Preface
The "Financial Statistics of Social Security in Japan" is a collection of statistics compiled throughthe annual settlement of social security schemes for fiscal year (FY) 2014. Schemes such aspension, health insurance, long-term care insurance, employment insurance, public assistance,and child support are included. On July 2012, the Financial Statistics of Social Security wasdesignated by the notice from the Minister of Internal Affairs and Communications as one of theFundamental Statistics based on the Statistics Act in the area of social security.
The Financial Statistics of Social Security describes the volume of social security as a whole aswell as a composition of social security by policy area in Japan. We hope that the statistics
will be used broadly as fundamental resources to monitor social security policies and finance,
and also as a significant index to conduct international comparison of social security
expenditures.
The National Institute of Population and Social Security Research will make its best efforts to meetthe national expectations of the Financial Statistics of Social Security as Fundamental Statistics.
We would like to express our deepest appreciation to the ministries and public organizations
concerned for their cooperation in compiling the Financial Statistics of Social Security.

August 2016
National Institute of Population and Social Security ResearchAkira Morita Director-General

Financial Statistics of Social Security in Japan
In this statistical report, we adopt two standards that are determined and developed byinternational organizations International Labour Organization (ILO) and Organisation for
Economic Co-operation and Development (OECD) to generate the Financial Statistics of SocialSecurity. In the following section, we explain the background and determination of each standard.

11. Cost of Social Security based on ILO standards
Based on the ILO definition, the Cost of Social Security is one standard that we adopt in this report.
Since 1949, the ILO had conducted 18 international inquiries on social benefits and publishedreports. In these inquiries, data on social security receipts and expenditures were collected
within the framework of ILO Convention No. 102 (1952) concerning Minimum Standards ofSocial Security as well as ILO Recommendations No. 67 and No. 69 (1944). Japan has been
cooperating with ILO inquiries after acceding to the United Nations in 1957, and the relevant
Ministry and institute (initially the former Ministry of Labour, followed by the Ministry of Healthand Welfare, and currently the National Institute of Population and Social Security Research)aggregated data on social security benefits of Japan and reported the results.
In response to the changes in socio-economic circumstances around the world, the ILO
revised the inquiry framework several times. In 1997, when the 19th International Inquiry wasconducted, the methodology and framework were modified to consider a wider range of social
protection and expand the coverage that provides generalized basic assistance to all citizens,
regardless of their contributions to the social security system or employment history. The 19th
Inquiry decided to limit the coverage to institutions that meet the following criteria:(1) The institutions’ objectives must provide benefits according to one of nine functions:(1) Old age, (2) Survivors, (3) Disability, (4) Employment injury; (5) Sickness andhealth, (6) Family/Children, (7) Unemployment, (8) Housing, and (9) Socialassistance/others.
(2) They must have been set up by legislation that attributes specified rights to, orimposes specified obligations on, a public, semi-public, or autonomous body.
(3) They should be administered by a public, semi-public, or autonomous body thathas been set up by legislation.
(4) They can be a private body that has been commissioned to execute legally defined
obligations.

Since FY 2000, we have been providing statistics on social security receipts and expenditures basedon the 19th International Inquiry. However, as the statistics based on the 18th Inquiry have beenused widely among policymakers and researchers, we will continue providing the data based on
the previous framework as well.
It is very important to grasp the entire picture of receipts and social security expenditures, and1

This section is based on ILO(2005) ILO Social Security Inquiry, ILO.

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continue updating data using the same standard. Moreover, ensuring the international comparabilityof social security expenditures is also required. The ILO published the reports of theinternational inquiries as “The Cost of Social Security” up to the 18th Inquiry. Since then, theILO has been providing a new database called the Social Security Inquiry (SSI). However, theSSI is constructed by gathering data that international organizations have already published,instead of gathering data based on the ILO standard from the authorities in each country. At thesame time, OECD is developing the Social Expenditure database (SOCX), which is based on theOECD standard, among developed and middle-class countries.
In July 2012, when the Financial Statistics of Social Security was designated as official
Fundamental Statistics conforming to the Statistics Act, we included data based on the OECD
standard in this report to improve the international comparability of social security expenditures.
In the next section, we explain the framework of the OECD standard.

22. Social Expenditure based on the OECD standards
OECD began publishing the SOCX in 1996. OECD defines social expenditures as follows:“The provision by public and private institutions of benefits to, and financial
contributions targeted at, households and individuals in order to provide support
during circumstances which adversely affect their welfare, provided that theprovision of the benefits and financial contributions constitutes neither a direct
payment for a particular good or service nor an individual contract or transfer.”(OECD2007).
Every expenditure item is included in Social Expenditure if it satisfies the following two
criteria: first, the benefits must be intended to address one or more social purposes and,second, the system that makes the provision of benefits should either contribute to inter-personal
redistribution or involve compulsory participation. The OECD Social Expenditure groups socialbenefits with social purpose into the following nine policy areas:(1)Old age, (2)Survivors, (3)Incapacity-related benefits, (4)Health, (5)Family, (6)Active labour
market programmes, (7)Unemployment, (8)Housing, and (9)Other social policy areas. Social
benefits include cash benefits such as pension, income security during maternity leave, welfare
benefits, and others, as well as benefits in service or kind, such as childcare, care for the elderly,
and care for people with disabilities.
The scope of Social Expenditure based on the OECD standard is broader than the Social Benefit
based on the ILO standard, as the OECD standard includes the amount of expenditure notdirectly spent on individuals, such as expenditure on equipping facilities.
In addition, many developed countries have been updating the SOCX database regularly and providing
benefits according to the nine policy areas. In this way, Social Expenditure based on the OECD
standard is an important indicator for making an international comparison of social security
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This section is based on OECD(2007) The Social Expenditure database: An Interpretive Guide SOCX
1980-2003, OECD.

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expenditures.
In the main part of this report, we present the aggregated results of social expenditures in thefollowing two categories: (1) public expenditures and (2) mandatory private expenditures, which
is operated by the private sector but prescribed by law. For international comparative analysis, weused the OECD SOCX Database.
(http://www.oecd.org/els/social/expenditure)
Finally, when the Financial Statistics of Social Security was designated as official FundamentalStatistics, it was decided to include necessary explanations about the relationship between theFinancial Statistics of Social Security and the System of National Accounts (SNA) based on theUnited Nations Standards, as well as concise descriptions of the main terminologies used in theILO and OECD standards (refer to the Appendix for more details about the terminologies used inboth standards) to ensure the statistics are useful to a wide range of users.

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