IV. Appendix
1. Description of the main terms used
1-1 OECD Standards
Social Expenditure
According to the OECD standards, the scope of social expenditure is defined as "Theprovision by public andprivate institutions of benefits to, and financial contributions

targeted at, households and individuals in order to provide support during circumstances
which adversely affect their welfare." However, it only includes benefits provided byinstitutions under certain schemes and does not include a direct payment for a particular
good or service or an individual contract or transfer. The conditions for an expenditure item
to be identified as "social" are twofold: (1) the benefits are expected to address one or moresocial purposes (nine policy areas) and (2) the scheme that makes the provisions of thebenefits must contribute to the redistribution of income across individuals or involve
compulsory participation. Based on these standards, Japan has aggregated and provided dataon public social expenditure and mandatory private social expenditure (explained below),which include expenditure notdirectly transferred to individuals, such as facility

maintenance expenses.
Public social expenditure and mandatory private social expenditure are two categories ofsocial expenditure used by the OECD. The distinction between public and private social
protection is made based on whoever controls the relevant financial flows public institutions
or private bodies. The Financial Statistics of Social Security of our country cover the rangeof these two types of expenditure.
Public Social Expenditure
Public social expenditure is social spending with financial flows controlled by the general
government (differentlevels of government and social security funds), as social insurance

and social assistance payments.
Mandatory Private Social Expenditure
Mandatory private social expenditure refers to social support stipulated by legislation but
operated through the private sector, such as direct sickness payments by employers to theirabsent employees as legislated by publicauthorities, or benefits accruing from mandatory

contributions to private insurance funds.
Social Expenditure by Policy AreaiSocial expenditure is categorized into nine policy areas. The definition of each policy area isas follows. For the specific benefits and projects included in each policy area, see Appendix 22.
(1) Old Age
Old-age comprises all cash expenditures (including lump sum payments) on old-age
pensions. Old age cash benefits provide an income for persons retired from the labour
market or guarantee incomes when a person has reached a ‘standard’ pensionable age or
fulfilled the necessary contributory requirements. This category also includes early
retirement pensions: pensions paid before the beneficiary has reached the standard'
pensionable age relevant to the programme.
Excluded are programmes concerning early retirement for labour market reasons which areclassified under "Unemployment." Support services for the elderly related to IADL
(Instrumental Activities of Daily Living) such as shopping and laundry are also recorded.
(2) Survivors
Survivors comprises social expenditure programmes in the public sphere which provide thespouse or dependent of a deceased person with a benefit (either in cash or in kind).
Allowances and supplements for dependent children of the recipient of a survivors’ benefit
are also recorded here.
(3) Incapacity-related benefits
Disability cash benefits comprise of cash payments on account of complete or partial
inability to participate gainfully in the labour market due to disability. The disability may becongenital, or the result of an accident or illness during the victim's lifetime.
Spending on Occupational injury and disease records all cash payments such as paid sickleave, special allowances and disability related payments such as pensions, if they are related
to prescribe occupational injuries and diseases. Sickness cash benefits related to loss ofearning because of the temporary inability to work due to illness are also recorded. Thisexcludes paid leave related to sickness or injury of a dependent child which is recorded underfamily cash benefits. All expenditure regarding the public provision of health care is recorded
under health. Social expenditure on services for the disabled people encompasses services
such as day care and rehabilitation services, home-help services and other benefits in kind.
(4) HealthThis category includes benefits in kind for medical care spent for treatment and does notinclude sickness and injury allowance. Examples include inpatient and outpatient care,emergency medical care, prescribed medicines, pharmaceuticals and other medical nondurable goods, preventive care, long-term care services, including medical and nursing
services and support services related to ADL (Activities of Daily Living) such as bathing,eating and toileting.
(5) Family
Family includes expenditure which supports families (i.e. excluding one-person households).

iiThis expenditure is often related to the costs associated with raising children or with thesupport of other dependents. Expenditure related to maternity and parental leave is grouped
under the family cash benefits sub-category.
(6) Active labour market programmes
Active labour market programmes - contains all social expenditure (other than education)
which is aimed at the improvement of the beneficiaries’ prospect of finding gainful
employment or to otherwise increase their earnings capacity. This category includes
spending on public employment services and administration, labour market training, special
programmes for youth when in transition from school to work, labour market programmes
to provide or promote employment for unemployed and other persons (excluding young anddisabled persons) and special programmes for the disabled.
(7) Unemployment
This category includes all cash expenditure to people compensating for unemployment. This
includes redundancy payments out of public resources as well as pensions to beneficiaries
before they reach the 'standard' pensionable age if these payments are made because they
are out of work or otherwise for reasons of labour market policy.
(8) Housing
Rent subsidies and other benefits to the individual to help with housing costs. This includes
direct public subsidies to tenants earmarked for support with the cost of housing.
SOCX also reports direct housing provision to the elderly, disabled, low income families, butexcludes mortgage relief (fiscal), (capital-) subsidies towards the construction of housing
support or implicit subsidies.
By convention, all housing benefits are classified as in-kind benefit as they are earmarked
expenditures.
(9) Other social policy areas
This category includes social benefits which fall outside the scope of the categories listedabove. Specifically, these are public assistance benefits and any benefits in kind, whichcannot be categorized into other categories.
1-2 ILO Standards
Social Security Benefit Expenditure
The ILO's 18th and 19th International Inquiries on the Cost of Social Security define Social
Benefit as schemes and services that meet the following three criteria:
1. The objectives of the schemes must be to grant benefits for at least one of the following
risks and needs: (1) Old age, (2) Survivors, (3) Invalidity, (4) Employment injury, (5)Sickness and health, (6) Family, (7) Unemployment, (8) Housing, and (9) Social assistanceand others.
2. The schemes must have been set up by legislation that attributes specific individual rightsiii

to, or-imposes specified obligations on a public, semi-public or autonomous body.
3. The schemes should be administered by a public, semi-public or autonomous body foundedby legislation, or by a private body that has been granted rights to perform legal obligations.
Japan has been tabulating social security benefit expenditures based on the ILO standards
starting with the data for the 1950 fiscal year. It has been widely used as data to understandthe part of benefits retuning to individuals, as basic data to help formulate policies, and so on.
Social Benefit by category
Social Benefit is classified into three categories: "Medical care," "Pensions," and "Welfare andothers." While this categorization is unique to Japan, it is based on the summary table ofbalance of Social Benefit from the ILO's 18th International Inquiry on the Cost of SocialSecurity.
(1) Medical CareOn the statement of revenues and expenses for social security benefits, this is the sum of
medical care for sickness-maternity and that for employment injuries. It includes costs forthe health insurance, medical care system for the latter-stage elderly, medical aid for public
assistance, medical services for the insured of the Workmen's Accident Compensation
Insurance, and government-financed medical services such as the treatment of tuberculosis
and mental disorders.
(2) Pension
On the statement of revenues and expenses for social security benefits, this is the sum of theemployment injury pension and pension. It includes payments by public pension schemes
such as Employees' Pension Insurance and National Pensions. It also includes some cash
benefits paid in the form of pensions within the scheme of gratuities for retired public
employees, and the scheme for Workmen's Accident Compensation Insurance.
(3) Welfare and Others
On the statement of revenues and expenses for social security benefits, this is the sum ofitems other than “medical care” and “pension.” It includes expenses for social welfare
services or long-term care, public assistance other than medical services, cash benefits forchild allowance, and sickness and injury cash benefits within the health insurance schemes
leave compensation benefits paid by the Workmen's Accident Compensation Insurance andunemployment benefits from Employment Insurance. In addition, long-term care includes
Long-term Care Insurance benefits and long-term care services of public assistance and copayment of Long-term Care Insurance for atomic bomb victims.
Social Security Benefit Expenditure by Function
Functional categories of Social Benefit are based on ILO's 19th International Inquiry on theCost of Social Security. For the specific benefits and projects included in each policy area, see
Appendix 2-4.

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(1) Old AgeAll benefits paid to persons who have withdrawn from the labor market due to retirement.
(2) Survivors
Benefits paid to dependents of a protected person arising from death of this protected
person.
(3) Invalidity benefits
Benefits arising from partial or total inability of a protected person due to a chroniccondition.
(4) Employment injury
Benefits paid by a work injury program for work-related injury, diseases, incapacity, or deathof a protected person.
(5) Sickness and health
Benefits paid to a protected person for disease, injury, childbirth, etc., with a view ofmaintaining, restoring, or improving the health of the protected person (also provides
benefits for earning losses during periods of absence from work due to disease or injury).
(6) Family
Benefits provided to assist families (households) with children and other dependents.
(7) Unemployment
Benefits provided to a protected person arising from the loss of gainful employment.
(8) Housing
Any means-tested benefit provided in order to directly help a household meet the costs ofhousing.
(9) Social assistance and others
Benefits in cash or kind provided to individuals or certain targeted groups who require
specific assistance in order to obtain a defined minimum level of income and meet minimum
subsistence requirements.
Social Security Revenue
Revenue refers to the overall revenue including operational losses and other expenditures (e.g.,facility maintenance expenses, etc.) in addition to benefit payments. At the majorclassification level, they are divided into three categories: social contributions, taxes, income
from capital and other receipts.
(1) Social Contributions
This is divided into employers and insured individuals. In the case of the public service
personnel system where the employer is the national government, the amount the nationalgovernment contributed as an employer is listed as an employer contribution even if it is anational expenditure (the same applies to the local public service personnel system).
(2) Taxes
These are divided into national government and local governments (other publicv

contributions).
(3) Income from capital
Income from capital includes interest and dividends.
(4) Others
Others include receipt from reserve funds, etc.
Transfers between Institutional Schemes(1) Transfers from other schemes
Transfers from other schemes include the following expenses: transfer payment among thehealth insurance schemes for early-stage elderly; transfer payments from all health insurance
schemes to the Medical Care System for the Elderly in the Latter Stage of Life; transferpayments from all health insurance schemes to the Medical Care Service Program for
Retired Employees in National Health Insurance; contributions to special schemes for
persons employed on a daily-wage basis in the Association-Kenpo Health Insurance andNational Health Insurance; transfer payments from the National Pension to other schemes
for the payment of universal Basic Pensions; transfer payments from Employees' Pension toMutual Aid Association Pensions; transfer payments from all health insurance schemes toLong-term Care Insurance, etc.
(2) Transfers to other schemes
Transfers to other systems include the following expenses: transfer payments from the other
health insurance schemes to special schemes for persons employed on a daily-wage basis,for retired employees, for the early-stage elderly, and for the Medical Care System for Latter
Stage Elderly; transfer payments from other pension schemes to the National Pension for
universal basic pensions; transfer payments made by the National Pension to the otherschemes for the universal basic pension; transfer payments from Mutual Aid Association
Pensions to Employees' Pension; transfer payments from all health insurance schemes toLong-term Care Insurance, etc.

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