Tongyeong City Confirms 350,000 Won Payment: The Complex Calculus Behind Local Governments' 'Cash Handouts' Before Chuseok

Tongyeong City, South Gyeongsang Province, has decided to provide 350,000 won in cash per person to all its citizens. With the Tongyeong City Council finalizing the relevant budget on August 14, 2026, payments will begin on August 31. This has sparked a fierce clash between the expectations of residents whose wallets have become thinner ahead of Chuseok, and criticisms of populism aimed at winning public favor. We traced the real story behind Tongyeong City's decision to empty its emergency funds and the background of this unusual cash-handout competition that has spread to local governments across the country.

Who, When, and How to Receive? A User Guide to the 350,000 Won Tongyeong-style Subsidy

The recipients of this 'Tongyeong-style Livelihood Recovery Subsidy' are the 116,353 people who have been registered as residents in Tongyeong and have lived there continuously as of April 15, 2026. This includes 488 foreigners, such as marriage migrants and permanent residents who meet the requirements. The support amount was finalized at 350,000 won, a 20,000 won increase from the initially discussed 330,000 won, following discussions between the city and the city council.

Applications will be open for two months, from August 31 to October 30. During the first week, both online and offline applications will follow a 'five-day rotation system' based on the last digit of the applicant's birth year to prevent congestion at service centers.

After the first week, anyone can apply regardless of birth year. Citizens comfortable using smartphones can choose the mobile 'Tongyeong Love Gift Certificate' online. For those unfamiliar with mobile payments or the elderly, they can visit their local administrative welfare center to receive a prepaid card.

The subsidy must be used in full within Tongyeong by December 31, the last day of this year. Any remaining balance after the deadline will expire and be returned to the local government, so please be aware. As the clear goals are to promote regional economic circulation and increase sales for small businesses, usage is strictly limited. Payments can only be made at small business merchants in Tongyeong with annual revenue of 3 billion won or less. It cannot be used at large supermarkets, department stores, adult entertainment establishments, duty-free shops, or online shopping malls. It is recommended to check in advance which local merchants, such as neighborhood markets, traditional markets, hospitals, pharmacies, and hair salons, accept the payment so you can use it wisely.

Where Did the Funding Come From? Tongyeong Dips Into Its Emergency Funds

Tongyeong City has newly allocated approximately 40.9 billion won to provide 350,000 won to every citizen. While it might sound like 'not that much' at first glance, looking at the city's actual financial situation reveals it is a heavy burden. As of the end of 2025, Tongyeong's financial independence rate was only 13.1%, and it remains at 13.6% based on the 2026 initial budget. It is one of the lowest among city-level local governments in South Gyeongsang Province, relying heavily on the central government or provincial support. Given such a thin budget, it is logically nearly impossible to come up with over 40 billion won in cash at once.

To secure these seemingly impossible funds, Tongyeong City chose to break into the 'Integrated Financial Stabilization Fund,' which acts as a local government's emergency reserve. Tongyeong took 34.9 billion won from this emergency fund, with the remaining 6 billion won sourced from general funds. Since the city's balance in that fund was about 76.6 billion won, they effectively poured nearly 45% of their total emergency reserve into a single cash handout.

The Integrated Financial Stabilization Fund is money saved over years to be used during unexpected crises, such as large-scale disasters or severe economic downturns. Because of this, voices of concern have emerged from local society and civic groups. The argument is that by cutting the emergency fund in half for a one-time payment, the city is left without the ability to cope if a truly uncontrollable disaster occurs, and long-term regional development or key infrastructure projects could grind to a halt. This is why criticism is mounting that they are 'forcibly bending the rules for emergency fund usage under the pretense of short-term consumption stimulus to push populist policies.'

Selling Land for Cash? The Pre-Chuseok Battle Among Local Governments

Tongyeong is not the only local government opening its wallet. Ahead of the Chuseok holiday, local governments across the country are competing to pour out cash-like subsidies. Uiryeong-gun in South Gyeongsang Province and Hampyeong-gun in South Jeolla Province have ignited the competition by deciding to provide up to 500,000 won per person.

The problem is that their coffers are far from flush. Uiryeong-gun's financial independence rate is only 8.3%. They are effectively handing out billions of won in cash while unable to even cover 10% of their own expenses with their tax revenue. The situation in Buan-gun, North Jeolla Province, is even more extreme. To secure the 30 billion won for their subsidy, Buan-gun decided to sell off 20 billion won worth of public land, triggering intense backlash. It looks like they are selling the region's valuable land meant for the future to pay for immediate cash handouts.

Naturally, this is not being viewed favorably. Especially since this is the first holiday since the local elections in June, there is sharp criticism that this is election-return populism aimed at winning over voters. The growing fear is that while they are trying to look generous with taxpayers' money, they are ultimately eroding the long-term fiscal health of local governments.

Warmth in the Alleys, Emptier Coffers: The Real Test Comes After Chuseok

The cash being released ahead of the Chuseok peak season will likely inject immediate vitality into local alleyway businesses. In the case of Tongyeong, they have limited the use of mobile gift certificates and prepaid cards to local small business shops until December 31, planning to secure a short-term consumption stimulus effect.

However, there is deep concern about whether the method of emptying emergency funds to provide cash is sustainable. This competition for populist handouts after an election could end up being poison that wears away the core physical strength of local finances.

In reality, not all local governments have joined this trend. In some areas, such as Dangjin in South Chungcheong Province and Gangneung in Gangwon Province, city councils have stepped in to put the brakes on related subsidy plans, fearing budget depletion. With councils exercising strong checks to prevent populist budget planning, it remains unclear whether these regional subsidy plans will stop here or reach a dramatic compromise before Chuseok.

While policies filling the residents' thinner wallets are sweet, the fact remains that the funding is ultimately debt that residents will have to bear in the future. This is why we must keep a close eye on the real state of local coffers after the Chuseok holiday to see what report cards local governments receive regarding the balance between short-term livelihood stabilization and long-term fiscal soundness.

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