Social Security Programs Throughout the World: Asia and the Pacific, 2012

 

Japan

Exchange rate: US$1.00 = 82.06 yen.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1941 (employees' pension insurance).

Current laws: 1954 (employees' pension insurance) and 1959 (national pension).

Type of program: Social insurance system.

Note: The social insurance system consists of a flat-rate benefit under the national pension program (NP) and an earnings-related benefit under the employees' pension insurance program (EPI). Employers with more than 1,000 employees may contract out a portion of the EPI if they provide more generous benefits.

Coverage

National pension program: Residents aged 20 to 59; voluntary coverage for residents aged 60 to 64 and for Japanese citizens residing abroad (aged 20 to 64; to age 69 in special cases).

Self-employed persons who run an unincorporated business with up to four workers.

Employees' pension insurance: Employees younger than age 70 in covered firms in industry and commerce.

Exclusions: Most self-employed persons.

Special system for civil servants.

Source of Funds

Insured person

National pension program: No direct contributions to the national pension program; contributions from the employees' pension insurance or other employment-related program are transferred to the national pension program. The total amount transferred is based on the number of the insured persons under each program.

The employees' pension insurance or other employment-related programs pay contributions for low-income insured persons and dependent spouses of insured persons.

Employees' pension insurance: 8.338% (September 2012 to August 2013, gradually rising to 9.150% by September 2017) of monthly wage class earnings (salary and bonuses before tax), according to 30 wage classes; miners andseamen contribute 8.596% (September 2012 to August 2013, gradually rising to 9.150% by September 2017) of monthly earnings (salary and bonuses before tax).

The contributions of insured persons whose employers contract out a portion of the employees' pension insurance are reduced by 1.2% to 2.5% of monthly earnings (salary and bonuses before tax).

The minimum monthly earnings used to calculate contributions are 98,000 yen.

The maximum monthly earnings used to calculate contributions are 620,000 yen.

The minimum and maximum earnings levels are adjusted on an ad hoc basis according to the increase in the national average wage.

Self-employed person

National pension program: 14,980 yen a month (April 2012 to March 2013, gradually rising to 16,900 yen a month by September 2017).

Employees' pension insurance: Generally not applicable.

Employer

National pension program: Contributions from the employees' pension insurance or other employment-related program are transferred to the national pension program (see Insured Person).

Employees' pension insurance: 8.338% (September 2012 to August 2013, gradually rising to 9.150% by September 2017) of monthly payroll (salary and bonuses before tax), according to 30 wage classes; contributions for miners and seamen, 8.596% (September 2012 to August 2013, gradually rising to 9.150% by September 2017) of payroll (salary and bonuses before tax).

The contributions of employers who contract out a portion of the employees' pension insurance are reduced by 1.2% to 2.5% of monthly earnings (salary and bonuses before tax).

The minimum monthly earnings used to calculate contributions are 98,000 yen.

The maximum monthly earnings used to calculate contributions are 620,000 yen.

The minimum and maximum earnings levels are adjusted on an ad hoc basis according to the increase in the national average wage.

Government

National pension program: 50% of the cost of benefits and 100% of administrative costs are financed by the national tax system.

Employees' pension insurance: The total cost of administration is financed by the national tax system.

Qualifying Conditions

Old-age pension

National pension program: Age 65 with at least 25 years of contributions (including any periods exempt from contribution requirements such as low-income periods). The full pension is paid with 40 years of paid contributions. The coverage period includes years of coverage under the employees' pension insurance and other employment-related programs as an insured's dependent spouse (including common-law spouse). There is no requirement to cease employment and the pension is not earnings tested.

Early pension: Aged 60 to 64 with at least 25 years of contributions.

Deferred pension: The pension may be deferred until age 70. The insured may claim the pension at least one year after meeting the qualifying conditions for the old-age national pension.

Spousal supplement: If the insured receives a supplement for a spouse under the employees' pension insurance, the spouse will receive a supplement when he or she reaches age 65 and starts to receive the old-age national pension.

Employees' pension insurance: Age 60 (rising to age 65 by 2025 (men) and 2030 (women); currently age 59 for seamen and miners) with at least 25 years of coverage (including any periods exempt from contribution requirements such as low-income periods). There is no requirement to cease employment. The pension is reduced if the pension and salary combined exceed a certain limit. The reduction is greater for those aged 60 to 64 than for those aged 65 to 69.

Dependent's supplement: Paid for a dependent spouse younger than age 65. The supplement ceases when the spouse reaches age 65 and receives a pension in his or her own right under the national pension program. Paid for children up to the end of the fiscal year in which they reach age 18 (up to the month they reach age 20 if disabled).

Disability pension

National pension program: Must be assessed with a Group I (total disability and requires constant attendance) or a Group II (severely restricted ability to live independently) disability. Must have been insured at the first medical exam and have paid contributions during 66.7% of the period from age 20 to two months before the month of the first medical exam (including any periods exempt from contribution requirements such as low-income periods). Alternatively, must have paid continuous contributions for one year from age 20 to two months before the month of the first medical exam (until March 2016).

Dependent's supplement: Paid for children up to the end of the fiscal year in which they reach age 18 (up to the month they reach age 20 if disabled).

Employees' pension insurance: Must be assessed with a Group I (total disability and requires constant attendance), a Group II (severely restricted ability to live independently), or a Group III (severely restricted ability to work) disability. Must have been insured at the first medical exam and have paid contributions during 66.7% of the period from age 20 to two months before the month of the first medical exam (including any periods exempt from contribution requirements such as low-income periods).

Dependent's supplement: Paid to persons with a Group I or II disability for a dependent spouse younger than age 65. The supplement ceases when the spouse reaches age 65 and receives a pension in his or her own right under the national pension program.

Disability grant (employees' pension insurance): Paid for a degree of disability assessed as less severe than Group III. Must have paid contributions during 66.7% of the period from age 20 to two months before the month of the first medical exam (including any periods exempt from contribution requirements such as low-income periods).

Survivor pension

National pension program: The deceased must have satisfied one of the following conditions: was an old-age pensioner; was an insured person or a resident of Japan aged 60 to 64 with paid contributions during 66.7% of the period from age 20 to two months before the month of the death (including any periods exempt from contribution requirements such as low-income periods); or, if younger than age 65, must have paid continuous contributions for one year before the two-month period before the month of the death.

Eligible survivors include the widow living with and caring for the deceased's children up to the end of the fiscal year in which the child reaches age 18 (age 19 if disabled), and the deceased's children up to the end of the fiscal year in which the child reaches age 18 (age 19 if disabled).

Dependent's supplement: Paid for children up to the end of the fiscal year in which they reach age 18 (up to the month they reach age 20 if disabled).

Childless widow's pension (national pension program): Paid to a childless, dependent widow aged 60 to 64 who was married to the deceased for at least 10 years provided the deceased was not an old-age pensioner at the time of death and had at least 25 years of contributions (including any periods exempt from contribution requirements such as low-income periods).

Death grant (national pension program): The deceased was not an old-age or disability pensioner at the time of death and had at least three years of contributions (including any periods exempt from contribution requirements such as low-income periods).

Employees' pension insurance: The deceased must have met one of the following conditions: received or was eligible for an old-age or disability (Group I or II) pension; or was insured with paid contributions during 66.7% of the period from age 20 to two months before the month of the death (including any periods exempt from contribution requirements such as low-income periods).

Eligible survivors include a widow, a widower aged 55 or older at the time of the insured's death (benefits are paid from age 60), children or grandchildren up to the end of the fiscal year in which the child reaches age 18 (age 19 if disabled), and parents or grandparents older than age 55 at the time of the insured's death (benefits are paid from age 60), if they were financially dependent on the deceased at the time of death. The pension is paid to the first eligible survivor in the following order of priority: spouse, children, parents, grandparents, and grandchildren.

Widow's supplement (employee's pension insurance): An additional benefit may be paid to a childless widow aged 40 to 64 if she was aged 40 or older at the time of the insured's death.

Old-Age Benefits

Old-age pension

National pension program: The full pension is 786,500 yen a year. A reduced pension is paid according to the number of contributions paid and credited. The pension is paid every two months.

Early pension: For those born on or after April 2, 1941, the reduction is 0.5% multiplied by the number of months between application and one month before age 65. For older cohorts, the pension is reduced by 42% to 11%, depending on the age at which the pension is awarded from age 60 to 64.

Deferred pension: For those born on or after April 2, 1941, the increase is 0.7% multiplied by the number of months between application and one month before age 65. For older cohorts, the pension paid at age 65 is increased by 12% to 88%, depending on the age at which the pension is awarded from ages 66 to 70.

Dependent's supplement: The supplement is paid directly to a qualifying spouse aged 65 or older and ranges from 15,200 yen to 226,300 yen a year, depending on the spouse's age.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living and wages.

Employees' pension insurance: The pension is based on the insured's average monthly wage over the full career multiplied by a coefficient determined by the insured's date of birth multiplied by the number of months of coverage. The pension is paid every two months.

Pensioners aged 60 to 64 receive an additional 1,676 yen a month for each month of total coverage.

Working pensioner (aged 60 to 64): The full pension is paid for continued employment from age 60 to 64 if the combined total of monthly earnings and pension is no greater than 280,000 yen; if the combined monthly total is 280,000 yen to 460,000 yen, the pension is reduced by 50% of the amount exceeding 280,000 yen; if monthly earnings exceed 460,000 yen a month, the pension is further reduced.

Working pensioner (aged 65 to 69): If the combined monthly earnings and pension exceed 460,000 yen, the pension is reduced by 50% of the amount exceeding 280,000 yen.

Dependent's supplement: 226,300 yen a year is paid for a spouse; 226,300 yen a year for each of the first two children and 75,400 yen a year for each subsequent child.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living and wages.

Permanent Disability Benefits

Disability pension

National pension program: 983,100 yen a year is paid for a Group I disability; 786,500 yen a year for a Group II disability.

Dependent's supplement: 226,300 yen a year is paid for each of the first two children and 75,400 yen a year for each subsequent child.

Benefits are paid every two months.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living and wages.

Employees' pension insurance: 125% of the old-age employees' pension plus additional benefits for dependents the insured received or was eligible to receive is paid for a Group I disability; 100% (plus additional benefits for dependents) for a Group II disability; or 100% for a Group III disability. For persons with less than 300 months of coverage, the pension is calculated based on a contribution period of 300 months.

The minimum benefit is 589,900 yen a year.

Dependent's supplement: 226,300 yen a year is paid for a spouse.

Benefits are paid every two months.

Disability grant: A lump sum of 200% of the old-age employees' pension the insured received or was eligible to receive is paid. The minimum lump sum is 1,150,200 yen.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living and wages.

Survivor Benefits

Survivor pension

National pension program: 786,500 yen a year is paid for a widow.

Dependent's supplement: 226,300 yen a year is paid for each of the first two children and 75,400 yen a year for each subsequent child.

Full orphan's pension: The benefit is the same as for a widow plus dependent supplements and is split equally among all eligible full orphans.

Childless widow's pension: 75% of the old-age pension the deceased would have been eligible to receive is paid.

Benefits are paid every two months.

Death grant: A lump sum of 120,000 yen to 320,000 yen is paid according to the number of paid contributions from three to 35 years.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living and wages.

Employees' pension insurance: 75% of the old-age pension is paid to the first eligible survivor.

Widow's supplement: An additional benefit of 589,900 yen a year may be paid to a childless widow aged 40 to 65.

Benefits are paid every two months.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in the cost of living.

Administrative Organization

Pension Bureau of the Ministry of Health, Labour and Welfare (http://www.mhlw.go.jp) supervises both the national and employees' pension programs.

Japan Pension Service (http://www.nenkin.go.jp), under the fiscal and management responsibility of the Ministry of Health, Labour and Welfare, administers both programs nationally.

Japan Pension Service collects contributions, provides consultation services, and pays benefits for both programs through their branch offices.

Sickness and Maternity

Regulatory Framework

First and current laws: 1922 (employees' health insurance), implemented in 1927; 1938 (national health insurance); and 1982 (medical system for the elderly), implemented in 1983.

Type of program: Social insurance system.

Coverage

National health insurance: All persons residing in Japan not covered under the employees' health insurance program.

Special national health insurance societies provide coverage for certain occupations.

Employees' health insurance

Society-managed health insurance: Members of an occupational health insurance society.

Association-managed health insurance: Employees of firms in industry and commerce with five or more employees are covered by the program managed by the Japan Health Insurance Association, unless the insured is a member of an occupational health insurance society.

Voluntary coverage for employees in private-sector workplaces with fewer than five workers and for agricultural, forestry, or fishery workers.

Exclusions: Self-employed persons.

Special systems for seamen, private-school employees, and local and national government employees.

A health and medical services program covers persons aged 75 or older.

Source of Funds

Insured person

National health insurance: The contribution is set by the insurer but must not exceed 650,000 yen a year per household. (The average annual contribution in 2010 was 81,021 yen per insured person, or 141,658 yen per household.)

Contributions may be reduced for low-income persons.

Employees' health insurance: 5.00% of monthly payroll (salary and bonuses before tax), according to 47 wage classes (association-managed program). The annual average contribution in 2010 was 3.45% of monthly payroll (salary and bonuses before tax), according to 47 wage classes (society-managed program).

The minimum monthly earnings used to calculate contributions are 58,000 yen.

The maximum monthly earnings used to calculate contributions are 1,210,000 yen.

The minimum and maximum earnings levels are adjusted according to any increase in the national average wage.

Self-employed person

National health insurance: The contribution is set by the insurer but must not exceed 650,000 yen a year per household. (The average annual contribution in 2010 was 81,021 yen per insured person, or 141,658 yen per household.)

Contributions may be reduced for low-income persons.

Employees' health insurance: Not applicable.

Employer

National health insurance: None.

Employees' health insurance: 5.00% of monthly payroll (salary and bonuses before tax), according to 47 wage classes (association-managed program). The annual average contribution in 2010 was 4.22% of monthly payroll (salary and bonuses before tax), according to 47 wage classes (society-managed program).

The minimum monthly basic earnings used to calculate contributions are 58,000 yen.

The maximum monthly basic earnings used to calculate contributions are 1,210,000 yen.

The minimum and maximum earnings levels are adjusted according to any increase in the national average wage.

Government

National health insurance: A subsidy of 50% (41% from the national government and 9% from the prefecture) of the cost of medical care.

Employees' health insurance: 16.4% of benefit costs, 16.4% of the cost of health care for older people, the total cost of administration for the association-managed program, and part of the cost of administration for the society-managed program.

Also, about 50% of the cost (excluding the cost covered by the insured) of medical care provided under the health and medical services program for older people.

Qualifying Conditions

National health insurance: Must reside in Japan.

Employees' health insurance: Must be in covered employment. If an insured person leaves employment but was in covered employment during the previous two months, the insured may be covered on a voluntary basis for up to two years.

Eligible dependents include spouses, parents, grandparents, younger siblings, children, and grandchildren whether or not residing with the insured person; and fathers- and mothers-in-law, uncles, aunts, nephews, nieces, and older siblings if they reside with the insured.

Sickness and Maternity Benefits

National health insurance: Each insurer provides maternity and child care allowances and funeral grants, according to the municipality.

Employees' health insurance

Sickness and injury allowance: 66.67% of the average daily basic wage is paid according to wage class. The benefit is paid after a three-day waiting period for up to 18 months. Health insurance societies may provide more generous benefits. If the insured receives wages, benefits are suspended or partially reduced.

Maternity allowance: Approximately 66.67% of the average daily basic wage is paid, according to wage class, for 42 days before (98 days for expected multiple births) and 56 days after the expected date of childbirth. If the insured receives wages, benefits are suspended or partially reduced.

Child care allowance: A lump sum of 420,000 yen is paid to an insured person or the dependent of an insured person.

Funeral grant: A lump sum of 50,000 yen is paid to a dependent who pays for the funeral. If there is no dependent, the actual cost is paid to the person who pays for the funeral, up to 50,000 yen.

Workers' Medical Benefits

National health insurance: Clinics, hospitals, and pharmacists under contract with and paid by the insurer usually provide medical care and treatment (some insurers provide services directly through their own clinics and hospitals). Benefits include medical treatment, surgery, hospitalization, nursing care, dental care, maternity care (only for a difficult childbirth), and medicine.

There is no limit to duration.

Cost sharing: The amount depends on the person's age: 20% of the cost for preschool children; 30% of the cost for persons up to age 69; 10% or 30% of the cost (depending on income) for persons aged 70 or older.

Hospitalized persons also pay a daily fee toward the cost of nonmedical expenses, depending on family income.

Employees' health insurance: Benefits include medical treatment, surgery, hospitalization, nursing care, dental care, maternity care (only for a difficult childbirth), and medicine.

There is no limit to duration.

Cost sharing: The amount depends on the person's age: 20% of the cost for preschool children; 30% of the cost for persons up to age 69; 10% or 30% of the cost (depending on income) for persons aged 70 or older.

Hospitalized persons also pay a daily fee toward the cost of nonmedical expenses, depending on family income.

Dependents' Medical Benefits

National health insurance: Not applicable.

Employees' health insurance: Medical benefits for dependents are the same as those for the insured.

Administrative Organization

Health Insurance Bureau of the Ministry of Health, Labour and Welfare (http://www.mhlw.go.jp) oversees the National Health Insurance and Employee's Health Insurance programs.

Regional Bureaus of Health and Welfare and prefectures supervise the programs locally.

National health insurance: Municipalities administer the program.

Employees' health insurance: Japan Health Insurance Association (http://www.kyoukaikenpo.or.jp) administers the association-managed program nationally and 1,447 health insurance societies administer the society-managed program nationwide.

Municipalities administer the health and medical services program for older people.

Work Injury

Regulatory Framework

First law: 1911.

Current law: 1947 (workmen's accident compensation insurance).

Type of program: Social insurance system.

Coverage

All employees not included under voluntary coverage or special systems.

Voluntary coverage for employees in agricultural, forestry, and fishery establishments with fewer than five workers.

Some self-employed persons and entrepreneurs (such as business owners of small- and medium-sized enterprises) are covered.

Special systems for civil servants.

Source of Funds

Insured person: None.

Self-employed person: 0.25% to 8.9% of declared earnings.

Employer: 0.25% to 8.9% of payroll, according to a three-year accident rate.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The benefit is 60% of the insured's average daily wage in the three months before the temporary disability began plus a temporary disability supplement of 20% of the insured's average daily wage. The benefit is paid after a three-day waiting period until recovery (the employer pays 60% of the average daily wage for the first three days).

The minimum daily benefit is 3,960 yen.

The maximum daily benefit is 12,984 yen to 24,608 yen, depending on the insured's age.

Benefit adjustment: Benefits are automatically adjusted quarterly for wage changes greater than 10% from the previous quarter.

From the 19th month, persons with less severe disabilities continue to receive the same level of benefit until recovery; persons with more severe disabilities receive the disease compensation pension (annual benefit is 100% of the average daily wage in the preceding three months multiplied by 245 to 313 days until recovery, according to the degree of disability), plus a special supplement based on the worker's annual salary bonus.

Benefits are paid every two months.

Benefit adjustment: Benefits are automatically adjusted annually for changes in wages.

Permanent Disability Benefits

Permanent disability pension: An annual pension of 131 to 313 times the insured's average daily wage in the three months before the disability began is paid to persons with serious disabilities (Grades 1 to 7). The pension varies according to the assessed degree of disability.

A lump sum of 56 to 503 times the average daily wage in the three months before the disability began is paid to persons with less serious disabilities (Grades 8 to 14). The pension varies according to the assessed degree of disability.

Constant-attendance allowance (Grades 1 and 2): Up to 104,290 yen a month is paid if the insured requires the constant attendance of others to perform daily functions (56,600 yen if family members provide care; up to 52,150 yen a month if the insured requires part-time care (28,300 yen if family members provide care).

Benefits are paid monthly.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in wages.

Workers' Medical Benefits

Benefits include medical treatment, surgery, hospitalization, nursing, dental care, medicine, appliances, and transportation.

There is no limit on the duration of benefits.

Survivor Benefits

Survivor pension: An annual pension of the insured's average daily wage in the three months before the insured's death multiplied by 153 to 245 days is paid according to the number of survivors.

Eligible survivors include a widow or widower (aged 60 or older), children and grandchildren (up to the end of the fiscal year in which the child reaches age 18), parents and grandparents (aged 60 or older), and brothers and sisters (up to the end of the fiscal year in which the child reaches age 18; or aged 60 or older) who were dependent on the deceased worker at the time of death.

Benefits are paid every two months.

Benefit adjustment: Benefits are automatically adjusted annually according to changes in wages.

Death grant: If there are no eligible survivors, a lump sum of the insured's average daily wage in the three months before the insured's death multiplied by 1,000 days is paid to a nondependent survivor.

Funeral grant: The grant is 60 days of the insured's average daily wage in the three months preceding death or 315,000 yen plus 30 days of wages, whichever is greater.

Administrative Organization

Ministry of Health, Labour and Welfare (http://www.mhlw.go.jp) provides general supervision and administration.

Work Injury Compensation Department within the Ministry of Health, Labour and Welfare's Bureau of Labour Standards administers the program through prefectural Labour Bureaus and local Labour Standards Inspection Offices.

Unemployment

Regulatory Framework

First law: 1947.

Current law: 1974 (employment insurance).

Type of program: Social insurance system.

Coverage

Employees younger than age 65.

Voluntary coverage for employees in agricultural, forestry, and fishery establishments with fewer than five regular employees.

Exclusions: Workers with less than 20 scheduled working hours per week and self-employed persons.

Special systems for daily workers and seasonal workers.

Source of Funds

Insured person: 0.5% of monthly earnings (salary and bonuses before tax); 0.6% for agricultural, forestry, fishery, or sake brewing industry workers.

Self-employed person: Not applicable.

Employer: 0.85% of payroll (salary and bonuses before tax); 0.95% for agricultural, forestry, fishery, or sake brewing industry workers; and 1.05% for construction workers.

Government: 13.8% of the cost of unemployment benefits and special allowances, 18.3% of the cost of benefits for daily workers, and 6.9% of the cost of benefits for insured persons on child care leave and for older workers.

Qualifying Conditions

Unemployment benefit: Must have at least 12 months of coverage during the last 24 months before unemployment (in case of unemployment due to insolvency or dismissal, at least six months of insurance during the last 12 months). Must be registered with the Public Employment Security Office and be capable of, and willing to, work. The unemployed person must report to the Public Employment Security Office once every four weeks. Unemployment must not be due to voluntary leaving, serious misconduct, refusal of a suitable job offer, or nonattendance at vocational training (otherwise, the benefit may be limited to one to three months).

Special daily or monthly allowances: The insured must have at least three years (one year if receiving the benefit for the first time) of coverage to receive education and training benefits and must take designated educational and training courses.

Older worker benefit: Paid to workers aged 60 to 64 with more than five years of coverage whose wage was reduced by 75% from the wage paid at age 60.

Child care leave benefit: Paid to insured persons who take child care leave to care for a newborn child up to age 1; up to age 18 months under certain conditions.

Nursing care leave benefit: Paid to insured persons who take leave to provide nursing care for family members.

Unemployment Benefits

Unemployment benefit: 50% to 80% of the insured's average daily wage (higher percentages are awarded to lower-wage earners) in the six months before unemployment is paid; 45% to 80% if aged 60 to 64. The benefit is paid after a seven-day waiting period for 90 to 330 days, according to the length of coverage, age, and reasons for unemployment. The benefit may be extended for another 60 days for insured persons who are unemployed due to insolvency or dismissal and are having difficulty finding a new job, taking into consideration age and regional circumstances (temporary measure until March 31, 2014).

The minimum daily benefit is 1,864 yen.

The maximum daily benefit is 7,890 yen.

Special daily or monthly allowances: Allowances are paid to cover the cost of vocational training, transportation for job search activities, moving, and lodging expenses while seeking employment in the wider area.

Older worker benefit: The maximum benefit is 15% of the wage after age 60, depending on the percentage of wage reduction.

Child care leave benefit: The monthly benefit is 50% of the insured's average daily wage in the six months before the leave period multiplied by 30.

Nursing care leave benefit: 40% of the insured's wage before the leave period is paid.

Administrative Organization

Ministry of Health, Labour and Welfare (http://www.mhlw.go.jp) provides general supervision and management.

Employment Security Bureau in the Ministry of Health, Labour and Welfare administers the national program through the Employment Insurance Divisions of prefectural Labour Bureaus and Public Employment Security Offices.

Family Allowances

Regulatory Framework

First and current laws: 1971 (child allowance), implemented in 1972, and 2010 (payment of child allowance).

Type of program: Employer-liability and social assistance system.

Coverage

Persons raising or fostering one or more children younger than the age of graduation from junior high school.

Source of Funds

Insured person: None.

Self-employed person: None.

Employer: 47% of the cost (about 0.15% of wages) for children younger than age 3.

Government: For employees' children younger than age 3: 36% of the cost paid by the National Treasury; 9% by the prefecture; and 9% by municipalities. For employees' children aged 3 to 15 and the children of self-employed and unemployed persons: 67% of the cost paid by the National Treasury; 17% by the prefecture; and 17% by municipalities.

Qualifying Conditions

Must meet an income test of 9.6 million yen a year for parents with two children (June 2012).

Family Allowance Benefits

The benefit is 15,000 yen a month for each child younger than age 3; 10,000 yen a month for each of the first two children aged 3 up to graduation from elementary school; 15,000 yen a month for each subsequent child aged 3 up to graduation from elementary school; and 10,000 yen a month for each child in junior high school.

For persons who do not meet an income test, 5,000 yen a month is paid for each child up to graduation from junior high school.

Allowances are normally paid every four months (February, June and October) and the sum of allowances for the previous three months is paid.

Benefit adjustment: Benefits are adjusted on an ad hoc basis.

Administrative Organization

Ministry of Health, Labour and Welfare (http://www.mhlw.go.jp) supervises the program through its Equal Employment, Children, and Families Bureau.

Japan Pension Service Branch Offices collect contributions.

Municipalities pay allowances.