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 more social purposes (nine policy areas) and (2) the schemethat makes the provisions of the benefits must contribute to the redistribution of income
across individuals or involve compulsory participation.
Based on these standards, Japan has aggregated and provided data on 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
Public social expenditure is social spending with financial flows controlled by the generalgovernment (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 butoperated 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 Area
Social expenditure is categorized into nine policy areas. The definition of each policy area is
as 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 labourimarket or guarantee incomes when a person has reached a ʻstandardʼ 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 programs concerning early
retirement for labour market reasons which are classified 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 survivorsʼ 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 relatedto 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. This
excludes 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).
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 beneficiariesʼ prospect of finding gainfulii

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 Benefit
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 objective of the scheme is to provide benefits for one of the nine risks or needs: (1)Old age, (2) Survivors, (3) Disability, (4) Employment injury, (5) Sickness and health, (6)Family/Children, (7) Unemployment, (8) Housing, and (9) Social assistance/others.
② The scheme is set up by legislation that attributes specified rights to, or imposes specified
obligations on, a public, semi-public, or autonomous body.
③ The scheme is administered by a public, semi-public, or autonomous body that has been
set up by legislation. They can be a private body that has been commissioned to execute legallydefined obligations.
Social Benefit by category
Social Benefit is classified into three categories: "Medical care," "Pensions," and "Welfare andiii

others." 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 Benefit by Function
This classification is based on the ILO's 19th International Inquiry. For definitions of Social
Benefit by function and the benefits and programs included in each function, refer toAppendix 2-4.
Social Security Revenue
This is a financial resource that can be used for Social Security Revenue (ILO standards),
administrative costs, facility maintenance costs, and so on. At the major classification level,
they are divided into four categories: social insurance, tax, income from capital, and others.

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(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 publiccontributions).
(3) Income from capital
Income from capital includes interest and dividends.
(4) OthersOthers include receipt from reserve funds, etc.
1-3 EU Standards
Receipts of Social Security Schemes
Receipts of Social Security Schemes are receipts appropriated to social benefits,administration costs, facility development and maintenance costs, etc., and comprise thefollowing three categories: “Social contributions,” “General government contributions,” and“Other receipts.”(1) Social contributions① Employers' social contributions
Employers' social contributions comprise the following two categories: “Actual employers'social contributions” and “Imputed employers' social contributions.” “Actual employers'social contributions” are amounts paid by employers to social security schemes in order tosecure their employeesʼ rights to receive social benefits. “Imputed employers' socialcontributions” are amounts paid by employers for their employees and others withoutestablishing a fund or reserve1. Amounts contributed by national or local governments underpublic officersʼ schemes are accounted for as employers' social contributions.
② Social contributions paid by the protected persons
Social contributions paid by the protected persons are amounts paid by individuals orhouseholds to social security schemes in order to acquire or maintain their rights to receive
social benefits. Social contributions paid by the protected persons comprise the following
Schemes in Japan that fall under imputed employers' social contributions are the Government Employees' Accident
Compensation, the Local Government Employees' Accident Compensation (excluding the Fund for Local Government
Employees' Accident Compensation), and Former Public Corporation Staffs' Accident Compensation.

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three categories: “Employees,” “Self-employed persons,” and “Pensioners and other.”
However, for the purpose of Japanese social security revenue statistics, such contributions
are classified into two categories of “Employees” and “Self-employed persons, pensioners
and other” due to statistical constraints.
(2) General government contributions
General government contributions are costs for the operation of non-contributory schemes2
under governmentʼs management and financial support provided by national or local
governments or social security schemes and comprise the following two categories:“Earmarked taxes” and “General revenue.” “Earmarked taxes” are revenues from taxes andpublic charges that are required by law to be used only to finance social security schemes3.
“General revenue” is general government contributions other than earmarked taxes. In theReceipts of Social Security Schemes table, only “General government contributions,” which
are the total of “Earmarked taxes” and “General revenue,” are shown.
(3) Other receipts
Other receipts comprise the following two categories: “Income from capital” and “Others.”“Income from capital” includes investment income generated by public pension and otherschemes. Miscellaneous income other than income from capital is classified as “Others.”
Receipts from reserves maintained in public pension schemes, employment insurance
schemes, etc., are accounted for as transfers within each scheme. Therefore, they are notincluded in the “Others” category.

Schemes that do not require social contributions.
An example of earmarked taxes is general social contributions, which is a tax earmarked for social security in France.
Consumption tax revenue in Japan is required by the Consumption Tax Act to “be used every fiscal year to provide social
benefits under established schemes of pensions, medical care, and long-term care, and to cover expenses for measures toaddress declining birthrate, as well as for the purposes of use provided for in the Local Allocation Tax Act,” but is not subject
to separate accounting. Therefore, it is classified as “General revenue” rather than an “Earmarked tax” under the EU
standards. Earmarked taxes in Japan include contributions to schemes that are funded by enterprises responsible for cause,such as the Relief System for Sufferers from Adverse Drug Reactions.
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