SEOUL-- The government on Wednesday decided to raise the rate of workers' employment insurance next year as the state employment insurance fund is on the verge of being depleted amid the prolonged coronavirus pandemic.

The labor ministry's employment insurance fund committee held a meeting and ratified the decision to raise the current rate of 1.6 percent to 1.8 percent in July 2022.

Workers and employers will each bear the added 0.1 percentage-point costs in the planned increase, the ministry said.

The planned hike would mark the first rate increase in 33 months since October 2019, when the rate was jacked up from 1.3 percent to 1.6 percent.

The decision was reached over concerns of the fund facing depletion by the end of the year.

The fund has recorded annual decreases since 2017 and is expected to fall to 4.7 trillion won (US$4.62 billion) on paper by the end of the year, and, in substance, a deficit of 3.2 trillion won when not taking into account the borrowed 7.9 trillion won poured into the reserve.

The exhaustion in funds is mainly due to the government's increased expenditures in unemployment benefits, both in terms of the handout volume and period, due to increased layoffs during the coronavirus pandemic. The size of unemployment allowances in 2020 surged to 12.2 trillion won, soaring 45.3 percent from a year ago.

Separate from the rate hike, the government also plans to inject an additional 1.3 trillion won from state coffers to ensure the sustainability of the employment insurance fund down the road.

Source: Yonhap News Agency