Home » News » How Industrial Accident Insurance Fraud is Costing Billions in South Korea: Ministry of Employment and Labor Audit Reveals Shocking Cases

How Industrial Accident Insurance Fraud is Costing Billions in South Korea: Ministry of Employment and Labor Audit Reveals Shocking Cases

Person A, who works at a hospital, fell and was injured at home. However, she asked the hospital staff to write a medical certificate saying, ‘She fell in the office.’ In the end, although Ms. A was not injured at work, she received 50 million won in compensation for industrial accidents. Mr. B was diagnosed as paralyzed from the waist down due to a fall accident and has been receiving industrial accident compensation for over 15 years. However, after receiving a report that Mr. B usually walks alone, the government reinvestigated, and it was found that he could walk and squat without a wheelchair. In this way, a large number of so-called ‘naylong patients’ who had nothing to do with industrial accidents or exaggerated the extent of their injuries were caught.

According to the Ministry of Employment and Labor on the 20th, in the audit of ‘Industrial Accident Insurance Fraudulent Supply and Demand’ conducted from the 1st of last month, investigations into 178 out of 320 suspected cases were completed and 117 cases of illegal supply and demand were discovered. The amount of illegal benefits discovered by the government amounts to 6.031 billion won. The Ministry of Labor began the audit after a series of criticisms were made during this year’s government audit that insurance funds were leaking due to the large number of illegal recipients of industrial accidents.

A representative example of fraud is making it up as an industrial accident even though it is not. Mr. C, who delivers a motorcycle, received 10 million won after claiming that he had an accident while working as a delivery worker. In reality, he was drunk and was driving his motorcycle when he fell due to his own negligence. There are many cases of people taking advantage of the fact that compensation for industrial accidents varies depending on the level of disability. He is said to be unable to move his limbs and has been hospitalized for a long time in a nursing hospital, but he is said to be able to move on his own as long as there are no eyes watching him.

There have also been cases of people working under someone else’s name and collecting wages while claiming to have suffered an industrial accident and receiving temporary pay. Mr. D, who works as a delivery worker, received 4 million won in lost pay due to a sprain in his shoulder joint after falling while riding a motorcycle. However, even during his convalescence, he continued to work as a delivery worker and even received wages under someone else’s name.

In this audit, the Ministry of Employment and Labor confirmed that 47.6% of all patients received nursing care benefits for more than six months. 29.5% of patients stayed for more than 1 year. The Korea Workers’ Compensation and Welfare Service, which provides insurance benefits, announced that it approved 99% of requests to extend the treatment period when reviewing industrial accidents. The government ordered the Korea Workers’ Compensation and Welfare Service to reexamine treatment plans submitted by long-term care patients. Then, a decision was made to terminate treatment for 419 out of 1,539 people.

The government plans to take measures such as collecting unjust profits, readjusting disability ratings, and filing criminal charges against cases of illegal receipt of benefits. The audit, originally scheduled for November 30, has been extended by a month and will be held until the end of this month. After the audit, we plan to form a system improvement task force (TF) in which experts participate to improve structural problems in the system. Minister of Labor Lee Jeong-sik said, “Illegal supply and demand for industrial accidents and insufficient systems will lead to the deterioration of the fund’s financial soundness and ultimately become a burden on future generations,” and added, “We will thoroughly investigate and uncover the absurdities related to compensation for industrial accidents, including illegal supply and demand.”

2023-12-20 14:08:40
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