South Korea will allow regulators to revoke the licenses of social service providers caught filing false claims for electronic voucher payments twice, under tougher penalties that also raise fines to as much as five times the fraudulently claimed amount. At the payment stage, the government will cross-check the locations of service users and care workers to block abuse.
The Ministry of Health and Welfare announced the measures, titled a plan to strengthen management of fraudulent claims in the social service electronic voucher program, on the 15th. The program subsidizes the cost of care and rehabilitation services, including personal assistance for people with disabilities and developmental rehabilitation. Users pay with an issued card, and provider institutions receive the corresponding amount.
The government will sharply raise the level of sanctions for fraudulent claims. Providers caught filing false claims twice can now have their licenses revoked, a step that previously required three violations. The window for determining whether a violation is a repeat offense will also be extended to five years from two. That means an institution sanctioned for a false claim three years ago can be treated as a repeat violator if caught again. The calculation standard for fines will be changed to allow penalties of up to five times the fraudulently claimed amount. The ministry plans to revise the relevant presidential decree and other rules by the end of the year.
The government will also close loopholes in the payment process. By next year, it will develop a function in the electronic voucher app that compares the locations of users and care workers. If the two are in different places, payment will be withheld. Payment methods requiring user approval, such as QR codes and fingerprint authentication, will be expanded to all 13 programs. The aim is to prevent institutions from holding physical cards and making payments at their own discretion. The ministry will also upgrade its artificial intelligence-based fraud detection system (FDS).
The government is tightening oversight because the scale of fraudulent claims is rising steeply. The amount detected last year was 47.88 billion won, 6.5 times the 7.34 billion won recorded in 2021. The number of cases detected also rose 3.7-fold over four years, to 941,905 from 252,490. That far outpaced the 73.3% increase in the voucher program's budget over the same period.
The method accounting for the largest detected amount involved provider institutions keeping users' cards and making payments at their own discretion. Cases of this type alone totaled 14.61 billion won last year. Claims filed for services that were never provided came to 6.32 billion won. The ministry attributes the increase in misconduct to the difficulty of verifying whether home-visit services were actually used, compounded by a shortage of field inspection staff.