury or disease is opened immediately when the cause of such claims to the benefits occurs.

E. Scope of the benefits

The Medical Care Benefits include all the expenses that the Minister of Labor determines to be needed for providing an injured or sick employee with medical diagnosis, prescription drugs, provision of medical supplies․appliances․artificial limbs and other prosthetic devices, surgical and other medical treatment, transporting him to a medical institution, and hospitalizing or nursing him at such institution.

F. Claims process

	Reason for claims	Documents required
Application for medical care	- When the employee wants to get medical care from a KLWC-designated medical institution.	- 3 copies of the initial application form for medical care to be submitted each to the KLWC, the employer and the medical institution (the blank form is available from the KLWC) respectively - A copy of the bill for medical care expenses to be submitted to the KLWC ․To be accompanied by: ‥Documentary evidence proving the expenses demanded ‥Written claims to insurance benefits subrogated (in case of subrogation of the benefit claims)
Application for medical care expenses	- When the employee, for an unavoidable reason, failed to get advance approval for his medical care and paid the medical expenses out of his pocket.

G. Additional medical care

Additional medical care may be compensable in any of following cases

- In case the employee whose work-related injury or disease had been cured has developed an aggravated physical condition that requires medical attention : provided, that it should be medically proven that there is a reasonable relation on the medical aspect between the previous injury or sickness and the one for which additional Medical Care Benefits are sought, and that there is a medical opinion presented that additional medical care would be considerably effective towards the cure of the later injury or disease.

- In case any material for internal fixation, such as metallic pins, that has been inserted into the body needs to be removed.

- In case it is deemed necessary to perform a second surgical operation on the body area from which a limb or limbs have been amputated, for the purpose of attaching an artificial limb or limbs.

The application form for additional Medical Care Benefits shall be submitted to

- the KLWC branch office having jurisdiction over his employer or the medical institution from which the employee received medical treatment for the last time for the previous injury or sickness.

3. Medical care by korean medicine

A. Coverage

An employee who contracts a disease or sustains an injury while working for an employer covered by the IACI Act may get medical care by korean medical service, if the disease or injury requires 4 days or longer of medical treatment.

B. Scope of the injury and disease compensable

External injuries that demand medical attendance by korean medicine after being surgically treated in a Western manner

Back pains, sprains, musculoskeletal disorders

Occupational disease such as cerebrovascular or cardiac disorders

Other internal diseases that are considered necessary to be treated with korean medicine

C. Options of korean medical treatment

In-patient or out-patient treatment may be given, depending on the state of the injury or sickness.

While the injured or sick employee is hospitalized, he is not permitted to get medical treatment simultaneously in korean and a western manner. However, the combined treatment is possible while he is getting out-patient treatment, so long as the korean and western medical treatment are given on different dates

- The korean and western medical treatment address different kinds of injury or sickness, so that the medical treatment, including medication, is not overlapped for the same kind of injury or sickness.

※ Matters to be attended to

- In-patient cannot go to other hospital for medical treatment as out-patient

- It is not allowed to get medical treatment in more than two medical institutions for the same injury or sickness

- It is not permitted to prescribe both Korean and Western medical treatment for the same injury or sickness

- Korean medical treatment would be possible in medical institutions where both Korean and Western medical treatment could be given

D. Scope of the korean Medical Care Benefits

In principle, the standards and rate of the Medical Care Benefits and the medical fee schedule under the korean medical insurance system shall be applied. In addition, they are supplemented by the standards for computation of the IACI Medical Care Benefits.

Standards of the Medical Care Benefits and the medical fee schedule under the korean medical insurance system

- Fees and expenses of medical examinations and hospitalized care

- Fees and expenses of medication (56 kinds of substances) and drug prescription

- Fees and expenses of acupuncture, moxibustion and cupping aroma treatment

- Yangdorak testing (electric current is sent along the passage of autonomic nerves to detect any disorder or disease in internal organs), Maekjeondo testing (a computerized device is used to check the state of pulses which tells if the spirit and blood (as defined in the korean medicine is in harmony), meridian function testing

※ The medical herbs in package and physical therapeutic services provided by an korean medical institution are not compensable by the IACI fund.

4. How to get prescription drugs at pharmacy

The employee receives a drug prescription from a medical institution for treatment of work-related injury or disease

⇩

He goes to the pharmacist's, carrying the drug prescription and the IACI card or the medical examination card specifying his work-related conditions

⇩

The pharmacist provides drugs based on the prescription, after verifying the prescription and the IACI card or the medical examination card

⇩

The pharmacist claims the medication expense to the KLWC regional headquarters having jurisdiction over the area where the pharmacist is located at

(effective Jan. 1 2003).

⇩

The medication expense is paid, via a bank account, to the pharmacist within 10 days of the claims made.

5. Temporary Disability Benefits

A. Definition

Temporary Disability Benefits are awarded to make up for the earnings loss of an employee who, due to a work-related injury or disease, is off work for medical treatment. This benefit is intended to ensure that the injured employee and his dependants make a minimum living during his recovery.

B. Conditions to benefits entitlement

The employee is 4 days or longer off work for medical treatment of his work-related injury or sickness.

He is not gainfully employed.

C. Claimants

The employee suffering a work-related injury or sickness or his employer on his behalf

D. Timing for claims

Once or more per month. ※ In general, the claims is made once a month.

E. Level of the benefits

For each day off work, the covered employee is awarded the amount equivalent to 70% of the average daily wage.

- However, for those aged 65 or older, the lower rate of 65% is applied (effective Jan. 1, 2001).

※ The exception is that the lower rate shall not be applied to those who contracted a disease or sustained an injury at the age of 65 or older until 2 years have lapsed from the date of occurrence of the work-related contingency.

- The floor of Temporary Disability Benefits has been revised upward from 70% to 100% of the minimum wage rate (effective July 1, 2000).

※ However, for the employees whose work-related injury or sickness accrued earlier than July 1. 2000, the previous 70% shall be applied.

F. Claims process

The injured employee shall complete 3 copies of the application form for Temporary Disability Benefits and submit each copy to the KLWC, the medical service provider and his employer respectively.

- The first application form shall be submitted after the copies are signed by both the employer and the employee, and the second and following application forms shall be submitted after the copies are signed by the employee.

KLWC branch offices to which the application forms shall be submitted

- 1st application : the KLWC regional headquarters or branch office with jurisdiction over the employer of the claimant employee

- 2nd and following applications: the KLWC regional headquarters or branch office with jurisdiction over the provider of medical service

※ When the injured employee asks for Temporary Disability Benefits for the first time, he has to submit the labor contract, the wage ledger for three months just before the occupational accident and the copy of his own bankbook

※ When in-patient submits the application form for Temporary Disability Benefit, he could get benefits by the 10th of every month without asking for Temporary Disability Benefits while he is hospitalized. Namely, the 1st payment is made upon application, and the 2nd and following payments are made automatically

6. Permanent Disability Benefits

A. Definition

Permanent Disability Benefits are awarded to an employee whose work-related injury or disease, even after he has recovered from the injury or disease, has resulted in physical or mental impairment, in order to make up for the resulting loss of his working capability.

B. Conditions to benefits entitlement

The work-related injury or disease of an employee, upon his recovery, has resulted in physical or mental disability.

The disability is reasonably attributable to the work-related injury or disease.

C. Claimants

The disabled employee, or his employer on his behalf

D. Reasons of benefit payment, timing for claims and benefit amounts

	Causes of payment	Timing for claims	Benefits amounts
Lump sum	- The work-related injury or disease results in disability of Grades 4～14.	- Upon recovery from the injury or disease	- Amount equivalent to 55～1,012 days' worth of average wage, depending on the extent of disability
Pension	- The work-related injury or disease results in disability of Grades 1～7. ․Grades 1～3：Pension ․Grades 4～7：Pension or lump sum payment (optional)	- Upon recovery from the injury or disease	- Amount equivalent to 138～329 days' worth of average wage, depending on the extent of disability

※ 1. In case of pension, the 1st payment is made upon application, and the 2nd and following payments are made automatically.

2. In cases where pension payments are not possible because the beneficiary is to go overseas permanently or the beneficiary who is a foreigner is to return to his home country, the disability benefits may be paid in lump sum upon request of the beneficiary.

E. Claims and payment process

The employee submits a written application for disability benefits.	⇒	KLWC notifies the employee of disability review and asks him to turn up for the review (with an X-ray film, electromyogram test results, etc.)	⇒	The disability review is made (by the medical advisor) and the disability grade is determined.	⇒	The compensation (disability benefits) is paid to the employee.

The claimant employee shall hand in a copy of the application form for Permanent Disability Benefits to the KLWC.

- Documents required		An X-ray film (CT or MRI film, or a copy of electromyogram test results)
		A written demand for insurance benefits payment (in case of subrogation of benefit claims)
		A bank account number through which the benefits will be paid

The application form shall be submitted to the KLWC regional headquarters or branch office with jurisdiction over the employer or the medical service provider.

F. Special clauses regarding benefits payment

□ Advance payment

A beneficiary of Permanent Disability Benefits in pension may apply for an advance payment of the pension for the first 1~4 years.

※ A beneficiary with disability of Grades 1~3 may claim advance payment for the first 1~4 years; and a beneficiary with disability of Grades 4~7, for the first 1~2 years.

□ Lump sum payment of the differential

In case, upon death of the beneficiary, the aggregate number of the days which is obtained by dividing the pension amounts so far paid by the corresponding average wage is fewer than the number of days for the lump sum payment, the amount that is obtained by multiplying the difference in the number of days by the average wage at the time of his death shall be awarded in lump sum to his surviving family.

□ Suspension or adjustment of the pension payments

In case the beneficiary of permanent disability pension enters into additional medical care, the pension payment shall be suspended.

In case the beneficiary of disability benefit pension in advance payment enters into additional medical care within the period of advance payment, the amount of Temporary Disability Benefits or Severe Disease Compensation Annuity shall be calculated as follows:

- The amount of Temporary Disability Benefits or Severe Disease Compensation Annuity for additional medical care that resumes within the period of advance payment : (The amount of Temporary Disability Benefits or Severe Disease Compensation Annuity occurred by additional medical care) - (The amount of advance payment of Permanent Disability Pension during additional medical care)

However, for the beneficiaries aged 65 or older to whom the lower rate of Temporary Disability Benefits and Severe Disease Compensation Annuity are applied, such decreases shall be reflected in the above computation.

G. Adjustment of disability grades

When an employee has more than one kind of disabilities that are listed in the disability grade schedule, the highest one among the multiple disability grades rated for him shall be his disability grade.

- If he has more than one kind of disability of Grade 13 or higher, his

disability grade shall be adjusted in a following manner:

	More than one disability of Grade 5 or higher : the disability grade shall be increased by 3 steps
	More than one disability of Grade 8 or higher : the disability grade shall be increased by 2 steps
	More than one disability of Grade 13 or higher : the disability grade shall be increased by 1 step

The disability grade, as a result of the grade adjustment as the above, can not go higher than Grade 1. In case, after the disability grade of an employee is adjusted, the actual degree of his disability is lighter than the kinds of disability listed for the same grade, a lower grade shall be his disability grade, for the purpose of benefits computation.

Permanent Disability Benefits schedule(based on the average wage)
Disability grade	Disability compensation (in pension)	Disability compensation (in lump sum)
Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 Grade 11 Grade 12 Grade 13 Grade 14	329 days' worth 291 days' worth 257 days' worth 224 days' worth 193 days' worth 164 days' worth 138 days' worth	1,474 days' worth 1,309 days' worth 1,155 days' worth 1,012 days' worth 869 days' worth 737 days' worth 616 days' worth 495 days' worth 385 days' worth 297 days' worth 220 days' worth 154 days' worth 99 days' worth 55 days' worth

7. Nursing Benefits

A. Definition

The Nursing Benefits are awarded to an employee whose work-related injury or sickness, even though he has recovered from the injury or sickness, medically requires a constant or occasional nursing. This benefit is paid only when such employee actually receives nursing services.

B. Coverage and sub-types

Constant Nursing Benefits are awarded to

① Those with disability of Grade 1 with regard to functions of the nervous system, mental sanity or the thoracic or abdominal organs

② Those with disability of Grade 1 with regard to both eyes, both arms or both legs, along with disability of Grade 7 or higher in other body areas

Occasional Nursing Benefits are awarded to

① Those with disability of Grade 2 with regard to functions of the nervous system, mental sanity or the thoracic or abdominal organs

② Those with disability of Grade 1 who are not entitled to the Constant Nursing Benefits above(It will also include those whose disability grade is adjusted to Grade 1)

③ Those with disability of Grade 2 with regard to both eyes, both arms or both legs, along with disability of Grade 7 or higher in other body areas

④ Those who have lost both thumbs and all fingers, thus cannot eat without other's help

⑤ Those whose work-related sickness has rendered them so invalid that they cannot make any move without other's help.

※ When a beneficiary of Nursing Benefits is admitted to a free-of-charge institution for medical attendance and the actual cost of nursing is less than the given rate of Nursing Benefit, he shall be awarded only the amount equivalent to the actual nursing cost.

C. Demand and Methods of benefits paymentfor payment

The beneficiary of Permanent Disability Compensation may claim the Nursing Benefits, after receiving the disability benefits, by submitting a Nursing Benefits application form that specifies disabled body parts and everyday life difficulties caused by his disability.

Those in need of constant nursing shall be awarded the full amount set by the Labor Ministry for Nursing Benefits, while those in need of occasional nursing shall be awarded 2/3 of the amount of Constant Nursing Benefits.

Nursing Benefits by year
Applicable period	Constant nursing (Won per day)	Occasional nursing (Won per day)
Sep. 1 2004 ~ Aug. 31 2005	34,977	23,318
Sep. 1 2003 ~ Aug. 31 2004	33,600	22,400
Sep. 1 2002 ~ Aug. 31 2003	31,900	21,270
Sep. 1 2001 ~ Aug. 31 2002	29,000	19,330
Sep. 1 2000 ~ Aug. 31 2001	26,000	17,340

The Nursing Benefits payment shall be made on a monthly basis for the days when nursing services are actually given.

The number of nurses compensable under the IACI is limited to one per employee in need of nursing.

D. Effectivity

The above provisions concerning Nursing Benefits shall apply to those whose medical treatment for work-related injury or sickness started on July 1, 2000 or later.

※ In other words, those who had medical treatment of his work-related injury or disease finished before July 1, 2000 are not applicable. However, they are also entitled to Nursing Benefits, in case they entered into additional medical care on July 1 or afterwards and they are qualified for Nursing Benefits as of the time when the resumed medical care is completed.

8. Survivors Benefits

A. Definition

The Survivors Benefits is awarded to the surviving dependent(s) of an employee who dies or is presumed dead due to a work-related reason, in order to guarantee a decent living for his surviving family.

B. Conditions to benefits entitlement

The covered employee dies or is presumed dead due to a work-related reason.

※ When a covered employee is presumed to be dead for a work-related reason, he is presumed dead on the date of occurrence of the contingency or the date when he is found missing.

	When a covered employee is presumed to be dead
① When ship or airplane is sunken, fallen, destroyed or missing and the fate of employee on ship or airplane is unknown for about three months after such accident ② When employee in ship or airplane is missing and his fate is unknown for about three months from the date of missing date ③ When the fate of employee who is in accidents such as natural disaster, fire, the demolishment of building, etc is unknown for about three months from the date when accidents happen

C. Methods of benefits payment

In principle, the benefits shall be paid in pension (a monthly amount equivalent to 52~67% of average wage).

50 % in lump sum payment : Upon request of the pension beneficiary, 50% of the Survivors Benefits (1,300 days' worth of average wage) may be awarded in a lump sum and the remaining 50% may be paid in pension.

※ In principle, the Survivors Benefits shall be paid in compensation annuity. However, in case, at the time of death of the covered employee, there is no dependent qualified for the compensation annuity or the dependent entitled to such annuity permanently resides overseas, the benefits may be paid in lump sum.

D. Claimants : Beneficiary of the benefits (qualified surviving dependents of the dead employee) or his employer (in case of subrogation of the claims)

E. Beneficiaries of the Survivors Pension

The wife (whether in legal or de facto marriage) of the employee as of the time of his death, and those who are his dependents at the time of his death and fall under any of the following ①～⑤

※ Except for wife, other dependents are qualified for the entitlement only when they  meet certain requirements concerning age or disability.

① Husband (whether in legal or de facto marriage), parents or grandparents, who are aged 60 or older

② Children or grandchildren younger than 18

③ Brothers or sisters younger than 18, or aged 60 or older

④ Husband, children, parents, grandchildren, grandparents, brothers or sisters, who have disability of Grade 3 or higher

⑤ An unborn child at the time of the employee's death (acquires the right to the survivor benefits upon its birth).

※ The highest priority of the benefits claims is given to the spouse (whether in legal or de facto marriage), followed in order by children, parents, grandchildren, grandparents and siblings.

F. Disqualification for and transferability of the benefits entitlement

The right to Survivors Benefits, if the person with the highest priority in terms of the benefits claims is disqualified for such reasons as his/her death or remarriage (in case the person is the spouse of the dead employee), shall be transferred to another person with the same priority or, if there is no such person, to the person(s) with the second highest priority.

G. Lump sum payment of the differential

When the beneficiary of the Survivors Benefits is disqualified for entitlement for the reason of death, etc. and there are no other people qualified for entitlement, if the aggregate number of the days that is obtained by dividing the pension amounts so far paid by the corresponding average wage is less than 1,300 (days), the amount that is obtained by multiplying the difference between the calculated number of days and 1,300 by the average wage as of the time of disqualification shall be paid in lump sum to a surviving family member who otherwise would not be qualified for the benefits.

H. Claims process

The claimant shall submit an application form for Survivors Benefits and Funeral Expenses, along with a copy of death certificate (a coroner's inquest statement), a copy of the family register, a copy of the resident registration card of the prospective beneficiary (in case of an immigrant employee, a copy of the passport, a copy of the marriage certificate, or any other certificates issued by his/her government that can prove that the claimant and the dead employee belong to the same family), to the KLWC.

The application form with other documents required shall be submitted to the KLWC regional headquarters or branch office that has jurisdiction over the area where the workplace of the dead employee is located.

9. Severe Disease Compensation Annuity

A. Definition

The Severe Disease Compensation Annuity is awarded to an insured employee who has not recovered from a work-related injury or sickness even after 2 years of medical care and requires a prolonged period of medical treatment. This type of benefit is given in lieu of and at a higher rate than Temporary Disability Benefits, in order to ensure that the injured or sick employee and his dependents can make a stable living.

B. Conditions to benefits entitlement

The insured employee has not recovered from his work-related injury or sickness even after 2 years of medical treatment. (In case an employee with disability of Grade 1～3 enters into additional medical treatment, it shall be deemed as if 2 years have passed since the first medical treatment started.)

The employee suffers a work-related injury or sickness that constitutes the invalidity grade 1～3.

Severe Disease Compensation Annuity schedule
Invalidity grade	Amount of the compensation annuity
Grade 1 Grade 2 Grade 3	329 days' worth of average wage 291 days' worth of average wage 257 days' worth of average wage

C. Claimant : the insured employee

D. Timing for claims

When 2 years have passed from the date the medical treatment for the work-related injury or disease began and the invalidity grade is determined

E. Claims process

The claimant shall fill out and submit to the KLWC an application form for Severe Disease Compensation Annuity within 14 days from occurrence of the reason for claims.

※ Once the 1st application form is handed in and accepted by the KLWC, the 2nd and following payments of the compensation annuity are automatically awarded.

The (1st) application form shall be submitted to the KLWC regional headquarters or branch office having jurisdiction over the provider of medical service.

F. Effects of the payment of Severe Disease Compensation Annuity

The entitlement to Temporary Disability Benefits is terminated (in case a beneficiary of the disability annuity resumes compensable medical treatment, he will not be entitled to the disability annuity any longer).

In cases where an employee continues to receive Severe Disease Compensation Annuity even after the lapse of 3 years from the date of medical care commencement, it shall be deemed as if, for the purpose of Article 20, paragraph 2 of the Labor Standards Act, the employee has been paid lump sum compensation for his injury or disease.

G. Reduced rate of the annuity, and upward revision of the annuity floor

For an insured employee aged 65 or older, the amount of compensation annuity to be paid shall be reduced to 93% of the full amount (effective Jan. 1, 2001).

※ However, in case an insured employee under the medical treatment, who contracted a disease or sustained an injury at the age of 65 or older, the reduced rate above shall not apply until 1 year has elapsed from the date of commencement of his injury-disease compensation annuity.

The floor rate of Severe Disease Compensation Annuity, which was previously 100% of the minimum wage, is revised upward to 100/70 of the minimum wage.

10. Funeral Expenses

A. Definition

This benefits are awarded in the case of an insured employee's death from a work-related cause, in order to finance the actual costs incurred for his funeral service.

B. Claimant : The organizer of the funeral service

C. Timing for claims : After the funeral service is finished

D. Level of the benefits

The amount equivalent to 120 days' worth of average wage

In case the Funeral Expenses claimed are higher than the maximum set by the Labor Minister or are lower than the minimum also set by the Labor Minister, the funeral expense to be paid shall be the maximum amount or the minimum amount, as the case may be.

Applicable period	Max. Amount (KRW)	Min. Amount (KRW)
Sep. 1 2004 ～ Aug. 31 2005	10,360,275	7,078,875
Sep. 1 2003 ～ Aug. 31 2004	9,932,840	6,669,440
Sep. 1 2002 ～ Aug. 31 2003	9,264,595	6,279,595
Sep. 1 2001 ～ Aug. 31 2002	8,904,939	6,022,419
Sep. 1 2000 ～ Aug. 31 2001	8,599,940	5,755,730

E. Claims process

The claimant shall fill out and submit to the KLWC an application form for Survivors Benefits and Funeral Expense.

Section 2. Average Wage Adjustment Scheme

1. Average wage

A. Definition

The average wage is a daily-based amount which can be used to compute several IACI benefits, including Temporary Disability Benefits, Permanent Disability Benefits, Survivors Benefits, Severe Disease Compensation Annuity and Funeral Expenses.

B. The formula of average wage calculation

Average Wage	=	Total amount of the wage for the 3 months immediately preceding occurrence of the reason for calculation
		Total number of the days for the 3 months immediately preceding occurrence of the reason for calculation

※ "Total number of the days of the 3 months" refers to the number of calendar days,  not to the number of days worked, in the immediately preceding 3 months,

		Durations and pays not countable in calculating the average wage
	1) The time unworked due to medical treatment of a work-related injury or disease 2) The time unworked due to a cause attributable to the employer 3) The period of time for probationary work 4) The duration of pre- and post-natal leave 5) The duration of childcare (parental) leave 6) The period of time of lawful industrial actions (strike) 7) The time unworked due to the duties under the Military Service Act, Reserve Forces Act or Civil Defense Act 8) The time unworked, with prior approval of the employer, due to an injury or sickness not related to work, but approved by the employer.

C. Special clauses concerning average wage

□ If the computed average wage for a particular employee is lower than his normal wage, the IACI benefits shall be calculated based on the normal wage, as if his normal wage were the average wage for the purpose of benefits calculations.

□ Guarantee for the minimum level of compensation

In case a particular employee's wage is so low that it is not proper to use his average wage in computing the IACI benefits, the minimum compensation rate set by the Labor Minister shall apply as if the minimum rate were the employee's average wage.

The following minimum rate shall apply in calculating Permanent Disability Benefits and Survivors Benefits

Applicable period	Minimum rate for compensation (KRW/day)
Sep. 1 2003 ~ Aug. 31 2004	41,869
Sep. 1 2003 ~ Aug. 31 2004	37,020
Sep. 1 2002 ~ Aug. 31 2003	33,570
Sep. 1 2001 ~ Aug. 31 2002	31,000
Sep. 1 2000 ~ Aug. 31 2001	28,000

□ Special clause concerning calculation of average wage for those suffering pneumoconiosis and other occupational diseases

Purpose

- In cases of the employees who contract an occupational disease, notably including pneumoconiosis, since it is admitted that, especially around the time they are found to have developed or accumulated the work-related disease, the resulting time-off and reduced job performance may affect their average wage, special provisions shall apply to them with regard to calculating their average wage.

Coverage of the special clauses

- An employee suffering an occupational disease (including pneumoconiosis) whose average wage is lower than the average wage listed in the Monthly Labor Statistical Survey

- An employee suffering an occupation disease (including pneumoconiosis) whose average wage cannot be computed because, for example, his workplace has been shut down temporarily or permanently, or he had already retired from the company

Calculation formula

- In order to obtain the average wage of such employee as the above, the monthly wage of a comparable employee shown in the Monthly Labor Statistical Survey shall be added up for 1 year ending on the last day of the quarter which are two quarters before the quarter which contains the date when the employee's disease was declared work-related. Then, the total of monthly wages shall be divided by the number of the days in that year.

※ "The date the employee's disease was declared work-related" refers to the date when a written opinion of the first medical examination or a medical certificate that verifies the employee's eligibility to the IACI benefits for occupational diseases is issued.

- In identifying 'comparable employees' of the particular employee, 4 elements should be taken into account : they are in the same gender as the particular employee, and they are hired for the same job as he is, for a company that is in the same industrial sector and of the same size group as his company.

□ Special clause on average wage of those with an extraordinary job status

Purpose

- In cases of the employees who are hired or paid on a daily basis, their average wage calculated based on their daily wages is frequently higher than the average of their earned income. With a view to addressing this problem, a different formula shall be applied in calculating their average wage.

Calculation formula

- The average wage is obtained by dividing the total wage of 1 month by the number of days worked in that month, and then multiplying the outcome by the normal work coefficient (73/100).

※ If the employee had not received any wage from his employer for the month immediately preceding the date when the reason of average wage calculation occurred but there is pre-determined daily pay rate, 73/100of the pre-determined daily pay rate shall be used or, if no such rate exists, 73/100 of the daily wage of comparable employees shall be used.

Exceptions

① The special clause above shall not apply, in case other daily workers carried out the same kind of job employed in the same business fall under any of the following, as of the date when the reason of average wage calculation occurred.

․they have been employed for 3 or more consecutive months.

․the average monthly number of days worked for 3 months is higher than 22.3 (which is obtained by multiplying the number of days in a month by the normal work coefficient).

․their job status is similar to that of full-time employees, given all the relevant elements (working conditions, the contract of employment, etc.).

② In case a daily employee with service period of 1 month or longer files a complaint to such extraordinary calculation, submitting documentary evidence about the amount of the wage paid.

2. Automatic adjustment of average wage

A. Purpose

If the amount of benefits that was based on the average wage computed at the time of the contingency is not linked to the constant rise in the prices but remains unchanged, it would lead to a relatively low quality of living for the employee and his dependents. The scheme of automatic adjustment of average wage is intended to prevent such problem for the prolonged patients and pensioners.

B. Adjustment process

ㅇ The applicant shall fill out an application form for average wage adjustment and submits it to the KLWC, along with a copy of payroll or any other document to prove actual changes in wages.

- Documents required : a copy of the payroll of a comparable employee with the same kind of job

ㅇ In case of automatic adjustment of average wage, the applicant should attach the document which specifies the need of automatic adjustment, along with the form for average wage adjustment.

ㅇ The KLWC could increase or decrease average wage by authority, if necessary.

ㅇ The application form shall be submitted to

- For average wage adjustment : the KLWC regional headquarters or branch office having jurisdiction over his employer

- For automatic adjustment of average wage : the KLWC regional headquarters or branch office having jurisdiction over his employer or the medical service provider

C. Those entitled to apply for automatic adjustment

① Beneficiaries of disability compensation annuity, ② beneficiaries of Survivors Benefits, ③ retired workers, ④ employees of the business shut down temporarily or permanently, ⑤ incumbent workers who have no comparable employees at the same workplace

D. Application for automatic adjustment

The applicant shall fill out an application form for automatic adjustment of average wage and submit it to the KLWC, along with the document that specifies the need of automatic adjustment.

3. Application of the maximum rate of compensation

A. Purpose

It will apply to the insured employees whose IACI Benefits exceed the maximum rate of compensation the Minister of Labor discloses, for fear of incongruity and moral hazard among the injured. It is said that the way to calculate compensation is somewhat insufficient to satisfy redistribution of income, which is one of functions as social insurance, because IACI Benefits are based on the average wage.

B. Applicable Rate

The Labor Minister shall disclose the maximum rate of compensation that may be used as the average rate for the purpose of calculating benefits amounts. The following shows the maximum rate by year

Applicable period	Maximum rate (KRW/day)
Sep. 1 2004 ～ Aug. 31 2005	151,249
Sep. 1 2003 ～ Aug. 31 2004	145,800
Sep. 1 2002 ～ Aug. 31 2003	133,070
Sep. 1 2001 ～ Aug. 31 2002	127,084
Sep. 1 2000 ～ Aug. 31 2001	122,807

C. Types of benefits covered

Temporary Disability Benefits, Permanent Disability Benefits, Survivors Benefits and Severe Disease Compensation Annuity

D. Effectivity

For those who contracted a disease or sustained an injury on July 1, 2000 or later : the rate above shall apply from the beginning.

For those who contracted a disease or sustained an injury before July 1, 2000 : the rate above took effect as of Jan. 1, 2003.

Section 3. Protection of the right to benefits entitlements

1. Protection of the right to entitlements

A. Purpose

The law prohibits the IACI benefits entitlements from being transferred to a 3rd party or being attached by a 3rd party, with a view to ensuring a stable living for the injured or sick employee for a work-related reason or/and his dependents.

B. Details

The benefits entitlement may not be terminated for such reasons as retirement or suspension from office. (However, it is terminated according to the provision on the prescriptive period, unless the entitlement is used within 3 years from its generation.)

The entitlement may not be transferred to a 3rd party (even in case the 3rd party is a family member).

The entitlement may not be attached, even for the purpose of forceful execution under the Civil Code or collection of taxes in arrears.

		Subrogation of the IACI benefits entitlements
	In case it is admitted that the employer paid, in advance, the money equivalent to the IACI benefits for work-related injury or disease to the injured worker, the employer may subrogate the benefits entitlements of the employee. 1) If it is proven that the employee who is entitled to IACI benefits has received the money equivalent to the benefits amount from the employer, the employer may subrogate the entitlement. 2) Types of benefits that can be subrogated - Medical Care Benefits, Temporary Disability Benefits, permanent disability lump-sum benefits, survivors lump-sum benefits, and Severe Disease Compensation Annuity ※ In case the employer has paid the employee the money equivalent to Permanent Disability Benefits or Survivors Benefits whose payment can be made in pension, it shall be deemed that the employer has paid the money equivalent to the permanent disability or Survivors Benefits, as the case may be, in lump sum. 3) Requirement for subrogation ： The employer shall submit the application form for payment of the insurance benefits subrogated to the KLWC.

2. Award of unpaid insurance benefits

A. Purpose

In case of death of a beneficiary of the IACI benefits, if there remains any amount of the benefits unpaid to the beneficiary, the unpaid portion shall be awarded to his surviving family. Namely, there is no doubt that beneficiary's right is sort of property rights and should be succeeded to a legal heir according to the Civil Law. However, as far as the occupational accidents are concerned, the application of inheritance under the Civil Law will be excluded for the purpose of the rapid compensation.

B. Qualified claimant

In case the unpaid benefits are Medical Care Benefits, Temporary Disability Benefits, Permanent Disability Benefits, Severe Disease Compensation Annuity or Funeral Expenses, the surviving family of the dead beneficiary shall be entitled to claim the benefits, and the scope of the surviving family shall be determined under Article 50 of the IACI Act and Article 46 of the Enforcement Decree of the Act.

In case the unpaid benefits are Survivors Benefits, the surviving family member with the second highest priority in the right to claim the benefits after the dead beneficiary shall be entitled to claim the benefits.

In case a beneficiary of the IACI benefits dies before making a claims to such benefits or before, although he had made such claims, the benefits are yet to be paid, the person, among the surviving family members under Article 43 of the IACI Act, with the second highest priority in the right to claim the benefits after the dead beneficiary shall be entitled to claim the unpaid benefits.

C. Claims process

In case a beneficiary had made a claims to the IACI benefits but died before the benefits were paid, a qualified surviving family member shall receive the unpaid benefits under his/her name.

In case a beneficiary died before making any claims to the IACI benefits, a qualified surviving family member shall, under his/her name, claim and receive the unpaid benefits.

Section 4. Undue gains collection, legal liability, etc.

1. Collection of undue gains

A. Purpose

In case the IACI benefits have been wrongfully paid because the claimant was fraudulent or deceptive in providing the information required, or failed to report changes in the previous information, or for any other reasons, the KLWC shall collect the mistakenly given amounts, ensuring that the payments of the insurance benefits are made in a fair manner.

B. Amounts to be collected

In case the claimant provided untruthful information or took any other fraudulent action to get the benefits, he shall repay twice the amount paid. If the employer reported untruthful information or verified that the wrongful information was true, both the claimant and the employer shall be responsible.

In case the beneficiary or the once beneficiary failed to comply the obligation of reporting any changes in the information relevant to the benefits eligibility, he shall repay equivalence to the amount wrongfully paid.

C. Collection process

In case it is decided that the unfairly paid benefits will be collected, the KLWC notifies the person liable to repay of its decision. The person shall repay the prescribed amount within 30 days from the date of arrival of the notification.

In case the person liable to repay is to award the IACI benefits, the collectable amount may be counterbalanced by up to 10% of each monthly payment of the benefits.

- In counterbalancing the collectable amount by the benefits to be awarded, the KLWC shall ask for the opinion of the beneficiary (the person with liability) and then notify him of its decision.

If such unfair payments are not collected within a given period of time, they are to be redeemed in the same manner that is used to collect the national taxes in arrears.

2. Legal liability against the 3rd party

A. Purpose

In case of an occupational accident attributable to the 3rd party's act, in compensating the employee(s) suffering the resulting injury or disease, the 3rd party should be held accountable for his/her act. The 'liability against the 3rd party' is intended to forbid the 3rd party who is responsible for an occupational accident to get away with his wrongfulness, and to ensure that the IACI fund is financially sound.

※ What is "the 3rd party's act"? :The act, whether intentional or unintentional, of a person other than the insurance policyholder (employer), his employees or the beneficiary employee, which caused the occupational accident concerned

B. Conditions to the liability against the 3rd party

① The occupational accident was caused by the act of the 3rd party.

※ When a business was split into plural smaller businesses and each had been separately operated by different employers at the same place, if an occupational accident that affected an employee of a particular employer had occurred due to the act of an employee (the 3rd party) of another employer, the provision concerning the liability against the 3rd party shall not apply (that is, the liability cannot be effected, although it is true that the accident is attributable to the 3rd party's act).

② The IACI benefits have been paid to the injured or sick employee.

C. Scope of liability

The 3rd party who is held accountable for an occupational accident shall pay, in damages, the amount of insurance benefits paid, the legal cost incurred by the proceedings for the liability, and the interests occurred at a statutory rate on the paid benefits for the period from the date of payment to the date of collection.

D. Relation between Indemnities of damages and the insurance benefits

In case the beneficiary has been paid damages by the 3rd party for an occupational accident, he shall be awarded insurance benefits for the same accident only after the amount of damages paid by the 3rd party is subtracted from the original amount of the insurance benefits that would be awarded if the damages had not be paid.

E. Claims process

The claimant shall make a written report on occurrence of an occupational accident due to the 3rd party's act, to the KLWC.

3. Relations with other compensation payments or damages

A. Purpose

It is necessary to relate the IACI benefits and other compensation payments or indemnities to each other, in order to coordinate them and prevent overlapped payments for the same accident.

B. Relations with other compensations or damages

◦ In case an employee is compensated for an occupational accident under the IACI,

- the liability under the Labor Standards Act to compensate for the same accident shall be exempted within the limit of the IACI benefits paid.

- the insurance policyholder (employer) shall have his liability, under the Civil Code and other legislation (e.g. the law on automobile liability insurance), to compensation for the same accident exempted within the limit of the IACI benefits paid.

- the disability annuity or survivors annuity under the National Pension Act shall be awarded only at 50% of the amount that would be awarded if the IACI benefits had not been paid.

※ In case the injured or sick employee has received the money equivalent to the IACI benefits from the employer for an unavoidable reason, the employer may be authorized by the employee to claim the benefits at the KLWC.

Section 5. Administrative Remedies

1. Remedies regarding the complaints on the decisions of IACI benefits

In case a claimant to the IACI benefits is dissatisfied with any KLWC decision on his claim to which he believes he is entitled, he may file a request for review or a second review of the decision. (The complaints filed against the KLWC with regard to its decision on the IACI benefits shall go through the review process comparable to the administrative adjudication under the Administrative Adjudication Act.)

Payment of benefits

Application for IACI benefits

Occurrence of an occupational accident

If the application is not accepted (benefits not paid) and the claimant disagrees with the KLWC decision

The claimants decides whether to file a request for review or bring the case to administrative proceedings.

Administrative Court

Administrative proceedings

Application accepted

Submission of the request for review (to a competent KLWC branch)

Review (by the KLWC headquarters)

Results of the review

Withdrawal of the original decision

(IACI benefits will be paid)

Turn-down or return of the request for review

Industrial Accident Compensation Insurance Review Committee (under the Labor Ministry)

※ With the amendments in the Administrative Adjudication Act (effective March 1 1998), a claimant may go right to the Administrative Court without undergoing the process of requesting a review or a second review of the KLWC decision.

The process of filing a request for review

2. Process for filing a request of review

In case a person disagrees with the KLWC decision on the IACI benefits that he has claimed, he may file a request for a review of the decision, via a KLWC regional headquarters (or branch office), to the KLWC headquarters, within 90 days from the date when the decision was known to him.

A. Scope of the issues subject to the review

KLWC decisions or measures as regards the IACI benefits

- Decisions with regard to the claims to Medical Care Benefits, Temporary Disability Benefits, Permanent Disability Benefits, Nursing Benefits, Survivors Benefits, Severe Disease Compensation Annuity or Funeral Expenses.

- Decisions on collection of the undue gains obtained from the IACI benefits

- Measures taken to collection of the benefits from the insured

※ The complaint on the KLWC decision on level of insurance contribution imposed shall be brought to the Administrative Court.

KLWC responses to complaints or questions about IACI benefits

- As the KLWC responses or replies to complaints or questions in writing shall be deemed as simple notifications, not as administrative actions, they are not subject to the review.

- The administrative action of the KLWC, which can be brought to the review by its headquarters, is made only after it has received a written application for the IACI benefits. (When it is decided that the application for the benefits is not accepted or the benefits claimed are not to be paid, the applicant of the benefits may file a request for a review of such decision.)

B. Eligibility for the request of review

The alleged beneficiary of the IACI benefits (an insured employee or his surviving dependent), a legal representative (lawyer or certified labor specialist) on his behalf, or his employer

C. Process for filing a request for review

Complainant : Submit 2 copies of the written request for review to the KLWC branch that had made the decision or taken the measure in dispute.

The KLWC branch : Forward a copy of the written request, along with its written opinion, to the KLWC headquarters, within 5 days from the arrival of the written request.

KLWC headquarters : Reviews the case.

※ The KLWC headquarters shall issue a decision within 30 days from the date when the case was forwarded to it.

D. Turndown of the requests for review

The requests for review that fall under any of the following shall be turned down, without being brought to the review by the KLWC headquarters

- In case the request concerns an issue that cannot be reviewed since a given period of time for such challenge has already exhausted.

- In case the request concerns the KLWC response, in writing or on telephone, to a complaint or question, which cannot be regarded as an official decision or measure of the KLWC.

- In case the request is filed by a person who is not qualified to do so.

3. Request for second review

If the person is still dissatisfied with the KLWC's decision on the request for review, he may file a request for second review, via the KLWC regional headquarters (or branch office), with the Industrial Accident Compensation Insurance Review Committee, within 90 days from the date when such decision was known to him.

The procedures and duration of the request for second review are the same as in the case of the request for review.

Part V. Employee Rehabilitation and Welfare Programs

Employee Rehabilitation & Welfare Programs

Employee Rehabilitation & Welfare Programs

Section 1. Programs for rehabilitation of injured employees

1. Rehabilitation counseling

The employees who are suffering a work-related injury or sickness are being provided with rehabilitation counseling services in order to assist them in returning to their working and social life.

A. Definition

Rehabilitation counseling services, which are aimed at helping the injured employees successfully return to their social life and find a gainful job, include vocational evaluation, setting up a rehabilitation plan, vocational training, job information and placement and follow-up services, as well as psychological counseling by specialists for consolation purpose.

B. Process of rehabilitation counseling

Those who are under medical treatment : Occurrence of work-related accident ⇒ Consolatory visit ⇒ Basic counseling such as psychological counseling ⇒ Seeking the route to return to work ⇒ Selection of person receiving rehabilitation services

Those who have completed medical treatment or are under medical treatment at home : Basic counseling ⇒ Initial interview ⇒ Job evaluation ⇒ Setting up rehabilitation plan ⇒ Provision of services(rehabilitation sports, vocational training, providing job information, supporting business start-up, connecting with the communities for support, etc) ⇒ Job placement(employment or business start-up) ⇒ Follow up services(maintaining job stability)

C. Beneficiaries of rehabilitation counseling services : all the employees whose injury or sickness is work-related

D. For more information on rehabilitation counseling services, contact the rehabilitation counsellor at the nearest KLWC regional headquarters or branch office.

2. Rehabilitation Training Centers in Ansan and Gwangju

The vocational rehabilitation training courses are given to the disabled employees so that they can acquire more skills and a better employability needed to find a new job or start a business of their own.

Those who satisfy all of the followings can take the courses

- Those with disabilities who are injured resulting from work-related reasons

- Those aged less than 50 who are able to make normal movement for themselves

※ From Jan. 1, 2005. The above course will be available to the foreign workers who are injured due to work-related reasons.

B. Duration of training : 1 year(Meeting some requirements allows early completion)

C. Training courses

Ansan Center : fashion design, photographing, electronic publishing, advertisement design and metal handicraft

Gwangju Center : fashion design, advertisement design, industrial installations and information & communications technology (ICT)

D. Application for admission

Applications shall be made between the 1st and the 20th day of the last month of each quarter.

Supports to the trainees

- Free-of-charge training and monthly payment of training allowance

- Free-of-charge rooms․meals․uniforms

- Payment of the qualification allowance to the trainees who have acquired a National Technical Qualification

- Low-interest loans for living and shop rents, to the training graduates

- Vocational rehabilitation counselling services, including psychological counselling and job placement service

※ In case the number of applicants exceeds capacity of the Center, priority shall be given to those who suffer a serious degree of disability or whose medical treatment has been completed very recently.

E. For more information, contract:

Ansan Center at 031-4008-215 (http://asrt.or.kr)

Gwangju Center at 062-971-8800, 8811~2 (http://my.okwecan.org)

3. Supports for vocational training costs

With a view to helping the disabled workers have a better access to job training opportunities, financial supports are awarded to the trainees of a private training service provider.

A. Qualified applicants : those younger than 60 of age whose disability is work-related and who have no paying job as of the date of application for the training cost supports

B. Number of beneficiaries : approximately 3,000 in a year (Selection after this process : initial interview - job evaluation - setting up rehabilitation plan)

C. Coverage of training courses

All the training courses that concern the qualifications under the National Technical Qualification Act or the Framework Act on Qualifications, or that can be recognized or accredited as training courses for vocational ability development

Courses excluded from the above supports : General course such as current or general knowledge, regular education course aimed at giving a degree of college or above, driver's license acquisition course[acquisition course on the license for bus or truck, constructing machine, special vehicle is supportable), foreign language course, course on painting, music, art martial]

D. Coverage of training providers

The institutions providing training courses for vocational ability development under the Vocational Training Promotion Act, the educational institutions as defined in the Act concerning Establishment & Operation of Educational Institutions and Extra curricular teaching.

E. Coverage of training duration : up to 1 year

F. Level of the supports

Training costs, including tuition fees and other expenses for training practices, are directly paid to the training provider, within the limit of KRW 1.3 milion per trainee

Trainee can be paid monthly training allowance equivalent to 70% of minimum wage announced by Labor Minister and also paid some incentives(KRW 150,000) in case of his returning to work less than 6 months after completion of courses. In addition, if he wants to start business, he will be assisted by the supports for business startup program.

G. For more information, contact the KLWC regional headquarters or branch office.

4. Supports for business startup

Those with work-related disabilities who want to start their own business are offered low-interest loans for shop rents so that they can be self-employed in a regional area they want. In addition, they are provided with free-of-charge business consulting throughout the period of supports.

A. Coverage of beneficiaries

Those who graduated (or are expected to graduate) from the training courses at Ansan or Gwangju Rehabilitation Training Center

- Those who completed a prescribed training course at the Rehabilitation Training Center on March 1, 1997 or after

- Those who participated in 80% of the training course or, those who acquired a qualification related to the course after having participated in 60% of the course

Those who graduated from a vocational training course whose costs can be covered by the aforementioned KLWC supports on March 1, 1998 or after(except for those who completed a training course shorter than 1 month, or a training course for the driver's license)

Those who have acquired a qualification under the Framework Act on Qualifications or the National Technical Qualification Act(except for those who acquired private license not acknowledged publicly and the driver's license)

Those who have been awarded the IACI disability benefits for having developed pneumoconiosis.

※ The business startup supports are limited to those who want to get self-employed in the business area that is related to the training course they have taken. The exceptions are those suffering pneumoconiosis : they are granted the supports mentioned above, whether or not their business is related to the training course.

※ Those who age less than 20 or more than 60, as of the day the application is received, are excluded from the above supports

B. Level of supports

Loans for shop rental : up to KRW 70 million (KRW 100 million, in Seoul City and metropolitan cities) per person or a deposit including monthly rent(the applicant is responsible for the monthly rent less than KRW 800,000)

※ In case the recipient has already taken a loan for stable living, the maximum amount of loan for shop rental is KRW 70 million(KRW 100 million, in Seoul City and metropolitan cities) including the existing loan amount.

Interest rate : annual 2% (to be paid in monthly equal installments)

Period of supports : up to 5 years, based on a 1-year or 2-year lease contract period

C. Process of supports

Application for supports (throughout the year) ⇒ review of eligibility ⇒ consulting service for selecting a shop location and business startup preparations, assessment ⇒ notification of the decision (on whether to provide supports or not) ⇒ signing of a lease contract ⇒ delivery of the lease deposit ⇒ registration of the lease ⇒ business opening and follow-up services (business consulting, etc.)

Documents required for application : a prescribed form of application, a written business plan (that may be submitted or supplemented after the consulting for business startup preparations is given), a certified copy of residence register, a certified copy of property register (for both building and land), other documentary evidence (about completion of a business startup training course, business experiences or qualifications)

D. Business consulting services

The beneficiaries of the shop rent supports are offered free-of-charge professional advice by business consultants on 4 occasions ; once immediately before or after business opening and three times on later dates.

E. For more information, contact the KLWC regional headquarters or branch, or Ansan or Gwangju Rehabilitation Training Center.

5. Supports for rehabilitation sports

The supports for rehabilitation sports, which are to fund a reasonable level of sporting activity costs, are granted to those with disabilities, even after medical treatment, arising out of a work-related injury or disease, so as to assist them in increasing or restoring their work capacity and self-confidence, prevent secondary disabilities, and facilitate their successful adaptation to a working and social life.

A. Coverage of beneficiaries

Those aged below 60 who completed medical treatment for their work-related injury or sickness less than 6 months ago, have no paying job and have one or more of the following disabilities

- Disability in functions of one or more of the 3 major joints in arms or legs

- Deformity or disability in functioning or nerves of the spine

- Disability in muscles or nerves of arms or legs (including the arm or leg disability caused by damage on the brains or the spinal cord), which belongs to Disability Grade 12 or higher.

B. Coverage of sport types  : swimming, aquarobics, fitness, table tennis, aerobics, package program

C. Level of supports

The charges for use of sports facilities or tuition fees of sport lessons are funded within the limit of KRW 100,000 per month, up to 3 months.

The charges or tuition fees covered are directly paid to the service provider in advance, and the excess in the amount covered (KRW 100,000) shall be paid by the user.

D. Selection process

The application is made for supports of rehabilitation sport activities. ⇒ Upon application, the KLWC seeks the opinion of specialists to see if the applicant is qualified for the supports. ⇒ The KLWC makes a fact-finding examination on sports service providers and signs an agreement with the selected provider(s). ⇒ A final list of successful applicants is made. ⇒ The selection results are notified to the successful applicants.

E. For more information, contract the KLWC regional headquarters or branch office.

6. Supports for medical rehabilitation

The financial supports for medical rehabilitation are granted to medical institutions which accommodate long-term patients with progressive diseases, including pneumoconiosis, so that they can create or continue to carry out a program of hobby activities best suited to those in-patients that may help restore their emotional or psychological stability and contribute to increasing their adaptability to social life.

A. Coverage of medical institutions

Medical institutions that are primarily engaged in treating those with progressive work-related diseases (special work-related diseases) including pneumoconionis and have 10 or more in-patients a month

B. Level of supports

The expenses for materials and instructors are funded within the limit of KRW 35,000 per person (who takes part in 60% or more of a particular course) per month.

C. Duration of supports

From the month which contains the date when a particular in-patient joins a particular course to the month which contains the date when the particular in-patient withdraws from the particular course

D. Process of supports

Creation of recreational programs within the medical institution ⇒ Submission of a written report on creation of programs and a written contract of supports for medical rehabilitation ⇒ Operation of the programs ⇒ Application (by the medical institution) for the supports for medical rehabilitation (to the KLWC branch) ⇒ Payment of the expenses

E. For more information, contact the KLWC regional headquarters or branch office.

7. Social adaptability programs

Helping the injured adapt smoothly to the society and the vocation by trusting the following training to the professional institutions, aiming at physical, psychological, social independence of the injured workers

- social adaptability training in order to enhance self-management and adaptability to local community

- vocational adaptability training which is middle stage for the business startup

A. Commissioning

The KLWC commissions professional providers to carry out those programs

B. Coverage of beneficiaries

Those with physical disability of Grade 1 ～14

Those who are in out-patient medical treatment, or are under in-patient medical treatment that is expected to complete soon.

※ It is not allowed to take the same program again which is operated by the same provider.

C. Coverage of programs

Vocational counseling for the economic stability and vocational rehabilitation, job evaluation, vocational adaptability training, mediation of employment or business start-up, follow-up service, connection program with local community resources.

Social rehabilitation program in order to enhance ability for physical, psychological, social  independence and local community adaptability of the injured with severe disability.

Workplace adaptability program which is carried out by the employer, aiming at  the preparation of job conversion or return to the same work before the accident

D. Selection criteria and process

After receiving the proposal, KLWC have to evaluate it on the following items.

- Evaluation on the institutions submitting the proposal

- Managing ability, necessity, effectiveness on the program

- Appropriateness of amount of support

The process of evaluation can be divided into evaluation on the appropriateness, evaluation on the document, visiting the place, interview.

KLWC can establish the evaluation committee consisting of 5 members or less including public officials of the Labor Ministry, the professors, education training professionals, KLWC personnel, in order to raise the objectivity and fairness of evaluation.

The committee can adjust contents of program, budgets, if it is necessary to make  efficient achievement of the goal of program.

KLWC has to notify the proposed institution of the evaluation result.

E. Procedures of financing the programs

Prior approval (no later than 10 days before start of the program) ⇒ Payment of the program costs (80% in advance)  ⇒  Provider's report on the program outcome and actual costs (no later than 15 days from end of the program) ⇒ Payment settlement (the total of the covered costs is obtained by multiplying the number of participants (beneficiaries) by the cost incurred per person)

8. Medical treatment of aftereffects

A. Purpose

KLWC helps the injured concentrate on rehabilitation and return to the society, with working ability recovered and maintained, without anxiety about recurrence or exacerbation of the injury, by making him treated in a simple process, in case he needs further medical treatment for the prevention of aftereffects or has the pains due to the nature of injury or disability after he has been paid disability compensation,

B. Coverage of beneficiaries

Those who are beneficiaries of disability benefits and are in need of medical attendance on aftereffects of their work-related injury or disease

C. Types of aftereffects covered (17 types)

Spinal cord damage, syndromes after head injury or temperamental damage of the brains, chronic osteomyelitis, arthritis or resulting fracture, spinal cord damage, shoulder-arm-neck syndrome, external injury on the eyes, fracture or dislocation of coxa, femoral head or cervical region, artificial joints or artificial bone heads inserted, disabilities from urethral stricture, traumatic epilepsy, burns of degree 3 or resulting skin transplants, pneumoconiosis-related disabilities, disabilities in thoracic or abdominal organs, knee joint damage, aftereffects of damage on joints of arms․legs or feet, simple pains due to damage on body parts, and simple medical attention for repair and attachment of prosthetic devices

D. Process of medical treatment of aftereffects

The injured worker makes a written application for disability benefits. ⇒ KLWC, in reviewing eligibility of the applicant, checks if he needs later medical treatment for aftereffects. ⇒ KLWC issues a card for medical treatment of affects. ⇒ The beneficiary (holder of the card for medical treatment of affects) presents the card in the cases of affect treatment at a medical institution. ⇒ The medical institution makes a drug prescription. ⇒ The beneficiary presents the card at a pharmacist's for drug prescription. ⇒ The pharmacist claims the expense of prescription drugs from KLWC. ⇒ KLWC pays the expense.

E. Coverage of medical treatment

Medical examination, medical testing, medication, etc.

In principle, 'medical treatment' covered is confined to out-patient treatment. However, when medically necessary, short-term in-patient treatment may be covered.

9. Supports for renewal of prosthetic devices for rehabilitation

A. Purpose

Under this support scheme, the disabled workers who use prosthetic devices for rehabilitation purpose are offered new devices when their existing devices have exhausted the durable years, regardless of the their age at the time of the contingency or the part of body that suffer their disability caused by a work-related injury or sickness. This support scheme is intended to help people with disabilities return to their working and social life at an earlier date, by relieving them of the costs of purchasing prosthetic devices and helping them improve the use of their disabled body parts.

B. Coverage of beneficiaries

Those who received prosthetic devices - regardless of the number of times - while under medical treatment and, whose prosthetic devices has passed the endurance period after termination of medical treatment.

Those who, after completion of medical treatment, received the prosthetic devices as part of medical care benefits and whose devices have exhausted the durable years.

Those who get the objective recognition as persons needing prosthetic devices for the disability state as of the day medical treatment has been terminated.(Those who are acknowledged the fact by the written certification of 2 or more co-worker, attending doctor, employer that prosthetic devices are given to them, with permanent disability benefits paid on that body part.)

※ In case the maturity of durable years comes while the user is in additional compensable medical care, the user shall be offered new devices upon completion of additional medical care.

C. Application for renewal of prosthetic devices and decision

KLWC issues the aftercare card after decision of renewal when evaluating the degree of disability.(no application needed, except for those who received prosthetic devices before Dec. 29. 2001)

KLWC issues the aftercare card after decision of renewal when paying requested medical expenses for the initial prosthetic device to the injured who received permanent disability benefits(no application needed)

KLWC issues the aftercare card after decision of renewal when those who received prosthetic device before enforcement of this program(Dec. 29. 2001) submit application documents on issuance of aftercare care, with details of application specified, to KLWC branch offices which paid permanent disability benefits.

D. Providers of new devices

In principle, the free-of-charge new prosthetic devices for rehabilitation are available only at Korea Orthopedics & Rehabilitation Engineering Center in WAMCO.

- Rehabilitation engineering research institute will be paid the expenses concerning prosthetic devices from KLWC.

However, 10 kinds of devices, including shoes, wheelchairs, crutches, hearing aids, eyeglasses, contact lenses, artificial eyes, wigs, white walking sticks and artificial larynx, are available at nearby sellers.

- The expenses can be claimed with application document on aftercare expenses to KLWC branch offices which paid permanent disability benefits.

※ Prosthetic devices except for 10 kinds of devices available at nearby sellers should be supplied from Rehabilitation engineering research institute only.

E. Medical facilities in charge of simple surgical treatment for the reparation or fitting of prosthetic devices

In principle, only Rehabilitation engineering research institute under WAMCO which claims the expenses, can make a surgical treatment.

Exceptionally, it is possible to be treated or repair devices at the medical facilities(including prosthetic device seller) near to residence, only when it is acknowledgedly difficult to do at WAMCO due to the inevitable  reasons considering distance, traffic.

- The expenses can be claimed with application document on aftercare expenses to KLWC branch offices which paid permanent disability benefits.

F. Fmore information, contact the KLWC regional headquarters or branch, or Korea Orthopedics & Rehabilitation Center at 032-5000-592.

10. Supports for return-to-work of the disabled with benefits paid

Aiming at systematic supports for reemployment of the disabled having difficulties with return-to-work due to their disabilities, KLWC pays the incentives to employer who employs the disabled for more than 1 year.

※ The disabled with benefits paid are those whose disability grades are grade 9 or higher(severer).

A. Eligible

In case of return-to-the same workplace : Employer who employs the disabled whose disability grades are grade 1 between grade 9, for more than 1 year from the day medical treatment terminated.

In case of return-to-the different workplace : Employer who employs the disabled whose disability grades are grade 1 between grade 9, within 1 year from the day medical treatment terminated and keeps employment for more than 1 year from the day they are employed. (including the case the disabled are retired and then reemployed at the same workplace)

B. Amount(Announced by Labor Minister)

From disability grade 1 to 3 : KRW 639,900 per month

From disability grade 4 to 9 : KRW 426,600 per month

C. Exception

In case employer should employ the disabled according to “Employment promotion and vocational rehabilitation law for the disabled"(employing 50 or more regular workers)

In case employee who is included in the number of the disabled when calculating employment incentives according to “Employment promotion and vocational rehabilitation law for the disabled"(employee excluded from the number of the disabled can be payable)

In case employer is already paid with regard to employment of the disabled according to other laws

In case employer make the disabled change their jobs with a view to being paid the money

D. Period of payment : Maximum 12 months

12 months the reason of wage payment occurred, from the day employer employs the disabled

E. Application

Application can be made to KLWC branch offices having jurisdiction over workplace or main office, from the next day after 1 year from employment of the disabled.

F. Restriction on payment

In case employer does not pay the contribution or the disabled worker's wage, payment will be suspended.

G. Miscellaneous

In case employer using 50 or more and less than 300 employees employs the disabled newly or makes the disabled returned to work after Jul. 1. 2003, and maintains employment for more than 1 year, the amount of money between Jul. 1. 2003 and Jan. 28. 2004 can be paid.

F. For more information, contact the KLWC regional headquarters or branch

Section 2. Worker Welfare Programs

1. Scholarship program for injured workers and their children

A. Coverage of beneficiaries

A spouse or a child of a person who died of a work-related accident, a beneficiary himself or a spouse or a child of a beneficiary of severe disease compensation annuity, a person himself or a spouse or a child of a person with disabilities of Grade 1～7 caused by a work-related accident, all as of the date of application

① Who is enrolled or is to be enrolled with a high school that is accredited by the Minister of Education

② Who is in training at a public vocational training institution as defined in Article 2 of the Vocational Training Promotion Act.

B. Level of scholarship amounts

For high school students : All the regular expenses for schooling, including admission fees, tuitions and school support fees, are covered on a yearly basis.

For public vocational trainees : All the expenses charged to the trainees (for the room and meals) are covered.

C. Period of entitlement

From the time the applicant is selected as a scholarship recipient to the time of graduation, as the case may be, from the high school or the training institution

D. Payment method : The scholarship amount is directly paid to the corresponding school via its bank account.

E. Application for scholarship

Application period : A period of time specified for each year (within January)

Blank application forms are available at each Labor Welfare Division of KLWC regional headquarters and branch offices, and filled-out forms are to be submitted to the Division.

Documents required for application : A prescribed form for application, a certified copy of resident register, and a certified copy of family register (only in cases of surviving children)

F. Selection criteria

Determination of the number of beneficiaries : The number of new beneficiaries is determined within the limit of financial resources for the scholarship program.

Priorities

- 1st priority : the injured worker

- 2nd priority : the surviving child who is from a first-time applicant family

- 3rd priority : the child of a person with a high grade of disability or invalidity who is a first-time applicant of the scholarship

- 4th priority : the spouse of a person with a high grade of disability or invalidity who is a first-time applicant of the scholarship

※ The details of this scholarship program are subject to changes in financial resources and the program planning on a yearly basis.

2. Loans for college education of injured workers and their children

A. Coverage of beneficiaries

A spouse or child of a person who died of a work-related accident, a beneficiary himself or a spouse or a child of a beneficiary of severe disease compensation annuity, a person himself or a spouse or a child of a person with disabilities of Grade 1～9 caused by a work-related accident, who attend a college as of the date of application

B. Coverage of colleges

Colleges as defined in Article 2 of the Higher Education Act (including universities, colleges of education, junior colleges, broadcasting colleges, tele-schooling colleges, broadcasting and tele-schooling colleges, colleges of technology, colleges of industries, etc.)

C. Conditions to loans

Loan amount ： all of the college tuition of each semester per person (less than KRW 100,000 is not counted)

Loan period

- Grace period : From the loan-taking date to the year immediately following graduation (in a normal way) from the college (the interest rate for this period is annual 1% and the period is extensible, in cases of military service, by duration of such service)

- Repayment period ： 4 years (at annual 3% and in equal installments of the principal)

D. Application for loans

Period of application : Applications are made at any time of the year until the loan resources are exhausted.

Blank application forms are available at each Labor Welfare Division of KLWC regional headquarters and branch offices, and filled-out forms are to be submitted to the Division.

Documents required for loan application : a prescribed form of application, a receipt (or a bill) of college tuition, and a certified copy of resident register

※ The details of the loan program are subject to changes in financial resources and the program planning on a yearly basis.

3. Loans for a stable living of injured workers

A. Coverage of beneficiaries

A surviving dependent of a person who died of a work-related accident, a beneficiary of severe disease compensation annuity, a person with disabilities of Grade 1～9 caused by a work-related accident, all as of the date of application

Special loans are offered to those with physical disabilities recognized who graduated from the 1-year rehabilitation training course or are recommended as a loan recipient by the Rehabilitation Training Center in Ansan or Gwangju.

B. Conditions to loans

Loan types and per capita maximum : KRW 5 million (credit loan)

Interest rate : annual 3%

Loan period : up to 10 years

Repayment method : in 5-year equal installments after a 5-year grace period

C. Application for loans

Application period : three times a year (in February, June and October), In selecting loan recipients, the limited resources and selection priorities of individual applicants are taken into consideration.

Blank application forms are available at each Labor Welfare Division of KLWC regional headquarters and branch offices and filled-out forms are to be submitted to the Division.

Documents required for application

- Required for all : a prescribed form of application, a certificate of property (non-) taxation, and a certified copy of resident register

- For business : a copy of business registration

- For housing : a certified copy of building register, a copy of written contract on house purchase or leasing

※ The details of the loan program are subject to changes in financial resources and the program planning on a yearly basis.

4. Family programs

A. Winter Youth Camp

Participants : 150 scholarship students among injured workers' children attending the middle or high school

Time : during winter vacation (in January or February)

B. Summer Youth Camp

Participants : 150 scholarship students among injured workers' children attending the middle or high school

Time: during summer vacation (in July or August)

Frequently Asked Questions on Application and Collection

Appendix A : FAQs on application & collection

Appendix A : FAQs on application & collection

Q) Which business will participate in the IACI and what about the procedures to report?

A) Any business employing one or more workers (an owner of a business not included) and a construction project costing 20 million Won or more must participate in the IACI. An owner of such business must submit the reporting paper on formation of the insurance relations to the competent regional KLWC office of his/her business within 14 days from the first day he/she employs one or more workers (from the day of ground-breaking, in cases of a construction project).

Contribution of the IACI must be reported and paid within March. 31.(70 days from the day on which the insurance relation come into existence, if the insurance relation come into existence in the insurance year) to the KLWC at commercial banks or post offices. Depending on the time when the insurance relations are formed, payment in installments up to four times is possible.

The contribution of a business is calculated through multiplying the total wage amount by contribution rate which ranges from 4/1,000 to 489/1,000, depending on risk level of a business.

In order to improve conveniences in reporting on insurance participation and payment, the KLWC simplified reporting documents to the maximum extent and has received documents on the Internet and telephone. Now, the insured can pay insurance contribution wherever they are, using their credit card and electronic payment system.

Q) What about the scope of workers covered by the IACI?

A) Workers defined by the Labor Standards Act including temporaries and part-timers will be covered by the IACI.

Q) What is the difference between 'reporting extinguishment of the IACI' and 'application for extinguishment of the IACI'?

A) 'Reporting on extinguishment of the IACI' means reporting by an owner of an insured business to the KLWC to end the insurance relations in cases of discontinuation or closing of the business, or in cases where one year has passed since the first day the owner came to employ no worker.

'Application for extinguishment of the IACI' means application to the KLWC by an insured owner of a business belonging to the non-mandatory participation category to terminate the insurance relations after an insuring year when the insurance relations formed ends.

The IACI will be extinguished on following days:

- The day after a business is closed or discontinued.

- The day after one year from the first day when an owner does not employ any worker.

- The day after the KLWC approved an application for termination of the insurance relations of a business not employing a worker

- The day after the KLWC notified the decision on 'extinguishment by authority'

- The day after a construction project ends

Q) What benefits can a worker of a business participating in the IACI have in cases of work-related accident?

A) The IACI provides Medical Care Benefits, Temporary Disability Benefits, Severe Disease Compensation Annuity, Permanent Disability Benefits, and Nursing Benefits as a compensation for accidents and diseases related with work. If a worker of a business participating in the IACI dies in an work-related accident, his/her surviving family will be provided with the Benefits for the Survivors and Funeral Expenses.

Q) Is there any disadvantage in cases of not participating in the IACI?

A) If an owner of a business subject to the mandatory participation category is not participating within time limit, he/she will have various disadvantages.

If he/she reports participation after the time limit passed and an accident took place, collection of insurance benefits provided for the accident from the insured will be imposed on him/her. The collection of insurance benefits will amount to 50% of the compensation.

If an owner of an insured business pays contribution after the time limit, 1.2% arrearages per month will be imposed on him/her until the day he/she paid the contribution. And 10% additional dues will be imposed on an owner of an insured business who did not report the final contribution until time limit.

Inquires about participation and accident compensation will be received at 1588-0075 (the KLWC) or www.WELCO.or.kr.

Q) What are the requirements for the Mandatory Participation Category of privately operated construction projects ?

A) A privately operated construction project costing 20 million Won or more in total, and covering the floor area of more than 330 square meters, will be subject to the Mandatory Participation Category.

Q) On what basis is the contribution of a privately operated construction project calculated ?

A) As the particulars of construction costs of a privately operated construction project are usually not clear, nor lacking in objectiveness, the insurance contribution of a privately operated construction project is calculated on the basis of 'Standards to Calculate Costs of Privately Operated Construction Projects' announced by Labor Minister.

Q) How about the time limit for privately operated construction projects to report and pay insurance contribution ?

A) A privately operated construction project meeting the requirements for participation in the IACI must participate in the IACI within 14 days after starting the project, and report and pay the insurance contribution within 70 days after starting the project.

Q) What are the requirements for application of a construction project?

A)	All construction projects undertaken by a person with a construction license will be subject to the Mandatory Participation Category, while those conducted by a person without a construction license has to meet the requirement of spanning 330㎡ or more and costing KRW 20 million or more to be categorized as mandatory participation.

Q) What does it mean by 'construction costs'?

A) Construction costs mean the total amount of money specified in the contract for a construction project. The costs of materials provided by the party who placed an order will be included in the total amount but the value added tax will be exempted.

Q) Who is responsible for reporting and paying insurance contribution for a construction project?

A) In terms of a construction project, the first subcontractor who received an order from a contractor will be responsible for reporting and paying insurance contribution. The insurance contribution will be calculated through multiplying labor costs out of the total costs by the insurance contribution rate. If it is difficult to calculate labor costs, the labor cost rate announced by Labor Minister will be used.

Q) When is the deadline for reporting and paying the insurance contribution?

A) A subcontractor will report the insurance relations to the competent KLWC office of the region where the project is conducted within 14 days after starting of a construction project, and report and pay the estimated insurance contribution calculated as specified above within 70 days after starting of a construction project. When a construction project ends, the subcontractor will report extinguishment of the insurance relations within 14 days after ending the project, and report and pay the final insurance contribution calculated based on the actually paid labor costs within 30 days after ending of a construction project.

Q) What are the procedures to pay the insurance contribution?

A) The insured can pay the contribution at the bank after receiving a statement of payment, electronically through credit cards or on the Internet banking. The electronic network for one-stop services for the Employment Insurance and the IACI is available since Jan. 30, 2004.

Q) When is the deadline for the insurance contribution?

A) An owner of a company participating in the IACI has to report and pay the estimated insurance contribution calculated through multiplying the estimated total amount of wages by the insurance contribution rate, in addition to the final insurance contribution calculated through multiplying total amount of wages already paid in the previous year by the insurance contribution rate, within Mar. 31.

Q) What disadvantages will an owner participating in the IACI have in cases of not paying the insurance contribution?

A) If an owner does not pay the final insurance contribution within the deadline stated by law, he/she has to pay fines amounting to 10% of the final insurance contribution. If an owner does not pay the estimated and final insurance contribution within the deadline stated by law, 12/1,000 of the unpaid contribution will be imposed as arrearage on him/her every three months for up to 36 months since the deadline.

Q) Are there any more disadvantages than additional dues or arrearage in cases of an owner's non-payment of the insurance contribution?

A) If an employee of an owner with contribution in arrears was injured at work and received benefits, 10% of the benefits provided to the employee may be imposed as fines on the owner.

Q) What disadvantages will have an employee if his/her owner does not pay the IACI contribution?

A) As an owner has an obligation to report and pay the insurance contribution, an employee will not have any disadvantages for owner's not meeting the obligation. Therefore, an employee who has occupational injury or disease may receive a compensation, regardless of non-payment of his/her employer for contribution.

Q) How is the contribution decided?

A) The IACI contribution is categorized by industry and decided every year through the Ordinance of the Ministry of Labor in consideration of the ratio of the total amount of insurance benefits to the total amount of wages for the past three years from Sep.30, the amount spent for insurance benefits including pension, and costs spent for prevention of occupational diseases and injury and promotion of workers' welfare.

Q) How about the insurance contribution rates for 2005?

A) IACI contribution rates for 2005 are categorized by 61 industries based on the risk of accidents and homogeneity of economic activities. The logging industry has the highest contribution rate (489/1,000). The finance and insurance, the computer operation and the legal & accounting services, health and social welfare services have the lowest (4/1,000).

Frequently Asked Questions on Benefits and Rehabilitation

Appendix B : FAQs on benefits & rehabilitation

Appendix B : FAQs on benefits & rehabilitation

Q) When an accident occurs at workplace or in the course of employment, what procedures should be gone through to get IACI benefits?

A) When an employee contracts a disease or sustains an injury that is related to his work and requires 4 days or longer of medical care, he should apply for approval of compensable medical treatment to the branch office of Korea Labor Welfare Corporation. The application form for initial medical care should be submitted to the KLWC branch office having jurisdiction over his employer. In case the occupational accident takes place at a construction site, the application form should be handed in to the KLWC branch office with jurisdiction over the construction site. The blank application form is available at a KLWC branch office or a KLWC-accredited medical institution or can be downloaded at the KLWC website (www.welco.or.kr)

Q) When an employee with work-related injury or sickness finds it necessary to get medical treatment for a longer period than initially approved, what should be done to extend the period of compensable medical care?

A) If the employer needs medical treatment for a longer period than was approved by the KLWC upon his first application, he should make an written application for extension of medical treatment, along with a written medical opinion of his attending doctor, to the KLWC branch office having jurisdiction over the medical institution where he is under medical treatment. The KLWC branch office, upon receiving the application, reviews the enclosed medical opinion and decides on whether to approve the extension.

Q) In case an injured employee who are currently under medical treatment wants to change the medical care provider because it is too far from his residence, what should be done?

A) He should submit an application for change of the medical care provider, along with a written opinion of his attending doctor at the medical institution where he is now under medical treatment, to the KLWC branch office having jurisdiction over the current medical institution. The KLWC branch office, upon receiving the application, decides whether to approve the change after considering conditions of his injury or sickness, his residence and appropriateness of the institution that he wants to transfer to.

Q) Is it possible to resume compensable medical treatment after the initial treatment is completed for a work-related injury or sickness?

A) Even after the first-time compensable medical treatment is completed, the employee concerned may apply for a second round of medical treatment at the expense of the IACI fund so long as it is medically proven that his work-related injury or disease has flared up or gotten worse than at the end of the first-time treatment and that it is necessary to provide additional medical care. On the part of the injured employee, he should fill out a prescribed form of application for additional compensable medical treatment signed by his employer and submit it, along with a written medical opinion of his attending doctor, to the KLWC branch office having jurisdiction over his employer or the medical institution where his first-time medical treatment was completed. The KLWC, upon receiving the application, decides on whether to approve additional medical care after making a medical review to see if there is any correlation between the initial injury or sickness and the later injury or sickness, and if there is a significant possibility that additional medical care will result in better conditions.

Q) When an employee with a work-related injury or disease is pronounced as having another work-related injury or disease while he is under medical treatment, is the newly-found injury or disease also compensable under the IACI fund?

A) Such injury or sickness as is newly found while the insured employee is under medical treatment is called an additional injury or sickness, which is compensable only when it is medically proven that it is closely related to the initial accident or the initial injury or sickness. In order to get the additional injury or sickness recognized as compensable, the employee should submit a prescribed form of application for extended medical care, along with a written medical opinion of his attending doctor, to the KLWC branch office having jurisdiction over the medical institution where he is under treatment. The KLWC, upon receiving the application, reviews the medical opinion and decides on whether to approve the extension of compensable medical treatment.

Q) How is average wage computed?

A) Average wage is obtained by dividing the total amount of wages paid to the employee for the 3 months preceding the date of occurrence of the need to compute average wage (usually referred to as "the date of occurrence of occupational accident") by the total number of days in the 3 months.

Q) In computing average wage, is the family allowance counted?

A) In case family allowance is given equally to all employees, regardless of their marital status, it can be counted in calculating average wage. However, when family allowance is paid only to employees with dependents and is in proportion to the number of dependents, it should be regarded as an employee benefit that is not related to the quality or quantity of the work provided. Therefore, in the later case, family allowance is not a countable element.

Q) When is the disability grade determined and the permanent disability benefits paid ?

A) The permanent disability benefits are offered to an insured employee who, after completing medical treatment for his work-related injury or disease, has a physical disability caused by such injury or disease. Accordingly, the disability benefits are paid once the medical treatment is finished. "Completion of medical treatment" means that it is not likely that medical treatment will give effects any more. In case the work-related injury or disease results in physical disability, the employee should make an application for permanent disability compensation to the KLWC branch office having jurisdiction over his employer or the medical institution where his medical treatment was completed. The KLWC branch office, upon receiving the application, determines a disability grade of the applicant and pays the permanent disability benefits based on the grade.

Q) In what cases are the nursing benefits offered?

A) The nursing benefits, which are effective as of July 1 2000, are intended to cover nursing expenses of the insured employee whose work-related injury or sickness requires continuous medical nursing even after completion of medical treatment. The nursing benefits are divided into constant nursing benefits and occasional nursing benefits, which are given depending on the status of the injury or sickness. The benefits were first made available to those who were under medical treatment as of July 1 2000. If the employee submits an application for nursing benefits, the KLWC branch office, upon receiving the application, checks if the applicant is qualified for the benefits.

In case a beneficiary of the nursing benefits resides at a shelter for people with disabilities, a free-of-charge institution or a house for old people and pays a nursing expense less than the given amount of nursing benefits, he is offered only the amount equivalent to the actual expense paid.

Q) In what cases is the severe disease compensation annuity offered?

A) The severe disease compensation annuity is offered, in lieu of temporary disability benefits, to an insured employee who has not recovered from his work-related injury or disease after 2 years of compensable medical care and is rated at invalidity of Grade 1～3. When an insured employee wants to get the severe disease compensation annuity, he should make an application for the annuity to the KLWC branch office. If the applicant is found qualified for the annuity and the degree of his invalidity is determined, the severe disease compensation annuity is paid, starting from the month after month the date of determination of the invalidity grade falls on.

Q) To whom and in what cases is the return-to-work subsidy available, and what is the level of the subsidy amounts?

A) The return-to-work subsidy is granted to an employer who has a worker with disabilities of Grade 1～9, after completion of his medical treatment, re-employed at the same position as before for 1 year or longer, or an employer who newly hires such worker, within 1 year from completion of medical treatment and retains him for 1 year or longer. The subsidy amount, which is paid for 1 year, is KRW 639,900 per worker per month in cases of employment of those of Grade 1～3, and KRW 426,600 per worker per month in cases of employment of those of Grade 4～9. This subsidy scheme takes effect on July 1 2004.

Q) Is it possible for an insured worker who completed compensable medical treatment before July 1 2000 when the scheme of medical treatment of aftereffects took effect, to receive compensable medical treatment under the scheme?

A) Yes, if only he meets qualifying requirements of the scheme.

Q) Who are covered under the supports for rehabilitation sports?

A) The prospective beneficiaries are those aged below 60 who completed medical treatment for their work-related injury or sickness less than 6 months ago, have no paying job as of the date of application for supports and have one or more of the following disabilities

- Disability in functions of one or more of the 3 major joints in arms or legs

- Deformity or disability in functions or nerves of the spine

- Disability in muscles or nerves of arms or legs (including the arm or leg disability caused by damage on brains or the spinal cord), which belongs to Disability Grade 12 or higher.

Q) How long is the subsidy for shop rental available?

A) The subsidy is available for up to 5 years, based on the 1-year or 2-year leasing contract.

Q) What is the level of the supports for vocational training expenses?

A) When an insured person with disabilities takes a vocational training course at a private training center near his residence, up to KRW 1.3 million is directly paid to the training provider to cover tuition fees and other training expenses. At the same time, the trainee is offered monthly training allowance at a given rate (70% of the minimum wage rate set by the Labor Minister) that is intended to cover living costs while he is in training. In addition, in case he is to return to work within 6 months from graduation from the training course, he is offered KRW 150,000 in allowance for return-to-work preparation.

Industrial Accident Prevention Program

Appendix C : Industrial Accident Prevention Program

Appendix C : Industrial Accident Prevention Program

1. Korea Occupational Safety and Health Agency

◦ Purpose : To contribute to the development of national economy through providing a safe and comfortable working environment for workers and promoting employers to actively conduct accident prevention activities, by implementing various industrial accident prevention activities.

◦ Authority : Established under the authority of the Korea Occupational Safety & Health Agency Act(Law No. 3931) promulgated on May 30, 1987.

2. Major Functions

◦ Research, development and dissemination of occupational accident prevention Techniques

◦ Technical assistance for occupational accident prevention at workplaces

◦ Organization and management of standards Establishment Committee by field

◦ Safety and Health evaluation in case of approval of subcontract of harmful or hazardous work.

◦ Functional inspection of protective equipment for harmful or hazardous machines, instruments, etc.

◦ Design, Completion, Function and Periodic Inspection of harmful or hazardous machines, instruments and facilities

◦ Test of personal protective equipment

◦ Vicarious implementation of self-inspection of harmful or hazardous facilities

◦ Examination and confirmation of Harmfulness and Hazard Prevention Plan

◦ Examination and confirmation of process safety management report

◦ Technical assistance Safety and health inspection and check of workplaces

◦ Financial assistance for occupational accident prevention facilities

◦ Installation and operation of occupational accident prevention facilities

◦ Occupational safety and health training

◦ Development of Publication materials and audio-visual media

◦ Promotion of Accident-Free Campaign

◦ Public relations for occupational accident prevention

◦ Safety Culture Promotion

◦ Compilation, publication and dissemination of materials necessary for the occupational safety and health

◦ International cooperation among safety and health professional organizations

◦ Business entrusted by the Ministry of Labour or by the heads of other central government agencies