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PopulationandSocial Security
in
Japan

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Contents

1.

Population

1

2.

Overview of Social Security in Japan

17

3.

Pensions

23

4.

Health Care

31

5.

Welfare for the Elderly

42

6.

Public Assistance50

7.

Family Policy

56

8.

Policy for People with Disability

62

9.

Labour Insurance66Chapter 1 Population

Population and Social Security in Japan 2019


Chapter 1 Population
1.1 Overview of population trends
The Japanese population is ageing. Although the straight forward decline of the total fertility rate stopped in2005 at the level of 1.26, the rebound is modest and it remained 1.43 in 2017. On the other hand, life expectancy is
increasing slowly but steadily. These factors made the Japanese population’s age structure and trends; in 2017, theproportion of the elderly (aged 65 years and over) was 27.6%, the highest in the world, and census counts recorded
a decline of 962,607 persons from 2010 to 2015. This trend is expected to continue, and the total population is
projected to reduce to 88 million in 2065, with the proportion of the elderly as high as 38.4%. Based on thesedemographic realities, Japan faces enormous challenges.

Figure 1.1 Population by age group and proportion of 65 years and over (1920-2065)
140

40%

100

in million

98

0-19 years old㻌

80

56
60

56

74

76

75 71

16

68 66 64 60 55

20-64 years old㻌

35%

16

15

52 49

88
14

13

46 44

30%

12 25%
20%

42

15%
10%

27

31

35 39

3

3

3 4 4 5 5 6 7 9

1940
1947
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065

51
41 46

63

68 71

79

79 78

18 17

1930

0

30

38

36

36

29

1920

20

26

34

36

38

37

34

35

35 32

26 24 23 22 21 19

Proportion 65+

120

40

45%

128 127㻌

11 12

26
15 18 2229 34 36Year

37 37 38 39 39 38 37 35 34 5%
65 years and older㻌0%

Projection㻌

Source: 1920 to 2015 by Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications. 2020 to 2065
by Population Projections for Japan, medium-fertility and medium-mortality assumption (2017) National Institute of Populationand Social Security ResearchThis chapter is based on the draft paper prepared for the Country Report of Japan for the Mid-Term Review of
the Asian and Pacific Ministerial Declaration on Population and Development, held by the United Nations Economic
and Social Commission for Asia and the Pacific in November 2018. However, the contents of this chapter are neither
identical to the Country Report nor represent the view of the Government of Japan. The following paragraphs arein the order of the items listed in the Asian and Pacific Ministerial Declaration on Population (APMD). SDGs
(Sustainable Development Goals) indicators are used wherever possible. Those items are denoted according to therespective APMD paragraph number as (APMD x) or (SDGs x.x.x).


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Chapter 1 Population

Population and Social Security in Japan 2019


1.2 Poverty eradication and employment
It is difficult to compute the absolute poverty rate (SDGs 1.1.1), but the trend of relative poverty rate (SDGs
10.2.1) has been a widespread public concern. From 2002 to 2012, the relative poverty rates increased for all
household members and for children. This trend reversed from 2012 to 2015, and the relative poverty rates
diminished (Figure 1.2 ). Elderly women and single-parent households, particularly those in which the mother is thehead of the household, are the most vulnerable groups; poverty rates for such households are high.

Figure 1.2 Trend of relative poverty rate (1985-2015)
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Source: Comprehensive Survey of Living Conditions, Ministry of Health, Labour and Welfare
Those who do not have enough income and suffering from poverty receive cash payments, free medical care,and other benefits under the scheme of the Public Assistance. Recipients of the Public Assistance (SDGs 1.3.1)
comprised 1.7% of the total population in 2015, up from 1.5% in 2010. This proportion is even higher for the elderly(Figure 1.3 ). It is estimated that almost 80% of those who are in economic need are receiving the Public Assistance.1

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1

Ministry of Health, Labour and Welfare (2010) “On the estimation of the number of low-income households below Public Assistancethreshold (ਫ਼‫׈‬ฯ‫خޤ‬६າຮ͹ఁॶಚ੊ଵ਼͹ਬ‫ܯ‬Ͷͯ͏ͱ)”.

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Chapter 1 Population

Population and Social Security in Japan 2019

 Figure 1.3 Proportion of recipients of public assistance by age (2010, 2015)
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Source: National Survey on Public Assistance Recipients, Ministry of Health, Labour and Welfare

1.3 HealthLife expectancy in Japan in 2016 was 87.14 for women and 80.98 for men, and it was among the longest
in the world. However, the governmental goal is to extend not only life expectancy but also healthy life expectancy.
This goal is stipulated in Health Japan 21 (the second term) and Japan’s Plan for Dynamic Engagement of All
Citizens. “Health” is defined as not to have the daily activity limitation because of the health problem, measured bya consistent question in the “Comprehensive Survey of Living Conditions” (Ministry of Health, Labour and Welfare).
Using this definition, healthy life expectancy has increased from 2001 to 2016 (Figure 1.4 ), from 72.65 to 74.79
for women and from 69.40 to 72.14 for men. Since 2010, the unhealthy years are shrinking, which means that
healthy life expectancy is increasing even more than life expectancy.
3

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Chapter 1 Population

Population and Social Security in Japan 2019

Figure 1.4 Trend of healthy life expectancy (2001-2016)

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As for catastrophic spending on health (SDGs 3.8.2), the High-cost Medical Expenses Payment Systemguarantees that out-of-pocket payments exceeding 80,100 yen per month per household 2 will be reimbursed byhealth insurance, and it is assumed that all households are free from the risk of catastrophic spending on health.
Both the maternal mortality ratio (SDGs 3.1.1) and the under-5 mortality rate (SDGs 3.2.1) decreased from2010 to 2016 (Table 1-1).


Table 1-1 Under-5 mortality rate and maternal mortality ratio (2010, 2017)
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Note: The Maternal mortality ratio published in the Vital Statistics of Japan slightly differs as its
denominator is the number of birth (still birth and live birth).
Source: Number of live birth and death by Vital Statistics, Ministry of Health, Labour and Welfare

The number of new HIV infection cases (SDGs 3.3.1) was 1,075 in 2010 and 1,011 in 2016. The number of
new AIDS incidences was 469 in 2010 and 437 in 2016. 3 These figures show no significant increase or reduction.


2

For households with yearly income of over 3.7 million yen: The out-of-pocket upper limit is 57,600 yen per household per monthfor yearly income of 1.56 to 3.70 million yen, 24,600/15,000 yen for lower income households.
3 AIDS Prevention Information Network (2018) The report of AIDS Trend Committee.

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Chapter 1 Population

Population and Social Security in Japan 2019

1.4 Sexual and reproductive health, services and rights
Since the total fertility rate hit its lowest at 1.26 in 2005, it increased slowly until 2015 to reach 1.45 and again
decreased to 1.43 in 2017. Low fertility with the consequent ageing population is one of the top concerns of thecountry, and policies to mitigate the low fertility rate are abundant. The Outline of Measures against the Declining
Birthrate sets the targets concerning the environment to support child care, and Japan’s Plan for Dynamic
Engagement of All Citizens sets the “desirable birthrate” as 1.8 and stipulates support for marriage,
pregnancy/childbirth/childcare, as well as single-parent families.
The use of contraceptive practices of never-married persons (SDGs 3.7.1) aged 18 to 34 is increasing both formen and women and decreasing for married couples (Table 1-2). The decreased rate of contraceptive practices could
be caused by an increasing age at marriage which may increase the number of married couples who wish to have ababy as soon as possible, but decreased use may also be caused by an increasing number of sexless couples.4
Table 1-2 Contraceptive practices
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Source: The National Fertility Survey of Japan, National Institute of Population and Social Security Research (IPSS)

Concerning the universal coverage of reproductive services (SDGs 3.8.1), normal birth delivery is notconsidered as a sickness and hence not paid by fee-for service; instead a lump-sum payment is made as the childbirthallowance. For antenatal care and examinations, municipality financial support exists. Abortion is not covered byhealth insurance, and the fee is completely paid out-of-pocket.
Concerning the laws and regulations that guarantee full and equal access to women and men aged 15 years andolder to sexual and reproductive information and education (SDGs 5.6.2), the curriculum guidelines of sexual
education are stipulated by the Ministry of Education, Culture, Sports, Science and Technology (MEXT). However,
the average total fertility knowledge score was 34%, much lower than the 64.3% average of the high Human
Development Index countries. 5 The Outline of Measures against the Declining Birthrate has set a target to raise
this score to 70%.
Due to delay in marriage and consequent difficulties in pregnancy, the proportion of births using ART (Assisted
Reproductive Technology) to total births increased rapidly from 2.70% in 2010 to 4.93% in 2015.6 To ease theeconomic burden of couples who suffer from infertility, a partial grant for ART treatment is provided through a4National Institute of Population and Social Security Research (2017) Marriage and Childbirth in Japan Today : The Fifteenth Japanese
National Fertility Survey, 2015 (Results of Singles and Married Couples Survey), Survey Series No.35.
5 Laura Bunting et al. (2013) “Fertility knowledge and beliefs about fertility treatment: findings from the International Fertility
Decision-making Study”, Human Reproduction, Vol.28, No.2 pp. 385–397.
6 Japan Society of Obstetrics & Gynecology, ART Registry of Japan, https://plaza.umin.ac.jp/~jsog-art/ (accessed on 14 June 2018).

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Chapter 1 Population

Population and Social Security in Japan 2019

government program, and the number of approved cases rose from 96,458 in 2010 to 148,659 in 2013 7 (APMD
110).
In 2004, the Act on Special Cases in Handling Gender Status for Persons with Gender Identity Disorder cameinto effect, and a total of 6,906 persons changed gender in the family register by the end of 2016. There are ongoingdebates about whether the conditions which are applied to these special cases should be eased (APMD 84).


1.5 Education
Compulsory education in Japan covers elementary school and lower secondary school for those aged 6 to 15.
The rate of enrollment for compulsory education (SDGs 4.1.1) is 99.96% (2010) and 99.95% (2017) for elementary
school and 99.97% (2010) and 99.96% (2017) for lower secondary school. These rates indicate close to fullenrollment. However, this enrollment rate does not include foreign children living in Japan. According to sample
surveys, the proportion of foreign children not receiving compulsory education was 1.1% in 2006 and 0.7% in 2009.
Considering this situation, the MEXT implements support programs through the boards of education for Japanese
students returning from overseas and for foreign children.
The advancement rate to higher education including university, junior college, college of technology, andspecialized training college by sex (SDGs 4.3.1) was 78.4% (2010) and 77.4% (2017) for men and 81.1% (2010)
and 83.9% (2017) for women. The women’s rate increased but men’s rate did not. The women’s rate has also been
higher than the men’s throughout the period. However, the advancement rate only to a university was 56.4% (2010)
and 55.9% (2017) for men and 45.2% (2010) and 49.1% (2017) for women. So, the university advancement rate of
women increased while the rate of men remained stagnant, but the rate of women entering university wassignificantly lower than that of men (Figure 1.5).
Figure 1.5 Higher education advancement rate by sex (2000-2017)
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7

Ministry of Health, Labour and Welfare, http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000047270.html (accessed on 14 June2018).

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Chapter 1 Population

Population and Social Security in Japan 2019


1.6 Gender equality and women’s empowerment
The proportion of seats held by women (SDGs 5.5.1) increased from 2015 to 2018. Specifically, the increase
was from 8.1% to 10.1% in the House of Representatives, 16.1% to 20.7% in the House of Councillors, 8.8% to9.9% in the prefectural parliaments, and 11.8% to 12.8% in municipal parliaments. However, internationally, these
rates remain low, and the rate in the House of Representatives ranked 157th among the countries of the world in
2018. In response, the Act on Promotion of Gender Equality was enacted in 2018 to encourage political parties tomake efforts to increase female members in parliaments.
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The proportion of married women who experienced physical, sexual, or psychological violence by their spousein the previous year (SDGs 5.2.1) was 8.8% in 2014 and 10.3% in 2017. This proportion tends to decrease by age,
but the proportion of all age groups, except those in their thirties, increased from 2014 to 2017 (Figure 1.6). The
number of consultations to Spousal Violence Counseling and Support Centers also increased from 102,963 to
106,367 in the same timeframe. 8 This data may not necessarily mean that actual violence increased but could rather
indicate that there is an increasing perception that domestic violence is something about which to speak out.

Figure 1.6 Proportion of married women who experienced physical, sexual, or psychological violenceby their spouse in the previous year (2014, 2017)
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Chapter 1 Population

Population and Social Security in Japan 2019


1.7 Adolescents and young people
The adolescent birth rate (SDGs 3.7.2) is declining in recent years in Japan. The birth rate of those aged 15-19
was 4.6 in 2010, 4.5 in 2014, and dropped further to 3.8 in 2016. The abortion rate of the same age group is generally
declining since 2002, and it has been higher than the birth rate since 1977 (Figure 1.7). Although abortion remains
a crime under the Japanese Penal Code, it is legal when either the continuation of pregnancy would harm the healthof the mother physically or economically or in cases of rape under the Maternal Health Act (started as Eugenics
Protection Law in 1948). Although abortion is not covered by health insurance, the provision of safe abortion
services are maintained under the Maternal Health Act. In view of the higher abortion rate of adolescents comparedto the birth rate, comprehensive sexual education and the adoption system should be properly implemented.
Figure 1.7 Birth rate and abortion rate per 1,000 women aged 15 to 19 (1970-2016)
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Source: Vital statistics (birth rate) and Report on Public Health Administration and Services (abortion rate), Ministryof Health, Labour and Welfare
The unemployment rates (SDGs 8.5.2) of youths aged 15 to 24 and those aged 25 to 34 show similar trends,
sharply increasing during the global economic crisis of 2009, then decreasing smoothly afterward. In 2017,
unemployment was 4.6% for those aged 15 to 24 and 3.7% for those aged 25 to 34, the lowest level since the endof the 1990s (Figure 1.8 ). The unemployment rate of women is lower than that of men.
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Chapter 1 Population

Population and Social Security in Japan 2019

Figure 1.8 Youth unemployment rate (1990-2017)

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Since 2015, the Law on the Employment Promotion for Youth encourages youth employment through thedissemination of information on youth recruitment and awarding companies with good youth employment practices.
The proportion of NEET (not in education, employment, or training) of youth aged 15-24 (SDGs 8.6.1) was
1.9% in 2010 and decreased slightly to 1.8% in 2015. 9


1.8 Ageing
The proportion of the elderly (persons aged 65 years and over) rose from 23.0% in 2010 to 27.8% in 2017.10
It is projected that this proportion will rise further to 30.0% in 2025 and 38.4% in 2065. 11 This proportion is thehighest worldwide as of 2017.
As one of the indicators on the proportion of population covered by social protection floors (SDGs 1.3.1), theproportion of the elderly who are receiving public pension was 95.7% for men and 94.5% for women in 2016 (Figure
1.9 ). This proportion has decreased for both men and women since 2010. In addition to older persons still working
and hence not yet receiving pension, there are people who have not paid the pension premium and therefore do notreceive pension.
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9

Cabinet Office White Paper on Children and Young People 2017.
Population Estimates, Statistics Bureau.
11 Population Projections for Japan, medium-fertility and medium-mortality assumption (2017) National Institute of Population andSocial Security Research.
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Chapter 1 Population

Population and Social Security in Japan 2019

Figure 1.9 Proportion of persons aged 65 years and over who are receiving public pension
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Source: Household questionnaire, Comprehensive Survey of Living Conditions, Ministry of Health, Labour and WelfareAnother indicator of SDGs 1.3.1 is the proportion of persons aged 65 years and over who are the recipients of
the Public Assistance. This proportion was 3.1% for men and 2.7% for women in 2016, and these rates had increased
for both sexes since 2010 (Figure 1.10 ).

Figure 1.10 Proportion of older persons aged 65 years and over
who are recipients of the Public Assistance
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Since there are an increasing number of young people who are not paying pension premiums and who are notmarried and have no children, it is assumed that there will be an enormous challenge to ensure the social protection
floor in the future.
The public long-term care insurance system started in 2000, and the number of persons certified as recipientsof the insurance increased from 2.18 million in 2000 to 4.87 million in 2010 and then to 6.33 million in 2017. The
service provision system including finance, elderly facility, and care personnel is expanding as well. However, therole of family is still important. In 2016, 58.7% of the elderly receiving care at home are cared for by family members
who are living together. Of these family caregivers, 66% are women and 22.1% spent almost all day giving care;
this proportion is higher for women (24.3%) than men (17.9%) (SDGs 5.4.1, Figure 1.11).

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Chapter 1 Population

Population and Social Security in Japan 2019

Figure 1-11 Time spent for the care by the family care giver by sex (2016)
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There has been substantial development of the long-term care system in Japan, especially since 2000. In 2016,
the government of Japan launched the Asia Health and Wellbeing Initiative (AHWIN) to promote bilateral andregional cooperation for the development of a long-term care system through the mobility of personnel as well as
through the exchange of technology and information such as long-term care protocols, appliances, IT, and robotics.




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Chapter 1 Population

Population and Social Security in Japan 2019


1.9 International migration
Although the proportion to the total population is still small, the number of foreigners in Japan continues toincrease. The number of foreign residents staying more than three months in 2017 was 2.47 million, up from 1.69
in 2000 and 2.13 in 2010 (Figure 1.12). Furthermore, the total number of entries by foreigners, including short-term
tourists, was 5.27 million in 2000, almost doubled to 9.44 in 2010, and quadrupled to 23.22 in 2016. This sharp
increase is explained by the national policy on tourism promotion.

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Figure 1-12 Number of foreign residents (permanent and non-permanent) and foreigners
who entered Japan (1984-2016)<HDU

Note: Foreign residents are defined as those who stay more than three months. Foreigners who entered includes short-term tourists.
Source: Ministry of Justice

As for social integration, since 2012, foreign residents are integrated into the Basic Resident Registration forthe smooth delivery of municipal services. As of May 2018, Social Security Agreements have been enacted with 17
countries, signed with 4 countries, negotiated with 3 countries, and discussed preliminarily with 1 other country.
The unemployment rate of foreigners (SDGs 8.5.2) was 3.0% in 2015, slightly more than the 2.4% of Japanesenationals. By age, the youth unemployment rate is higher for the Japanese than for foreigners, whereas theunemployment rate of the middle and older aged is higher for foreigners than for the Japanese (Figure 1.13).

12

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Chapter 1 Population

Population and Social Security in Japan 2019

Figure 1.13 Unemployment by age and by nationality (2015)
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

1.10

Urbanization and internal migration

The urban population rate of Japan was 91.4% in 2015, when the population of “city” is defined as urban
population, and 68.3% if the population of Densely Inhabited Districts (DID) is defined as urban population. Bothrates are increasing (Figure 1.14).

Figure 1-14 Urban population rate (1960-2015)
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Source: Population Census, Statistics Bureau

In spite of the total population decline, the Tokyo area, the largest urban agglomeration in the world, 12
continues to have net in-migration (Figure 1.15). To ease the concentration of population to Tokyo area, theComprehensive Strategy for Overcoming Population Decline and Vitalizing the Local Economy was implemented
12

United Nations, Department of Economic and Social Affairs, Population Division (2018). World Urbanization Prospects: The 2018
Revision, Online Edition.

13

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Chapter 1 Population

Population and Social Security in Japan 2019since 2014 to promote local innovation, the return migration of retirees, and the promotion of local universities andindustries. However, the trend of excessive in-migration to Tokyo is difficult to reverse so far.

Figure 1.15 Net migration in the three major urban agglomerations (2000-2017)

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Source: Report on Internal Migration in Japan Derived from the Basic Resident Registration, Statistics Bureau

Although the total population is declining, urban area, defined as the area of Densely Inhabited Districts, isincreasing slightly. The ratio of land consumption rate to population growth rate (SDGs 11.3.1) was 6.4 from 2005
to 2010. The ratio was -0.4 from 2010 to 2015 when this rate is defined as the ratio of DID area change rate to total
population change rate (Table 1-3). In other words, despite the total population decline, both the DID populationand the population density of DID are increasing.
Table 1-3 Population and Densely Inhabited Districts
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Source: Population Census, Statistics Bureau

The proportion of municipalities which have a direct participation structure of civil society in urban planning14

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Chapter 1 Population

Population and Social Security in Japan 2019
and management (11.3.2) is 45.4%. 13 Community development by civil society is promoted through the City
Planning Act, the Land Readjustment Act, the Urban Renewal Act, and the Act on Special Measures Concerning
Urban Renaissance.


1.11

Population and sustainable development

The number of deaths, missing persons, and directly affected persons attributed to disasters (SDGs 11.5.1) arecounted, registered, and published by several official sources. These sources are the Fire and Disaster Management
Agency, the National Police Agency, and the Vital Statistics of the Ministry of Health, Labour and Welfare. The
Great East Japan Earthquake caused 19,630 disaster-related deaths, 2,569 missing persons, and 6,230 injured
persons, according to the Fire and Disaster Management Agency (15,895 deaths, 2,539 missing persons, and 6,156
injured persons according to the National Police Agency; and 3,647 disaster-related deaths according to theReconstruction Agency as of 30 September 2017). The complexity of these statistics shows that accounting forvictims of a disaster is not an easy task.
Based on data released by the National Police Agency, the age structure of deaths caused by the Great East
Japan Earthquake was primarily of the aged, with 64.3% of deaths of persons who were 60 years and over and45.5% who were 70 years and over. 14 In addition, the mortality rate of persons with disability was 1.9%, twice ashigh as the total mortality of 1.0%, according to the survey conducted by NHK, the national broadcasting
corporation. 15
In line with the Sendai Framework for Disaster Risk Reduction 2015-2030, the Basic Act for National
Resilience was enacted in 2016; the Fundamental Plan for National Resilience and the Action Plan for National
Resilience were created; and the Central Disaster Prevention Council was established (SDGs 13.1.2).
In May 2016, the Sustainable Development Goals (SDGs) Promotion Headquarters was established within thePrime Minister’s Office. Since then, public comments were gathered to formulate the Implementation Guiding
Principles; and in December 2017, SDGs Action Plan 2018 was released, and the first Japan SDGs Award was
granted to twelve parties including municipalities, civil societies, universities, and private companies. Through theimplementation of the Action Plan 2018, a Japanese SDGs model will be created and disseminated. A follow-up of
the Implementation Guiding Principles is planned for summer 2019 which will be revised further for theachievement of the SDGs by 2030.

1.12

Data and statistics

The number of people who failed to be registered to the family registry was 702 persons in 2016, whichcorresponds to 0.0006% of the total population (SDGs 16.9.1). Although this count is small, the cause of these
unregistered people/children is mainly due to family registry legal procedures. Per Civil Code Article 772-2, a childborn within 300 days after a divorce was presumed to be the child of the former husband, and unregistration to
13 City Bureau, Ministry of Land, Infrastructure, Transport and Tourism (2016) “Materials for the first study group on the maintenanceof stakeholders for the community development” Material 4-1.
14 Ushiyama, Motoyuki (2012) “Jinteki Higai no Tokuchou”, Saigai Jouhou, No.10.
15 Tatsuki, Shigeo (2013) “Koureisha, Shougaisha to Higashi Nihon Daishinsai : Saigaiji Youengosha Hinan no Jittai to Kadai” Kikan
Shoubou Bousai no Kagaku, Institute of Scientific Approaches for Fire & Disaster.

15

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Chapter 1 Population

Population and Social Security in Japan 2019family registry occurred when the mother did not wish to register her former husband as the father. This procedure
was judged by the Supreme Court in 2015 as an excessive constraint and unconstitutional, so the Civil Code wasamended in 2016 to reduce the time period to 100 days.
The Statistics Act, originally enacted in 1947, was revised in 2007 and came into effect in 2009 (SDGs
17.18.2). The Japanese national statistics plan was first established in 2009 as the Basic Plan concerning theDevelopment of Official Statistics. Since then, the Basic Plan continued to be updated, and in March 2018, the Third
Basic Plan was decided by the Cabinet. These Basic Plans are fully funded and implemented (SDGs 17.18.3).
The last population census was conducted in 2015 (SDGs 17.19.2 a), and the next is planned for 2020. The
population census with the longer set of questions has been conducted every 10 years on years ending with 0 since1920, and the population census with a shorter set of questions has been conducted every 10 years on years ending
with 5, except 1945. Birth and death registration are considered almost complete (SDGs 17.19.2 b). However, somebirth unregistrations occurred, as mentioned above. As for death unregistration, there were cases in which the family
did not register the death of the family member, so that they could continue receiving the pension. These cases werehighly mediatized in 2010. However, to receive a pension, periodical existence verification is required, and theJapan Pension Service conducted surveys and stopped pension payments in suspected cases. Without deathregistration, a funeral is impossible, and the body was either left as it was or disposed of illegally. Such instances
are criminal, and the actual number of unregistered deaths is considered low.


16

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Chapter 2 Overview of Social Security in Japan

Population and Social Security in Japan 2019

Chapter 2 Overview of Social Security in Japan
2.1 History of the Social Security System in Japan
2.1.1 Pre-Modern Era (before 1868)
As in other countries, the source of social security in Japan could be found in charity-oriented communal
activities for the poor in the pre-modern era. The “Shikain (ᅄ⟠㝔)” (four institutions for the frail elderly withoutfamily, etc.), set up in 539, was an example of this. The Imperial court, the Shogunate, and the feudal lords
provided relief to the poor. Buddhist temples also provided relief. These measures were based on the charity ethics
of Confucianism and Buddhism. However, the beneficiaries were severely limited (e.g., poor elderly withoutfamily) because mutual aid was a principle of the society in those days. For example, “Gonin-gumi (஬ே⤌)” (afive-member group in the Edo Era) might not only have been a group for the render (Nengu ᖺ㈉) payment but
also that of mutual aid in the community during this era. This was one form of the social capital of the pre-modern
society.
As for healthcare, from ancient times to the Edo Period, traditional medicine had been imported from the
China, with some original development within Japan. In the latter Edo period, Western medicine had been
imported from the Netherlands through Nagasaki. Private schools (Rangaku Jyuku ⹒Ꮫሿ) were set up in
Nagasaki and Sakura (Chiba), and from these, the notable medical faculties of the University in Japan originated.
Table 2.2 lists the detailed chronological events.
2.1.2 From the Meiji Era to the End of World War II (1868-1945)
In the Meiji Era (1868-1912), Japan started to develop in modernization. However, poverty had increased
because of instability in society, and the government had to cope with this. The Indigent Person’s Relief
Regulation was enacted (1884), but the principle of this regulation was “mutual aid for the poor,” and thebeneficiaries were severely limited. An amendment to expand the beneficiaries was discussed in the Imperial
Parliament, but they had to wait for the Poor Relief Law (1929) to be enacted. It was still inadequate compared tothe present system.
In the Meiji and Taisho Eras (1912-1926), poor health and bad working conditions for factory workers
including boys, girls, and women were serious social problems. This led to the introduction of the Factory Law(1911), which was an origin of the Labour Standards Act (1947). After that, a social insurance scheme wasintroduced for workers. This included the Health Insurance Act (1927), the National Health Insurance Act (1938),
and the Labor Pension Insurance Act (1941). In 1938 the Ministry of Health and Welfare was established. Social
welfare, healthcare, public health, and labor policy were transferred from the Home Ministry. Local governments
also made efforts to cope with poverty. Commissioned welfare volunteers were introduced in Okayama Prefecture(Saisei-komon-seido in 1917) and Osaka Prefecture (Houmen-iin-seido in 1919). This system spread throughout
Japan and has led to the present welfare commissioner and commissioned child welfare volunteers. In addition tothese, many charitable persons set up welfare institutions like orphanages, facilities for mentally disabled persons,and nursing homes for the elderly.
However, these systems were inadequate compared to the present system in terms of population coverage.
(Refer to Table 2.2)17

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Chapter 2 Overview of Social Security in Japan

Population and Social Security in Japan 2019In terms of medicine, the Meiji government decided to introduce Western medicine (mainly from Germany)and had developed a medical doctor license qualification system and educational institutions. The government
also constructed the mechanism of modern public health (for example, the Act on Prevention of Infectious
Diseases in 1897). The Maternal and Child Health Act was enacted in 1937. Based on this act, the “Maternal
Handbook” (presently, the “Maternal and Child Health Handbook”) began to be issued in 1942. The purpose ofthis handbook was to protect and promote the health of mother and child by recording health checkups (refer toTable 2.2).
2.1.3 After the End of World War II to Present (1945-2018)
The social security system in Japan developed dramatically after the end of World War II. During the social
turmoil just after the war, measures to assist the needy, improve nutrition, and prevent infectious diseases were
implemented, along with infrastructure development related to social welfare policies. In the Constitution of Japan
enacted in 1947, Article 25 stipulates the fundamental principles for developing a social security system, and thisserved as the foundation for social security-related laws created in the post-war era. In 1947, the Ministry ofLabour was separated from the Ministry of Health and Welfare to independently oversee labor policy (These
ministries were re-integrated in 2001 as the Ministry of Health, Labour and Welfare). In the same year,
unemployment insurance was also introduced.
During the rapid economic growth period that followed, the public pension and health insurance wereexpanded to cover more people, and the so-called “Universal Coverage in Public Pension and Health Insurance”
that extended to all citizens was introduced in 1961. The Act on Social Welfare Service for the Elderly and theMaternal and Child Welfare Act were enacted in 1963 and 1964, respectively, and benefits from various systems
were enhanced. The social security system was reviewed during the period of stable economic growth starting in
the late 1970s. Meanwhile, developing a social security system in response to the aging population became an
important challenge.
Since the 1990s, measures against the declining birthrate in addition to the aging society have surfaced as animportant policy issue. Pension and health insurance system reforms have been implemented. The Long-TermCare Insurance Act was introduced and amended five times to provide societal support to the elderly withlong-term care needs and their families. Enhancement of childcare services and financial support are being
promoted to assist in childcare. In addition, due to changes in employment and the widening differences in theeconomy, employment policies have also become important. (Refer to Table 2.2)

2.2 Social Security Schemes in Japan and Their Characteristics
A social security scheme is primarily a system that supports the people’s livelihood by providing necessary
support against conditions that lead to poverty, illness, injury, death, aging, and unemployment. There are various
social security schemes in Japan. The public pension system provides income security for the elderly, survivors,and disabled persons. Healthcare systems to protect public health include the health insurance, public health, andmaternal and child health systems. Meanwhile, social welfare for the elderly includes long-term care insurance,
while family policies include childcare services and financial support such as child allowance and support for
single-parent households. Policies for persons with disabilities include the provision of care services and financial

18

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Chapter 2 Overview of Social Security in Japan

Population and Social Security in Japan 2019support. Public assistance is available as part of the financial support system for the poor. As part of the system toprotect workers, employment insurance, work-related accident insurance, and others are available.
The benefits provided through these social security schemes are either in-kind or in-cash. Table 2.1 lists
major social security schemes by types of benefits and in-kind/in-cash classification based on the International
Labour Organization (ILO) classification standard.

Table 2.1 Schemes of Social Security
Benefit *SchemeFinance
In-kind In-cash
SocialPublic Pension*
Insurance
SocialHealth Insurance*
Insurance
Public HealthTax*
SocialLong-Term Care Insurance*
Insurance
Services for the Elderly(except for long-term careTax*insurance)

Sickness and HealthFamily Policy

Tax

*

*

Family Benefits

Policy for Persons with
Disabilities

Tax

*

*

Invalidity Benefits

Public Assistance

Tax

*

*

Employment Insurance
Work-Related Accident
Insurance

SocialInsurance
SocialInsurance***

Main Type of Function(ILO Standard)
Old Age, Survivors,
Invalidity Benefits

Sickness and Health
Old Age
Old Age

Social Assistanceand Others
Unemployment
Family Benefits
Employment Injury* Benefit does not show all kinds of benefits.

Many social security schemes in Japan adopt the social insurance system. There are five social insurance
systems, namely, public pension, health insurance, long-term care insurance, employment insurance, andwork-related accident insurance. Of these insurances, all citizens are enrolled in the public pension and healthinsurance programs. This universal coverage in public pension and health insurance is a main characteristic of theJapanese social security system. Furthermore, citizens aged 40 and over are covered by long-term care insurance,and employees are covered by employment insurance and work-related accident insurance.
The social insurance systems mentioned above are financed by social insurance premiums and supplemented
by tax revenue in the form of subsidies. Social insurance premiums are shared by all insured, in most cases,
according to their ability to pay (the level of income). Thus, the function of social insurance is to share the risk
among insured persons, and at the same time, to redistribute income among them.
On the other hand, other schemes such as public assistance (poverty alleviation measures in Japan) andservices/benefits for families, children, and the disabled are paid out of the general budget of the government(tax).

19

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Chapter 2 Overview of Social Security in Japan

Population and Social Security in Japan 2019

2.3 Administration Organizations and Service Providers
The Ministry of Health, Labour and Welfare (MHLW) holds jurisdiction over the social security systems. The
Ministry sets national standards and promotes projects deemed necessary to be implemented from a national
perspective. The Cabinet Office is in charge of planning governmental basic policy plans related to social security
such as population aging and childcare policy. Local governments such as prefectures and, notably, municipalities(cities, towns, and villages) execute and implement social security services. Local governments have social
welfare offices and public health centers. In recent years, decentralization has proceeded in the form of delegating
financial resources from central to local governments. This is based on the idea of “local autonomy.”
The social security system has many schemes. Beneficiaries and contributions have been managed separately,
but this has led to inconvenience for people and inefficiency in management. To solve these problems, the Social
Security and Tax Number Law was approved in 2013 and enacted in October 2015. A unique number is given to
all persons, including foreign residents, and companies in Japan. Paying maximum attention to privacy protection,
this “My Number” system is used for tax and social security service management.
Social security service providers such as hospitals and clinics for healthcare, daycare centers and institutions
for elderly long-term care, rehabilitation centers and support centers for the disabled, and so forth, can be bothpublic and private. However, private institutions are not allowed to gain profit and distribute it. Both public andprivate institutions are operated under the supervision of the MHLW and the local governments.

2.4 Financial Statistics of Social Security
Japan now collects and spends two sets of financial statistics for social security. The Social Expenditure ofJapan based on the OECD standard was 119.6384 trillion JPY in FY2016, which was 22.17% of the GDP and
942,500 JPY per capita. The Social Benefit based on the ILO standard, which does not include the costs nottransferred directly to individuals such as facility maintenance costs, was 116.9027 trillion JPY in FY2016, which
was 21.68% of the GDP and 921,000 JPY per capita. The ILO standard social security statistics can grasp the flowof revenue and expenditure in social security. Figure 2.1 shows a breakdown of social security revenue andexpenditure by this ILO standard. Insurance premiums account for 51.1% of the total revenue and 35.4% of taxes.
The expenditure for the public pension takes up around half of the entire expenditure, and for the medical care,around one third. As for expenditure by function, old age takes up around 50%.

20

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Figure 2.1 Diagram of Social Security Revenue and Social Benefit Based on the ILO Standards, FY2016[Revenue](Unit: Trillion of JPY,%)[Expenditure]
Category

Social Insurance

68.9

Pensions

54.4[51.1%]
Contribution from
Insured

36.5

Contribution from
Employers

32.4

Function

Expenditure
except for"Balance"
120.2
Social Security
Revenue
134.9

Medical Care
Taxes

38.4

Other Public
Contribution

33.2
14.6

Income from
10.3 [7.7%]
CapitalOthersFrom Reserve Fund
Others8.0 [5.9%]
6.5
1.4

55.6
[47.5%]

Sickness and
Health36.7[31.4%]

Social Benefit
116.9[32.8%]

47.7[35.4%]

State Contribution

Old Age[46.5%]

Welfare and Others
Other of w hich longterm care

24.1
[20.6%]
9.6

Family Benefits

6.8 [5.9%]

Survivors

6.6 [5.6%]

Inability Benefits

4.3 [3.7%]

Social Assistance andOthers3.9 [3.4%]

Unemployment

1.4 [1.2%]

Employment Insury

0.9 [0.8%]
0.6 [0.5%]

Housing

Administrative Cost

1.6

Administrative Cost

1.6

Others

1.7

Others1.7

Balance

14.8

Balance

14.8

Note:
1. "Others" in the Revenue includes transfers from the reserve funds, etc. "Others" in the Expenditure includes maintenance expenses for the facilities, etc.
2."Balance" refers to the difference between Social Security Revenue (134.9 trillion yen) and the sum of Social Benefit, administrative costs, operating losses, and others (120.2 trillion yen), and does
not include any transfer to and from other systems; in particular, balance represents transfers to the reserve fund and the balance carried forward to the following fiscal year 

21Chapter 2 Overview of Social Security in Japan

Population and Social Security in Japan 2019

Period and Year
593
718
Ancient
to the1642
Edo Era
1722
1791
1874
1897
1911
1922
Meiji Era
1929
to World
War II
1937
1938
1941
1946
1947
Just afterWorld
War II

1950s to
1970s

1949
1950
1951
1958
1959
1960
1961
1963
1964
1971
1973
1974
1981
1982

1980s to
2000

1990
1991
1995
1997
2000
2001

Since
2001

2003
2005
2008
2011
2012
2015

Table 2.2 History of Social Security in Japan
Main Events"Shikain" was set up by Shotoku Taishi (member of the Imperial Family)"Yoro Ritrsuryo" Act (showed mutual aid for the elderly, etc.)"Osukuigoya" was set up (relief institution in famine)"Koishikawa Youjojo" was opened (medical institute for the poor, Edo city)"Shichibu-tsumikin" (fund for relief for the poor, Edo city)
Indigent Person’s Relief Regulation
Act on Prevention of Infectious Diseases
Factory Law (an origin of the Labour Standards Act [1947])
Health Insurance Act
Poor Relief Law
Maternal and Child Health Act
National Health Insurance Act (amended in 1958), Social Services Act
Ministry of Health and Welfare was established
Labor Pension Insurance Act (present Employees’ Pension Insurance Act)
Public Assistance Act (old act)
Constitution of Japan
Child Welfare Act, Unemployment Insurance Act
Industrial Accident Compensation Insurance Act
Health Center Act (present Community Health Act)
Ministry of Labour was establishedAct for the Welfare of Persons with Physical Disabilities
Public Assistance Act (present act)
Social Welfare Service Act
National Health Insurance Act (Amendment of 1938 act)
National Pension Act (implemented in 1961)
Act for the Welfare of Persons with Intellectual Disabilities
Universal Coverage in pension and health insurance
Act on Social Welfare for the Elderly
Act on Welfare of Mothers with DependentsChild Allowance Act
Amended Act on Social Welfare for the Elderly (free medical service for the elderly)"Fukushi-Gannen" (improvement of social security benefit)
Employment Insurance Act (replacement of Unemployment Act)Act on Welfare of Mothers with Dependents and Widows (Amendment of Act on
Welfare of Mothers with Dependents)
Health and Medical Services Act for the Aged (new scheme to finance healthcare
costs for the elderly)
Major amendments of eight acts on social welfare
Act on the Welfare of Workers Who Take Care of Children
Basic Law on Measures for the Aging SocietyLong-Term Care Insurance Act (implemented in 2000)
Social Welfare Act (amendment of Social Welfare Service Act)
Ministry of Health, Labour and Welfare was established (re-integration of Ministry of
Health and Welfare and Ministry of Labour)
Basic Act for Measures to Cope with Society with Declining Birthrate
Services and Supports for Persons with Disabilities Act
Late-stage medical care system for the elderly (new scheme for health insurance for
persons aged 75 and older)"Kodomo Teate" (Child Allowance) under the Democratic Party Government
Child Allowance (present system by Liberal Democratic Party Government)
Act on the Independent Life Support for Needy Persons

22

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Chapter 3 Pensions

Population and Social Security in Japan 2019

Chapter 3 Pensions
3.1 History of pension in Japan
Like other advanced countries, the Japanese pension system was first introduced by the Army, the Navy, andthe authority for the civil servants. At the end of the 19th century, the Imperial Army’s Pension was started in April
5th 1875, followed by the Imperial Navy’s Pension in Aug. 24th 1875, which were united in 1890 and abolished in
1945. The pension of white color workers started later in 1884, and the pension of blue color workers’ in public
fields started in 1919. The military pensions required no individual contributions and was completely financed bygeneral revenue of the national government. The scheme was then expanded to civil servants. In those days, thepension (the old-age benefit ᜠ⤥) for military and civil workers was based on the salary just before the retirement,
and its level was generous. The disparity between the civil workers’ pension and private sector workers’ pension
had been large, and this was completely corrected only when the private sector workers’ pension (EPI: Employees’
Pension Insurance) and civil workers’ pension (Mutual Fund) were united in Oct. 2015.
The private sector’s employee’s pension started in 1942. In those days, the pension premium and benefit wasin proportion to the wages. In the beginning, the name of the private sector’s employee’s pension was Labour’s
Pension Insurance㸦ປാ⪅ᖺ㔠ಖ㝤㸧 which covered only male blue collar workers. However, after only one
year, the name changed to the Employees’ Pension Insurance㸦ཌ⏕ᖺ㔠ಖ㝤㸧 which covered female and whitecollar workers too. In those days, the contribution rate was 11% based on the perfect funding system. The
contribution rate was then reduced from 11% to 3% after WWII as poverty prevailed.
Why did the Japanese Government introduce the pension system for private sector’s workers during wartime?
The reason is clear. During wartime, the government needed controlled and stable manpower to maintain steadyproduction and to control inflation by reducing the household purchasing power through imposing pension premium.
The EPI was reformed in 1954 shifting from an earnings-related pension to a two-tier benefits system including
flat-rate benefits. As for the rest of the population, in 1961, National Pension was introduced for the self-employed,
fishermen/farmers, unemployed, house wives, and so on, thus the Japanese pension system achieved Universal
Coverage. In terms of the payment of contribution and the receipt of the benefit, National Pension has not changed
from how it was started.

3.2 Pension system overview
Nowadays, the Japanese pension system is multi-tiered, consisting of public and private pension schemes(Figure 3.1). In this booklet, the distinction between public and private pension is whether the insurer of the pension
is the government or not. The first tier is the Basic Pension (ᇶ♏ᖺ㔠), which provides the flat rate basic pensionof a universal coverage. As a non-income-related pension, it aims to provide a basic income guarantee for old age,and the participation is mandatory to all residents of Japan. The second tier, the Employees’ Pension Insurance (ཌ⏕ᖺ㔠ಖ㝤) covers most employees and is income-related in both premium and the benefit structure. Its provision
is mandatory to all corporations over a certain size, and the premium is shared by employers and employees. The
first and the second tier pensions are both operated by the government and thus are public.
The third tier is an optional scheme. It is provided either by private corporations (employers) for theiremployees (Employees’ Pension Funds), or by the National Pension Fund for the self-employed, for which the23

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Chapter 3 Pensions

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government is the insurer. The Employees’ Pension Funds are operated by employers, but has a large portion offinancial resources from the Employees’ Pension Insurance and thus has a quasi-public character. There are also
personal pensions operated by organizations such as private insurance corporations and trust banks, but these are
not covered here, as they do not fall under the category of a social security system.

Figure 3.1 Pension System in Japan

Note:*1 In response to the integration of the Employee's Pension Schemes, public officers and private school teachers joined Employees' Pension from
October 1, 2015. Moreover, the portion added according to job category in Mutual Aid Pension was abolished and retirement benefits payment inpension were newly introduced. However, as for the portion for the subscription period of Mutual Aid Pension by September 30, 2015, the portion
added according to job category is paid according to subscription period even after October 2015.
*2 Category-2 insured person, etc. refers to the insured persons of EPI (including beneficiaries aged 65 years or above of pension benefits for old-age
or retirement in addition to Category-2 insured person).
Source: Annual Health, Labour and Welfare Report 2017, https://www.mhlw.go.jp/english/wp/wp-hw11/dl/11e.pdf

Similarly, the Basic Pension for the self-employed, farmers, and other non-employed (Category No.1 Insurer)
is called the National Pension (ᅜẸᖺ㔠), which is now operated by the Japan Pension Service (᪥ᮏᖺ㔠ᶵᵓ)under the responsibility of the government. Thus, the entire adult population, in principle, is insured either by the
Employees’ Pension Insurance, the National Pension, or the Mutual Aid Pensions.
The coverage of the Basic Pension is universal, i.e. it is intended to cover all residents 20 years old or above
in Japan including foreigners. For the National Pension, the eligibility to receive pension benefit requires aminimum of 10 years of premium payment, and the maximum enrollment period is 40 years.

3.3 Pension system financing
There are three resources for financing pension; the premium, the government subsidy, and the reserve.
Concerning the premium, in case of the Employee’s Pension Insurance, the premium is paid by both employees
and employers, and is set at a fixed rate of the salary (see the table on pp. 20-21). The premium also covers the24

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dependent spouse who earns less than 1.3 million yen per year (called No.3 insured). In case of the National Pension,
the premium is paid by the insured only, and is a flat rate for all. Both husband and wife have to pay the premium
if he/she is not working as employees.
As for the government subsidy, for the first tier (Basic Pension), 50% of the benefits and all of administrative
costs are paid from the general budget of the government. For the second tier (Employees’ Pension Insurance), theadministrative costs are paid by the central government. For the third tier, there is no subsidy from the government.

3.4 Pension system by scheme
3.4.1 The National Pension
As described above, all residents in Japan between ages of 20 to 60 are eligible and required to become asubscriber of the Basic Pension. The amount of pension payment varies depending on the enrollment period andcan be calculated as follows.
     ¥779,300  ( (insured months + 1/2  exempt months ) / 480 )Whereas employees who are covered by the Employees’ Pension Insurance are automatically enrolled in the
Basic Pension, those who are not employees are covered by the National Pension. A fixed amount (¥16,340 per
month in 2018FY) is levied on each subscriber to the National Pension as a premium (37.5% of Category 1
subscribers are fully exempted and 2.8% are partially exempt from paying premiums as Japan Pension Service
Statistics). Current benefits are paid out of currently collected premiums (pay-as-you-go system), but as much as
one half of the benefits are subsidized from the general budget of the government. The benefit is flat rate to all, andthe scheme is a defined-benefit scheme.
Due to the impact of the recent economic downturn, the National Pension is facing an issue of contribution
evasion, especially among younger people. However, with the introduction of a multi-level premium exemption
system in 2002, some subscribers can prepare for future pensions by using a partial waiver program. As a result, theaverage monthly pension benefit by the National Pension amounts to ¥55,518 in 2017, which is around 85% of thefull amount. As the system becomes more mature, this amount may increase.
3.4.2 The Employees’ Pension Insurance
The Employees’ Pension Insurance forms the core of the income security for retirees. All workplaces withmore than five employees and their employers are required to participate in this scheme. Both employers andemployees contribute 9.15% 1 of employee’s monthly salary as premiums (including a premium for the National
Basic Pension), and the pension benefit is income-related. There is no discount system for low-income
persons/household (or his/her employer), but employers of those who are on maternity leave (up to 1 year) are
exempted from paying premiums 2.
The average monthly pension benefit by the Employees’ Pension Insurance is about ¥144,903, which amounts
to 46.7% of the average monthly salary of subscribers (2017).
1

The premium rate applies to monthly salary as well as bonus.
Employees who are on maternity leave typically do not receive salary, except unemployment benefits (40% of their pay), and thus
do not need to pay a premium. The duration of maternity leave is counted as insured months in calculating a benefit level.

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3.4.3 National Pension Fund
The National Pension Fund is an optional pension for the self-employed (Category No.1), and is designed togive additional pension coverage to the self-employed who do not have the third-tier pension (Employees’ Pension
Insurance). However, only about 3% (0.43 million) of Category No.1 subscribers (16.68 million) are currently
subscribing to the Fund.

3.5 Pension system reforms
3.5.1 Change of third-tier pension schemes since 2000
In line with the introduction of international accounting standards in 2000, the third-tier pension schemes
underwent a major reform. The Employees’ Pension Fund was streamlined, and instead, the Defined-Benefit
Corporate Pension (2001) and Defined Contribution Plan (2002) were newly established. The principal reason for
the introduction of these schemes was to accurately reflect a firm’s outstanding pension liabilities in the financial
statements. The Defined Contribution Plan, in particular, facilitates the portability when changing jobs and responds
to changes in the employment situation.

Figure 3.2 The transition of Employee’s Pension Fund,
Defined Benefit and Defined Contribution member
12,000

Employee's Pension Fund
Defined Benefit

Thousand persons

10,000Defined Contribution

8,000
6,000
4,000
2,000
0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: The Data on Corporate Pensions (௻ᴗᖺ㔠࡟㛵ࡍࡿ㈨ᩱ), Pension Fund Association, 2012

As shown in Figure 3.2, the number of subscribers to the Defined-Benefit Corporate Pension and DefinedContribution Plan (corporate type) are on the increase, while that of the Employees’ Pension Fund has steadily been
decreasing.
The defined-contribution (DC) pension schemes have two types: individual-based and corporation-based. The
individual-based defined-contribution scheme is for self-employed persons (Category 1 subscribers) and is designed
to give optional pension coverage to the self-employed. It is operated by the National Pension Fund Association,and its premium is paid by the subscribers themselves. The second type of the defined-contribution pension schemes,
the corporation-based DC pension, is a type of corporate pensions. Corporations may provide this type of pensions

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to its employees. The premium is entirely borne by the employer.
Corporations welcomed the introduction of DC schemes and many have shifted from the Defined-benefit (DB)corporation pension to the DC corporate pension. This is because corporations are realizing a huge burden of future
pension payments, which is now labeled as liabilities under the new accounting system. Suffering from low-returns
on their funds, corporations are eager to convert their DB pension schemes to DC schemes, in which future payments
are related to the investment performance of funds, as opposed to the current system in which future payments are
fixed at the beginning.
However, in the UK, there was a noticeable trend to convert to DC schemes in recent years, by closing the DB
plan and providing the DC plan to new subscribers. But because a DB scheme is of value to the employees, andcould serve a firm to differentiate itself from others when hiring new employees, business owners are shifting to a
stance to maintain the DB scheme while also pursuing a more economical approach. As shown in Table 3.1, the DB
and DC schemes both have their advantages and disadvantages, and it is desirable for both management and labor
to consider which to adopt.

Table 3.1 Comparison of Defined-Benefit (DB) and Defined-Contribution (DC) Plan Characteristics
DB PlanParticipants have no control over theinvestment of pension money.

DC PlanUsually participants make their investment
decisions

Dominant Plan
DC

Investment Risk

Participants do not need to bear investment
risk.

Participants have to bear all investment risk.

DB

Investment Returns

Participants can only collect the benefits
defined in the DB formula even if theinvestment has favorable returns.

Participants are entitled investment returns.

Not Clear

Termination Portability

Participants could rollover and keep investing DC
Participants leaving their job forfeit future
investment savings.
indexation of benefits already accrued.
Participants have greater incentive to sustain a Participants have less incentive over theirDBhigh level of effort over the entire career inentire life than in the DB plan since their DC
order to achieve high career-end salary.
benefits depend upon the wage trajectory overtheir entire life.

Investment Choices

Incentives

Wage-Path Risk

Benefits tied to wage used in the formula,mostly the final wage.

Benefits tied to career average earnings.

Life Annuity

Usually offers life annuity with favorable
mortality rates

DB
Most DC plans’ distribution is lump sum.
Participants might face unfavorable mortality
rate when purchasing annuity in market due toadverse selection problem.

Not Clear

Source: Tongxuan (Stella) Yang (2005), "Understanding the Defined Benefit versus Defined Contribution Choice," Pension Research Council
Working Paper, Pension Research Council

3.5.2 Consecutive pension reforms
Aggravated by rapid aging, a low rate of economic growth, and near-zero interest rates, the National Pension
and the Employees’ Pension Insurance are facing difficulty in securing enough funds to meet the future burden ofpension benefits. Various reforms to guarantee the sustainability, including the cutting back of future benefits,
raising of premiums, or raising the pensionable age had taken place in order not to put too much burden on the
future generations.
Recent reforms were made in 2004, 2009, and 2012. The reform of 2004 was as follows,‫ۑ‬Reviewing the benefit payment and contribution27

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Chapter 3 Pensions

Population and Social Security in Japan 2019(Introducing the insurance premium level fixation method and the macro-economy indexation, utilizing thepension reserve as resource funds, and raising the proportion funded by the national subsidy for the Basic
Pension to 1/2. (* This will be implemented gradually as specified in the law.)‫ۑ‬Reviewing the system of the Old-Age Pension for Active Workers(Reviewing the system of the Old-Age Pension for Active Workers who are in their early 60s, introducing
the system of delaying pensionable age for those who are 65 years or over, and adjusting the amount ofbenefit payment of the Old-Age Employees’ Pension for those insured employees who are 70 years andolder.)‫ۑ‬Enhancing measures for the insured who engage in childcare(Exempting premium payment for those who are on child-care leave and adjust the standard monthly
remuneration during the childcare period)‫ۑ‬Reviewing the Survivors’ Pension system‫ۑ‬Introducing the division of benefit payment and of the duration to be No.3 insured category in cases such as
divorce.
Due to the political confusion, the reform of 2009 remained minimal and only the national subsidy proportionof the basic pension is raised to 1/2. Instead, the reform of 2012 was a major one and the contents were as follows,
Implementation
from

Reform details‫ۑ‬The minimum requirement period for the premium payment is reduced from 25
years to 10 years‫ۑ‬The national subsidy ratio is set permanently 1/2 for the basic pension‫ۑ‬Expanding the application of Employees' Pension Insurance to part-time workers‫ۑ‬Premiums are exempted during maternity leave‫ۑ‬The survivor's basic pension is paid to the motherless family‫ۑ‬The employee pensions(EPI, Mutual Aid Pensions) is made to be uniform one‫ۑ‬The pensioner support benefit is paid to the lower pensioner

Oct. 2014
Apr. 2014
Oct. 2016
Apr. 2014
Apr. 2014
Apr. 2015
Apr. 2015

3.6 Current issues of pension system
3.6.1 Non-compliance and difficulties of the National Pension
As noted before, one of the biggest problems of the National Pension is that there are a growing number of
eligible and required persons who have not paid the premium in full. According to the survey in 2009, as much as
0.33 million persons have not subscribed to the National (Basic) Pension at all. In addition, in 2009, the ratio of
persons who fully paid the monthly premiums was only 60.0%. The unpaid premium is especially found among theyounger generation. To raise the compliance, the government had put in place a mechanism to exempt paying
premiums for low-income persons. In 2006, the four-level exemption status was introduced, where previously there
were only two levels. However, the number of people fully exempted from premium payment reached 5.21 million,
and partially exempted was 0.52 million people. Of these people, if we exclude students (1.65 million people) andthe legally exempted such as the disabled (1.14 million people), about 11.9% of persons required to pay a premium
are exempted, which is placing a heavy burden on National Pension finances. Every effort is being made at central,28

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Population and Social Security in Japan 2019prefectural, and municipal government levels to increase the premium payment rate.
3.6.2 Financial pressure on corporations
At the same time, corporate pension schemes are also facing a number of problems. The first problem isfinancial. Not only did the continuing recession of the Japanese economy and a very low interest rate make it difficult
for corporations to keep defined-benefit corporate pensions, but it has also made it difficult for some corporation tokeep paying the employers’ contribution for the Employees’ Pension. It is required by law to participate in the
Employees’ Pension Insurance for corporations of certain sizes and over, but some corporations have taken a drastic
measure to dissolve their Employees’ Pension Insurance, and make their employees subscribe to the National
Pension, which does not require employers to share a part of the premium.
3.6.3 Accommodating various employment arrangements and life-styles
As mentioned before, the traditional Japanese working pattern of life-long employment with a single employer
has been gradually diminishing. Many people now switch jobs and thus their pension status; therefore, change overthe life-course. The pattern is more evident among women who tend to leave and re-enter labor force during raisingchildren. Thus, it is becoming increasing harder to put in the required payment period for pension premiums. For
the National Pension, to get the full benefit, one has to pay the premium for 40 years, and the Employees’ Pension
Funds also have, albeit shorter, required premium paying periods. Many people, especially women, are unable toput in the required duration, and are not qualified to get the full amount.
There has been also a big shift of employment arrangements from full-time to part-time, especially among
women workers. However, the Employees’ Pension does not include part-time workers, and many women adjust
their working style in order to remain as Category No.3 (dependent spouse of subscribers of Employees’ Pension).
The 2004 Reform did not actually implement measures to correct this, but it has mandated the government to review
and take necessary action within five years.
The 2004 Reform implemented the following changes to accommodate the changing life-styles: 1) extending
the period of premium exemption for those taking maternity or paternity leave from one year to three years, 2)
making it possible to divide the pension benefit of the Employees’ Pension between husband and wife if they divorce,and 3) putting a time limit of five years for survivor’s pension benefit for widows (widowers) younger than 30 years
old and with no children.
Currently, 83.9% of all Japanese corporations offer retirement packages for their employees. A retirement
package can be either a one-time lump-sum retirement allowance, or a life-long or limited duration pension, or both.
The breakdown shows 26.8% of corporations combine lump-sum payment and pension, 10.7% offer pension only,
and 46.4% offer lump-sum payment only. Even though the pension is gradually spreading its share, the traditional
style of the lump-sum allowance is still the mainstream, and most employees choose to take a part or the entire
amount of the retirement money as the lump-sum payment. In any case, it will be important for the private andpublic sectors to work together to offer pension and retirement benefit schemes that respond to increasingly diverse
lifestyles.

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3.6.4 Pension system adaptation to the globalized world
Due to the increasing number of foreigners living and working in Japan, or Japanese abroad, theinternationalization of the pension system is required. The minimum requirement period for the premium payment
was shortened from 25 years to 10 years in August 2012. Also, Japan had concluded social security agreements withother countries with an aim to resolve issues related to dual-enrollment in social security systems and international
calculation methods of pension enrollment period. Currently in 2013, Japan has signed the social security agreementwith 17 countries and is under negotiation or preparing to begin negotiation with 8 countries, as listed in Table 3.2.
The number of countries entering the agreement is expected to increase in line with developments in the economy,
globalization, and implementation of social security systems in developing countries.

Table 3.2 Status of International Social Security Agreements
Implemented

Germany, U.K., Republic of Korea, U.S.A., Belgium, France, Canada,
Australia, Netherlands, Czech Republic, Spain, Ireland, Brazil,
Switzerland, Hungary, India, Luxembourg, Philippines

SignedItaly, Slovakia, China

Under negotiation

Sweden, Turkey, Finland

Under preparatory negotiation

Austria, Viet Nam

Source: Ministry of Health, Labour and Welfare website at;https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/nenkin/nenkin/shakaihoshou.html (accessed on 22 Feb. 20)30

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Chapter 4 Health Care
4.1 Introduction
The health care service system in Japan is delivered by mandatory, nonprofit public health insurance systems
and by nonprofit service providers. Japan’s public health insurance system is composed of three types of healthinsurance: occupation based and municipality based, and a separate system for people aged 75 years old and over.
Every resident in Japan must belong to the public insurance system as an enrollee. Health services are provided by
not only public providers but also private ones, which satisfies the “nonprofit” principle. Patients enjoy “freedomof choice,” meaning that they can select and contact physicians in any medical institution, including outpatient
departments of hospitals. The cost of medical care is financed through insurance premiums, tax revenues, andco-payments. The elderly, infants, and low-income people are completely or partially exempted from co-payments.
Other people must pay co-payments that are 30% of the total medical cost when they use medical services. The
maximum amount of co-payment is determined based on the income level and age of patients. The sustainabilityof the system depends on whether the inter-institutional redistribution of the burden can work and whether enoughhuman resources are available to provide services to users.

4.2 Public Health Insurance
4.2.1 History
The health insurance system in Japan has been continuously developing since the 1920s. First, the Health
Insurance Act was enacted in 1922, but the Great Kanto Earthquake in 1923 delayed the enforcement of the law
until 1927. This public health insurance covered “blue-collar workers in factories and mines. Next, the National
Health Insurance Act was enacted in 1938. This law widened the coverage of public health insurance to not only
farmers but also the general public not covered by health insurance law. The National Health Insurance Law
prescribed that municipalities could be insurers of national health insurance for the people living in their regions.
However, the law also stated that municipalities could choose not to establish a national health insurance systemand that people were free to make the decision to enroll or not to enroll in public health insurance. Hence, somepeople remained without insurance. From 1939 through 1941, other public health insurance laws started to cover“white-collar workers, including government officials. Furthermore, the public health insurance system started tocover seamen based on the Seamen’s Insurance Act of 1940. In sum, before WWII, the public health insurance
system in Japan was gradually developed by enacting different health insurance laws for each sub-group insociety.
Public health insurance developed further after WWII. Laws on public health insurance that had been enacted
before the end of WWII were consecutively implemented after the war. Hence, public health insurance began toassume prewar characteristics.

Each public health insurance law regulated its own financial budget;

therefore, the laws’ management was independent of each other. More important, the lack of laws forcomprehensive health insurance coverage led to the existence of noninsured people. This issue was resolved by
the implementation of the new National Health Insurance Act in 1961, through which Japan attained universal
coverage. This act mandated all residents in Japan to enroll in national health insurance, except in cases where
they had already enrolled in other public health insurance systems.

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The next issue in the development of public health insurance was the improvement of insurance benefits andelimination of inequality in insurance benefit through different schemes. In the early 1960s, expensive antibiotic
drugs, some steroid drugs and drugs for chemotherapy were prohibited by the public health insurance system. This
restriction was abolished in 1962, raising health care costs. However, the expanded cost could be absorbed into the
expanded financial surplus in the public health insurance system thanks to the high rate of Japan’s economic
growth.
In the early 1960s, the co-payment rate was 50% for all enrollees in national health insurance, and 0% for thehead of the household (principal enrollee) in society-managed health insurance and association-managed healthinsurance. Thus, the amount of the subsidy from the government to national health insurance insurers wasincreased to lower the co-payment rate for enrollees in national health insurance.
The burden of co-payment tended to be larger for patients with severe diseases or chronic diseases. In the
1960s, municipalities started to subsidize the elderly (over 70 years and older) so that their co-payment rates
became 0%. This subsidy became universal in 1973. For people less than 70 years old, a high-cost medical carebenefit system was introduced in 1973 to cap the burden of co-payment.
In the early 1970s, the oil crisis hit the Japanese economy. To prevent rapid price increase, the government
implemented policies to control economic activities, such as cutting public spending. These policies weresuccessful, but then there was a recession next year. It reduced the financial revenue of the government as well as
the premium revenue of public health insurance system insurers. The government started to fill the annual
financial gap by issuing national bonds and reducing government spending. Social security spending also started
to be contained, along with government subsidies.
Despite the reduction in social security spending, health care expenditure for the elderly was rapidly
increasing. One of the reasons for this was the government subsidy for co-payments for the elderly. The healthcare cost for the elderly increased from 40 billion yen in 1973 to 67 billion yen in 1974 and to 87 billion yen in
1975. After 1975, the growing rate of health care expenditure was also very high. To contain the rapid cost
increase, a new health care system for the elderly was needed. However, the cost increase was not the only reason
for the introduction of the new system. At the time, the elderly could only utilize medical care services, notservices for health promotion, preventive measures such as health check-ups, or rehabilitation. These services, incollaboration with medical care, needed to be supplied in a more integrated manner. Hence, in 1983, a healthservice system for the elderly was introduced. Per-diem-basis co-payment was introduced for medical careutilization.
The health service system for the elderly is a part of inter-institutional fiscal adjustments with respect tohealth care cost for the elderly. Since the mid-1980s, cost containment policies have been employed. Inequality inco-payment rates between different public health insurance systems was equalized to 30% in 2003.
Inter-institutional fiscal adjustments with respect to health care cost for the elderly were strengthened, and the oldsystem developed into a medical care system for the elderly in the latter stage of life in 2008.

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4.2.2 Public health insurance system: TodayAs stated before, Japan’s medical services are financed through a public mandatory health insurance system,
which is composed of three types of public health insurance: occupation based and municipality based, andseparate health insurance for people aged 75 years old and over. The elderly aged 75 or over enroll in publichealth insurance, which is called the medical care system for the elderly in the latter stage of life. Those who are
below 75 years old enroll in occupation-based public health insurance or national health insurance. There arethree types of occupation-based public health insurance. One is health insurance for workers at firms of a certain
size; these are called society-managed health insurance. Large companies have a duty to establish firm-based
nonprofit public health insurers to provide public health insurance coverage to their employees. For those whowork at smaller firms, the Japan Health Insurance Association, a public association for health insurance, provides
collective health insurance, which is called association-managed health insurance. Additionally, people in special
professions such as civil servants, private school teachers and employees, day laborers, and seamen, form
separate nationwide professional associations.
Those who are below 75 years old and are not covered by occupation-based public health insurance arecovered by a national health insurance. Before April 1, 2018, national health insurance insurers weremunicipalities and local governments, which are closest to their communities. The national health insurance
covered self-employed people, workers engaged in agriculture and forestry and fisheries, workers in small
businesses, the unemployed, and pensioners. After April 1, 2018, prefectures, the second-tier local government inJapan, became collaborative insurers in municipalities.
These public health insurers provide universal coverage for Japanese population. The outline of each system
is shown in Table 4.1 (located at the end of this chapter). National health insurance covers 27% of the total
population, association-managed health insurance covers 29%, society-managed health insurance covers 23%, andthe medical care system for the elderly in the latter stage of life covers 13%.
Insurance benefits are standardized throughout all public health insurance schemes, as shown in Figure 4.2.
The extent of the medical services covered by public health insurance is discussed by the Central Social Insurance
Medical Council, whose members consist of representatives of clinical physicians and hospitals, public healthinsurance insurers, and the general public. The council also discusses official tariffs for medical services. Basedon the council’s suggestions, the Ministry of Health, Labor, and Welfare decides the coverage and prices of
medical services.

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Figure 4.2 The structure of health care coverage by and beyond public health insurance
Advanced medical research

Advanced medical

Hospital facility fee

Medical checkup
Cash benefits(sickness and injury,
childbirth allowance,
etc..)
Prevention/
HealthMaintenancecare

Meal expense
duringhospitalization

Medical Services

Massage, acupuncture, etc.

Special room fee

co-payment

Uninsured dental
care, etc.

OthersNon-prescription

Special meals
High Quality
Environment

Health service facility fordrugs

the elderly, Medical cost

Facility fee

Co-payment
Medical services at home

NursingLong-term
medical care

Nursing AttendantsLong-Term Care/Welfare= Medical costs covered by public health insurance= Other medical costs

4.2.3 Financing of health insurance
Generally, an individual’s health care expenditure becomes higher as he/she ages. This is also true in Japan.
Hence the average health care expenditure per enrollee is highest in the medical care system for the elderly in thelatter stage of life (¥844,382/year) because individuals who are more than 75 years old are enrolled in it, as wehave already explained. Most individuals aged between 65 and 74 enroll in national health insurance, and theaverage health care expenditure per enrollee is ¥300,229/year, higher than the expenditure in otheroccupation-based health insurance systems. The costs of health benefits in public health insurance reflect thisdifference in enrollees’ age structure, as shown in the upper part of Table 4.3.
Table 4.3 Financial situations of public health insurance systems (year 2015)

Insurance benefit expenses
Late-stage elderly support coverage
Levies for early-stage elderly
Contributions for retirees
Others
Total
Premium (tax) revenue
State subsidy
Late-stage elderly subsidy
Early-stage elderly subsidy
Others
Total
Balance of ordinary
revenue and expenditure

Government-managed
Health Insurance/ JHIA- Society-managed Health National Health Insurance
managed Health
Insurance(municipalities)
Insurance
145,197
133,059
300,229
47,67856,641
56,15039,80550,182
57
4,467
5,600
4,930
21,972
147,665
266,217
267,453
504,101
236,678
267,281
92,72235,7501,164
129,231

Seamen's Insurance
217,500
53,333
31,667
5,833
55,000363,333
300,833
25,000Late-stage medical caresystem for the elderly
853,473

4,199
857,672
64,963
432,533
354,329382
272,810

17,875286,321

109,358
186,006
502,319

54,167
380,000

1,416
853,242

6,592

18,868-1,782

17,500-4,424

Unit: Yen per enrollees
Source: Ministry of Health, Labor and Welfare (MHLW), “Annual Health, Labor and Welfare Report 2017”34

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Public health insurance schemes are financed by premiums, subsidies from the general budget of thegovernment, and co-payments from patients. Insurance premiums are one of the main financial resources for
public health insurance. The methods of premium collection are different among public health insurance schemes.
Occupation-based public health insurance insurers collect premiums by deducting them from salaries. The lower
and upper limits of the premium are set at 30/1000 and 130/1000, respectively. The national health insurance
premium is collected through direct payment to the municipality government by subscribers on a household basis.
The premium consists of a proportional part based on the income, assets, and number of people in the household,and it constitutes a fixed part per household. Insurers in the medical care system for the elderly in the latter stageof life collect premiums mainly by deducting them from the pension paid to the elderly.
Central, prefectural, and municipal governments subsidize national health insurance insurers for their runningcosts. The central government subsidizes 41% of the health care benefits, and prefectural governments subsidize
9% of that. This amounts to ¥129,231 per enrollee, as shown in Table 4.3. In case the insurance finance faces a
deficit, the managing municipality will bear the cost as a form of subsidy to the insurer. This amount is included in
the “others” category of the revenue in Table 4.3.
Table 4.3 shows that insurance benefit cost is higher in national health insurance and the medical care system
for the elderly in the latter stage of life, but the premium revenue is lower in these two insurance systems. This
causes a fiscal imbalance in these two insurance systems. To adjust the fiscal imbalance, inter-institutional fiscal
adjustments have been introduced. Under this scheme, health care cost burdens for the elderly aged between 65
and 74 are reallocated among the insurers of public health insurance. The amount that the national healthinsurance receives from this fiscal adjustment is ¥109,358 per enrollee.
The medical care system for the elderly in the latter stage of life for those aged 75 and older can itself be
regarded as a scheme for inter-institutional fiscal adjustments. The elderly aged 75 and older are enrolled in thissystem, and they must pay premiums. This premium finances 10% of the medical costs. Of the remaining 90%,
50% is covered by central and local government subsidies, and 40% is covered by contributions from insurers ofother insurance programs. The amount that the medical care system for the elderly in the latter stage of life
receives from this fiscal adjustment is ¥354,329 per enrollee.
Table 4.3 does not show co-payments, but the total co-payment amount is not negligible because theco-payment rate is basically 30% for public health insurance systems in Japan. Payments are made every time avisit is made to a medical institution. The co-payment rate varies according to patients’ age and income, such as
20% for children below school age, 30% for the high-income elderly who are more than 70 years old and whoearn the same level of income as the working generation, and 10% for most of the elderly who are more than 75
years old. The statutory co-payment rate is 20% for the elderly aged between 70 and 74 whose income levels are
not very high. However, the co-payment rate for these people has been temporarily kept at 10%obilizing abudgetary measure.
The high-cost medical care benefit is applied to all public health insurance. This system aims to restrict theco-payment amount by setting a cap according to age and income. The insurer bears the difference between thecap and the payable co-payment amount. The cap amount is set lower for low-income earners. For example, themonthly cap for a low-income earner aged under 70 is ¥35,400, and under the medical care system for the elderlyin the latter stage of life, low-income earners only pay up to ¥8,000 for outpatient treatment and up to ¥24,600 for35

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hospitalization.
4.2.4. Problems with public health insurance financing
As the population rapidly ages, health care costs for the elderly increase accordingly. This automaticallyincreases occupation-based insurance’s burden of subsidy in the medical care system for the elderly in the latterstage of life. The increased burden should be covered by an increased amount of insurance premium in those
insurances. However, insurers’ financial situations can vary, and the burden may be too heavy for some insurers.
To make the burden more equitable, the policy to determine the subsidy amount based on the total amount ofenrollees’ income has changed. According to the new policy, insurers of occupation-based health insurances raise
premium rates only when their premium level is too low for the income level of their enrollees.
National health insurance has a larger number of lower-income subscribers and elderly subscribers thanoccupation-based health insurance. As a result, relatively poorer enrollees are confronting relatively higher
premium rates. This is leading to an increase in unpaid insurance premiums in national health insurance. In 2016,
the amount of unpaid insurance premium was 8.08% of the total amount of levied premiums. In the social
insurance system, an unpaid insurance premium means losing one’s eligibility. To avoid this, target groups forpremium payment exemption have been enlarged. Further, extremely poor households are now guaranteed accessto medical services without the payment of premiums, based on the public assistance system.

4.3 Service Provision
4.3.1. Overview
The fundamentals of medical care provision systems were constructed before WWII. Management of
medical institutions satisfies the “nonprofit” principle. Owners of medical institutions can include public andprivate entities Medical doctors are educated using a six-year university education program and trained using afive-year training program after graduation. They can educate themselves to deepen their clinical specialties.
General practice has not been explicitly recognized as a clinical specialty, so there are no general practitioners
who are clinical specialists. There is no gatekeeping system. Patients can choose the medical institutions theywant to visit. Therefore, the roles of community clinics and specialized hospitals are not separated. A patient canchoose for his or her first contact a specialist in a hospital outpatient department. In the mid-1970s, theco-payment rate for the elderly was set at 0%. Evidently, this inflated the usage of medical care among the elderly.
However, this was a drastic measure taken because of the scarcity of long-term care facilities in those days. The
0% co-payment rate was abolished in 1983, and the efficiency of the provision of inpatient care services for theelderly has been improved by amendments to the medical institution law together and by the implementation ofpolicies for increasing the number of long-term care facilities, as well as by policy inducements though changing
tariffs for medical care services The introduction of long-term care insurance created many alternatives for theelderly who needed life support services other than inpatient care in hospitals. Today, the issue is how tocoordinate medical care and long-term care.

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4.3.2 Health care service provision: History
Before the Meiji era, physicians existed in Japan who were called “kusushi” because of their oriental
medicine practices. They made diagnoses, prepared prescriptions, and sold the pharmaceutical medicine topatients. However, they were forbidden from practicing medicine by certification regulations implemented byphysicians educated using Western medicine in the Meiji era.
Medical doctors sold pharmaceutical medicine to patients based on Western medicine practices. This was
because there were few pharmacists in the Meiji era Pharmacists hoped to achieve the separation of medical
practice and drug dispensing, but they were not successful because of their weak political power.
Hospitals practicing Western medicine were first established in Nagasaki in 1861. The number of hospitals
increased to 106 in 1878. Hospitals were established by the central government, local governments, and private
citizens and organizations. In those days, there was no public health insurance. Hence, poor people could notaccess medical care services. The Japan Red Cross was established as the Hakuai-sha in 1878, and the Social
Welfare Organization Saiseikai Imperial Gift Foundation (The Saiseikai) was established in 1911. These
organizations constructed hospitals and started to provide medical services to the poor.
In those days, physicians could start a private practice where they preferred (this was known as free entry).
Hence, medical institutions were located in dense urban areas because medical doctors, as managers of the
medical institutions, wanted to keep their financial status high. This made accessibility to medical care unequal
across geographic areas. In rural areas, for example, physicians could not earn enough because farmers wererelatively poorer than other people and could not pay for medical care services. At the same time, physicians werereportedly so competitive in urban areas that they could not earn enough either.
After WWII, hospitals and clinics lost equipment personnel, and even buildings because of the war. To
increase the supply of medical care services, various policies were employed. Medical institutions controlled by
the Department of the Navy and the Department of War were merged into the hospital department of the Ministryof Health and Welfare, and these medical institutions were made available for use by the general public in theform of national hospitals. The central government of Japan decided to provide financial subsidies to private (butnot-for-profit) medical institutions for investment in hospital/clinic construction and/or medical equipment.
Because of these policies and the effects of long-lasting economic booms, the number of private hospitals andclinics increased.
Local governments, as was the case before WWII, established hospitals and clinics. The Japan Red Cross,
the Saiseikai, and other nonprofit organizations also established medical institutions. These new investments
contributed partly to the gradual improvement of the distribution of medical institutions. However, there was noeffective method to resolve essentially the issue of the geographical inequality of the medical institutions’distribution. In the mid-1980s, it was pointed out that regional variations in inpatient care cost were correlated tothe supply of inpatient beds. In 1985, the medical institutions law was amended so that the government could
specify areas where inpatient beds were over-supplied relative to the population.
Among the amendments to the medical institutions law since then, the second amendment to the law
introduced the hospital categorization of “special functioning hospitals” and the bed-type categorization of“long-term care-type beds” in 1992. Special functioning hospitals was a classification of hospitals that provided
high-technology and intensive inpatient care. The bed-type categorization of long-term care-type beds was37

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introduced because the utilization of beds was not necessarily based on medical needs. In those days, as we haveseen in section 4.2.1, the co-payment rate for the elderly was 0%. This policy made patients who needed support
for living rather than medical care utilize inpatient care unnecessarily.
The long-term care insurance law was enforced in 2000. Since that time, utilization of most long-term carebeds was reimbursed not by public health insurance, but by long-term care insurance. With the introduction of
long-term care insurance, patients who had relatively less need for inpatient medical care were induced to use life
support services.
Acute inpatient care was also reformed so that services could be more efficiently supplied. In 2003, diagnosis
procedure combination (DPC) was introduced on a trial basis” as a classification tool for diseases. The
reimbursement system for acute inpatient care started to use the DPC in 2006. Reimbursement based on DPC is
made on a per diem basis. Hence it has no direct effect on shortening the average length of stay.
4.3.3 Health care service provision: Today
One of the characteristics of the Japanese health care system is the availability of beds and the long durationof stay in medical facilities. By definition, according to medical institution law, clinics can have less than 20 beds,
while hospitals must have 20 beds or more. In 2017, there were 8,412 hospitals, 101,472 clinics, and 68,609
dental clinics in Japan. The number of beds in hospitals was 1,554,879 (12.3 beds/1,000 people), and the numberof beds in clinics was 198,355 (0.78 beds/1,000 people). The average length of stay in the hospital was 28.2 days
for hospitals, which is much longer than eight days for OECD countries.
Second, there exists no explicitly defined general practitioner so Japan essentially has no gatekeeping system.
Medical doctors are educated about medicine in six-year undergraduate courses. They must also pass the National
Medical Practitioners Qualifying Examination. After this, they are trained as medical doctors in a five-year
postuniversity education course. After finishing the postuniversity education course, they are educated as
specialists in their clinical specialty. The total number of medical doctors working in medical institutions is304,759 (2.4 people/1,000 people), the total number of medical doctors working in hospitals is 202,302, and thetotal number of medical doctors working in clinics is 102,457. There are almost none foreigners working as
clinical medical doctors: 1,595 in hospitals and 755 in clinics.
Third, there are no nationally qualified nurse practitioners who can practice nursing care independently. The
number of registered nurses working in hospitals is 796,830. They can work as registered nurses after a minimumof three years of education and after passing the national nurse qualifying examination. In recent years, nurse
education has transferred from vocational schools to universities. Nurse education in university takes four years,
and graduation from a university nurse education course meets the eligibility requirements for the national nurse
qualifying examination not only for nurses but also for public health nurses. Eligibility requirements for thenational nurse qualifying examination for midwives are met by finishing the university nurse education coursewith additional education courses for midwives. A nurse profession association issues certificates of specialties fornursing in some areas such as emergency nursing, cancer chemotherapy nursing, and so on. These may beconsidered the same as clinical nurse specialties in other countries.
Fourth, freedom of choice to utilize any medical institution is guaranteed by law for all enrollees in publichealth insurance. Patients can select any clinic or outpatient department of a hospital. Free access is assured, but it38

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Population and Social Security in Japan 2019can cause inefficiency in the functioning of clinics and hospitals. Hospitals with high clinical functioning charge
patients extra fees in addition to prices based on tariffs for medical care services. This charge is legally permitted.
The amount of surcharge varies from hospital to hospital.
Fifth, the tariffs for medical care services are determined by the Central Social Insurance Medical Council.
The council consists of representatives of clinical physicians and hospitals, public health insurance insurers, andthe general public. Once in two years, the council determines and updates the tariffs for medical care services as
publicly regulated prices. The updates are made using the results of the Survey for the Financial Situation ofClinics and Hospitals, and the results of the Survey for Medical Care Utilization. The updates also depend onpolitical negotiation and can be used as a political inducement tool. When the committee acknowledges that thereis need for expanding the utilization of some services, but low profitability is inhibiting the provision of theservices, then it decides to increase prices to induce more medical institutions to provide the services. The
Ministry of Health, Labor and Welfare decides coverage and tariffs for medical services based on the council’s
suggestions.
Last, the medical institution must be nonprofit. This means that the financial surplus from running the
medical institution cannot be shared with capital subscribers and/or investors. Financial surplus, if any, must be
used for investment in medical equipment, facilities, etc., or must be kept as internal reserves. Private companies
can own medical institutions to promote their employees’ health. In these cases, the management of the medical
institutions must obey a nonprofit principle.
4.3.4 Current issues in the health care service provision system
4.3.4.1 The lack of physicians
Aging implies that the number of elderly people is increasing. These people will need not only care forchronic diseases but also acute care. Since the 1970s, at least one university with a department of medicine has
been established in each prefecture. It was thought in those days that this policy would satisfy the future need forphysician services. However, the increase in medical doctors may not have be able to keep with the growing
medical needs of the elderly due to rapid aging. As we have seen in section 4.3.2, the total number of medical
doctors working in medical institutions is 2.4 people/1,000 people. This figure is relatively smaller than the ones
for OECD countries (Figure 4.4).

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Figure 4.4: International comparison of the number of physicians by OECD Health Data (in year 2014)

physician density Per 1,000 people

6

5

4

3

2

1

India*South Africa*
China (People's Republic of)*
Colombia*
Korea
MexicoPolandJapan
CanadaUnited States
United Kingdom
Slovenia
Ireland
New Zealand
Luxembourg
Belgium
IsraelFranceFinland
LatviaHungary
Estonia
Netherlands
Australia
IcelandDenmark
Spain
Italy
Germany
Switzerland
Russia*SwedenLithuania
NorwayAustria0*Non-OECD Economies

This problem is serious in the Tohoku area, which was hit by the Great East Japan Earthquake in 2011. Even
before the earthquake, there were relatively few physicians in the Tohoku area. The earthquake hit not only people
but medical personnel and medical institutions as well, and the number of physicians decreased after theearthquake. The issue of whether a new medical school should be established in the Tohoku area or not is being
discussed.
4.3.4.2 Establishment of an integrated community care system
Elderly people need medical care services and long-term care services to support their independent living. It
is natural to think that both services are supplied to users in an orderly fashion. For this the establishment of
an integrated community care system is needed. To achieve this, communication should be encouraged among
personnel in the long-term care sector and personnel in the medical care sector when their services are provided.
Section 5.3.2 elaborates further on this view.

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Table 4.1 Outline of the Health Insurance System in JapanAll numbers are as of March 2015 unless otherwise noted.
Health Insurance
1)

Name

2)

Eligible subscriber

3)

Number of subscriber(millions) Dependents
Insurer (number of organizations)

4)

Seamens' Insurance

Association-managed
Society- Health
Health Insurance
Insurance
Employees of Small- Employees of Large
Medium firms
firms
21.57715.842
15.58713.282
Japan Health
Health Insurance
Insurance Association Associations (1,409)

5)

6)

7)

Premium rate:
Subscriber
Employer
Gov't Subsidy to:Administrative cost
Medical cost
Contribution for the health carefor elderly
Co-payment:
Subscriber
Dependents
Inpatient meal expense

䚷䚷Maximum amount of
copayment(inpatient care)8)

9)

Allowance:
Childbirth allowance
Funeral expense
Fun.exp. for dependents
Unemployment benefits:

Due to sickness

Due to childbirth

0.054
0.066

Government

National Govt Civil
Servants
1.079
1.164

Local Govt Civil
Servants
2.413
2.171

Private School Teachers& Employees
0.566
0.349

Mutual Aid associciation Mutual Aid associciationof each ministry (20)of each local govt (64)

Medical Care System for Elderly in the Latter
Stage of Life

National Health Insurance

Self-employed, farmers,etc.
31.822

Municipality(1,716)Retired2.864
National Health
Insurance
Municipality(1,716)
Associations(164)

Elderly aged 75 or over, and persons aged
under 75 with a certain level of disability
16.457

Extended associations for the Medical Care
System for Elderly in the Latter Stage of Life
(managing entities)

3.80%
3.80%

41.14%
49.15%

4.55%
6.10%

6.00%
6.00%

6.00%
6.00%

3.84%
3.84%

9.90%
--

---

---

8.3%

All
16.4%

All
Fixed amountAll
Fixed amountAll--

All (by local govt)--

Partial
--

All
43%

All
32%

All
--

All
90%䠄䈜1䠅

16.40%

--

--

--

--

--

--

--

--

30%
30% 䠄Children below school age 20䠂)
30%䠄Children below school age 20䠂)---?260/meal (for low-income family ?210/meal for first three months, ?160/meal after 3 months, or for most low-income family (70䡚74 years old) ?100/meal)

For patients under 70 years old;
?150,000+(total cost of medical care services - 500,000)*0.01 (for high-income people)?80,100+(total cost of medical care services - 267,000)*0.01 䠄General)?35,400䠄Low-income people)?15,000䠄Very low-income people)䈜2

For patients aged 70-74 years old;
?80,100+(total cost of medical care services - 267,000)*0.01 (for high-income people)?62,100 䠄General)?24,600䠄Low-income people)?15,000䠄Very low-income people)¥420,000¥50,000¥50,000¥420,000¥50,000¥50,000

Standard daily remuneration * 2/3 per day

Standard daily
remuneration * 2/3
per day

Amount of "Standard
Amount of "Standard
Standard daily
daily remuneration * 2/3 daily remuneration * 2/3
remuneration * 2/3 perper day" multiplied by a per day" multiplied by aday
constant coefficientconstant coefficient

Up to 18 months

Up to 3 years

Up to 18 months (except Up to 18 months (except Up to 18 months (except
for TB 3 yrs)
for TB 3 yrs)
for TB 3 yrs)

Standard daily remuneration * 2/3 per day

Standard daily
remuneration * 2/3
per day

Amount of "Standard
Amount of "Standard
Standard daily
daily remuneration * 2/3 daily remuneration * 2/3
remuneration * 2/3 perper day" multiplied by a per day" multiplied by aday
constant coefficientconstant coefficient

42 days before birth, 56 days after
Due to unemployment

SeamenNational Govt
Local Govt Employees' Private School Teachers
Employees' Mutual Aid
Mutual Aid Association & Employees' MAA
Association--¥420,000¥50,000¥50,000¥420,000¥50,000¥50,000¥420,000¥50,000¥50,000

standard amount ?420,000
Set according to the law--

Standard not set

10%䠄䈜2䠅Same as left

?80,100+(total cost of medical care services- 267,000)*0.01 (for high-income people)?44,400 䠄General)?24,600䠄Low-income people)?15,000䠄Very low-income people)䈜2

䈜1
䚷Public funds approx. 50%
䚷Contributions approx. 40%
䈜2Co-payment rate is 30% for
those earning the same level income as theworking generation
䚷Co-payment limit
䚷䚷?80,100䠇䚷䚷(Medical expenses?267,000) * 1%Standard not set

Unemployed days
42 days before birth, 56 42 days before birth, 56 42 days before birth, 56
before birth, 56 days
days afterdays afterdays after
after
--

50% of avg. salary

60% of salary

60% of avg.salary----

1 month of avg. salary

1 month of avg. salary

1 month of avg. salary--

70% of monthly salary10) Disaster Relief:
For deathFor death of a family member----

70% of monthly avg.
salary70% of monthly avg.
salary--For disaster----

0.5 to 3 months of avg.
0.5 to 3 months of
0.5 to 3 months of avg.
salary, due to severness salary, due to severness salary, due to severness--

Source: Ministry of Health, Labour and Welfare (MHLW) "Annual Health, Labour and Welfare Report 2009", National Institute of Population and Social Security Research (IPSS) "Shakai Hosho Tokei Nenpo, 2009", Zenkokuhokenkyokai website https://www.kyoukaikenpo.or.jp/

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Population and Social Security in Japan 2019

Chapter 5 Welfare for the Elderly
5.1 Overview of Welfare for the Elderly
Before the enactment of the Act on Social Welfare for the Elderly in 1963, welfare for the elderly had been
mainly to accommodate frail elderly persons in asylums under the public assistance system. The act of 1963 aimed
to maintain the physical and mental health of the elderly and to stabilize their livelihoods, and various welfare
services for the elderly, including intensive care homes and home help services, were developed during the 1960s.
As free healthcare for those 70 years old and over was introduced in 1973, healthcare expenditure for the elderly
expanded and increased the financial burden on the government. The Health and Medical Service Act for the Agedin 1982 imposed a copayment on the elderly for healthcare, and it emphasized the importance of health promotion
for the middle-aged over 40 years old.
Around the same time, more people were becoming aware of the problem of “social hospitalization” andbedridden elderly, which means that the elderly tended to be hospitalized even after their conditions no longer
required medical care because long-term care facilities and services were not enough, and copayments for thosefacilities were more expensive than those for hospitals. To tackle this problem, the ministry formulated the Gold
Plan (10-year strategy for the promotion of health and welfare for the elderly) in 1989 so as to promote the urgent
development of care facilities and in-home services; it was revised in 1994 as the New Gold Plan (new 10-year
strategy for the promotion of health and welfare for the elderly), which enhanced home-based care and led to theargument for a new long-term care system for the elderly.
In April 2000, Japan introduced Long-Term Care Insurance. This social insurance system covers long-termcare for the elderly, which was previously provided partly through the health insurance system and partly by thewelfare measures for the elderly. Long-Term Care Insurance grew out of the recognition that, due to changes in thesociety such as weakened community ties, an increase in smaller family size, and an increase in working women,
the financial and psychological burden of families facing care for the elderly had become unbearably large.
Furthermore, there was a limit on service provision under the existing health and welfare system because of theincreasing number of elderly requiring long-term care for longer periods. Long-Term Care Insurance is designed toshare the burden of caring for the elderly among all members of the society.

5.2 Long-Term Care Insurance System
5.2.1 Principles of the Long-Term Care Insurance System
There are three basic principles of Long-Term Care Insurance: support for independence, user-oriented system,and social insurance. Firstly, the system does not intend to simply provide personal care to the elderly who needlong-term care but emphasizes supporting their independence. Secondly, service users can receive comprehensive
health, medical, and welfare services from diverse agents based on their own choices. Thirdly, those who are 40
years and over are compulsorily insured; thereby, the relationships between benefits and contributions are madeclear, and the stigma of welfare services is removed.

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5.2.2 Insurer
Municipalities and special wards (hereinafter referred to as simply “municipalities”) are the insurers because
they have been engaged in health and welfare services for the elderly and are expected to deliver services in harmony
with community values. Insurers collaboratively work with the national government, prefectures, medical careinsurers, and pension insurers, and take the responsibility for (1) collecting insurance premiums, (2) managing funds,(3) assessing care needs, and (4) paying remuneration to service providers through a prefectural health insuranceorganization. For the sake of fiscal stability and administrative efficiency, some smaller municipalities organize an
extended association as a regional insurer.
5.2.3 Insured
Primary insured persons are those aged 65 and over (Category I); secondary insured persons are those
subscribers who are 40 to 64 years old (Category II). About 34.4 million persons are subscribed as Category I, andabout 42 million persons are subscribed as Category II (as of the end of FY2016). The premium is collected throughthe municipality and deducted from pensions for Category I and through an additional premium to be paid to healthinsurance for Category II. The premium amount for Category I is determined by each municipality and, thus, differsfrom one municipality to another. The premium is income-related, and there are measures to moderate the burden
for low-income persons.
Those eligible to receive long-term care are all persons in Category I who are certified as requiring support or
long-term care based on the Certification of Long-Term Care by the Certification Committee. Meanwhile, forCategory II persons, care is limited to those requiring long-term care or support due to age-related diseases (specified
diseases) such as dementia and cerebrovascular disorder.
5.2.4 Service Provision
Services provided by Long-Term Care Insurance are mainly divided into two categories, preventive services
and care services. Preventive services are provided for those certified as Support Level 1 or 2, and care services arefor those certified as Care Levels 1-5.
Types of preventive services include home-visit care, outpatient rehabilitation service, and short-term stays at
a care facility. Types of care services include in-home services such as home help service and day care; facility
services such as intensive care homes, long-term healthcare facilities, and sanatorium-type care facilities; andcommunity-based services such as home visits at night, day care for dementia patients, and small-sized
multifunctional in-home care. According to the level of care needs, users can choose the type of services andproviders, either publicly or privately managed.
5.2.5 Source of Financing
The cost incurred in Long-Term Care Insurance is financed by premiums, public expenditure, and copaymentsfrom users. Apart from the copayments, the cost is financed 50% by premiums (23% by Category I, 27% byCategory II) and 50% by public expenditure (for in-home services 25% by national treasury, 12.5% by prefectures,and 12.5% by municipalities, and for facility services 20% by national treasury, 17.5% by prefecture and 12.5% bymunicipalities). Within this framework, the municipality can determine the premium rate for the insured of Category43

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I. The premium for Category I is charged based on the total income of the insured and is reviewed once every three
years. It was around ¥2,900 per month on average in 2000-2002; the amount has increased to ¥5,869 for FY20182020. For the Category II insured, the rate will be 1.57% of the salary and annual bonus as determined by the Japan
Health Insurance Association.
As a fiscal support for municipalities, prefectures set up the Fiscal Stability Foundation (financed from thenational treasury, prefecture, and municipality) to give a temporary loan or grant when an insurance budget deficit
occurs because of a more-than-expected service increase and unpaid premiums.

Source of financing

Figure 5.1 Overview of Long-Term Care Insurance

Subsidy

Premium
Primary
insuredAged 65+

SecondaryinsuredAged 40-64

Copayment
National Prefectural

Municipal

Insurer and Operator
Municipalities (Shi-Ku-Cho-Son ᕷ༊⏫ᮧ)

Operation

Care-needs assessment andcare-plan elaboration by care manager

In-homeservices

Facility
services

Communitybased careservices

Preventive
services

Community-basedpreventive
services

5.2.6 Assessment of Care Needs
Users are classified into seven categories (“Support Levels 1 and 2” and “Care Levels 1 to 5”), depending on
the severity of the care need. The limit of services provided is determined according to these categories. The user
must be assessed by the municipality into one of the categories before applying for the services. For example, whena person faces a condition requiring support or care, the person or a family member must first submit an application
for a long-term care requirement certification to the municipal office. Upon receipt of this application, a municipal
investigator visits the applicant’s home for an interview regarding the physical/mental state and aspects of daily life.
The interview results are analyzed by a computer system to generate a preliminary assessment.
This assessment and an opinion letter from the primary physician are then reviewed by the Certification
Committee of Long-Term Care Needs, which comprises health, medical, and welfare experts. This committee
conducts a secondary assessment and decides the required care/support level. The municipality notifies the applicant
about the decision. Applicants who are not certified as requiring preventive or care services covered by Long-TermCare Insurance can be eligible to receive long-term care prevention services under the community-support project44

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Population and Social Security in Japan 2019conducted by the municipality.
5.2.7 Care Management
Once the care (support) level is decided, a personal Care Plan is created, which combines packages of care andsupport within the limit of services for each category. The creator of the Care Plan varies depending on the category.
The Care Plans for those eligible to receive care services and requiring care levels 1 to 5 are created by Long-TermCare Support Specialists (care managers) at in-home long-term care support businesses or care facilities. The Care
Plans for those eligible to receive preventive services and requiring support levels 1 to 2 are created at integrated
community care support centers (ᆅᇦໟᣓᨭ᥼ࢭࣥࢱ࣮).
When the law was revised in 2005, Integrated Community Care Support was created as scheme that was inline with the emphasis on preventative services. . It serves as the basis for elderly care and is responsible for caremanagement to prevent long-term care, creating Care Plans for preventive long-term care services, providing
consultations to the elderly and their families, protecting elderly rights, and detecting abuse.
5.2.8 Remuneration for Services
When long-term care providers deliver preventive or long-term care services for recipients, they receive
remuneration for services based on the official price list of the Long-Term Care Benefit Expense, which is decided
by the Minister of Health, Labour and Welfare according to the recommendation of the Social Security Council.
The price list consists of in-home long-term care/preventive services and facility services and is revised every three
years. Ninety percent of the price is paid to the provider through a prefectural health insurance organization and
10% by recipients as the copayment. For high-income elderly, 20% or 30% copayment is applied, and the rest of
the cost (80% or 70%) is paid through a prefectural health insurance organization.

5.3 Current Issues in Long-Term Care Insurance
5.3.1 Financial Strain and Construction of the “Integrated Community Care System”
Soon after its enactment, it became evident that the initial financial arrangement was not enough to meet thecost of long-term care. As shown in Figure 5.2, the number of persons certified for long-term care increased bymore than 247%, from 2000 (2.56 million) to 2016 (6.32 million). The number of care recipients also grew from1.84 million (0.60 in facilities and 1.24 in in-home care) in the FY2000 average to 5.60 million (0.92 in facilities,
3.91 in in-home care, and 0.77 in community-based services) in the FY2016 average. The financial outlay grewsteadily from ¥3.6 trillion (2000) to ¥10.0 trillion (2016).
With such circumstances, Long-Term Care Insurance was reviewed, and several reforms were put in place. For
example, the 2011 reforms aimed to construct an integrated community care system that provides seamless supports
comprising healthcare, long-term care, prevention, housing, and livelihood support services and to achievesustainability of the system with a balanced relationship between contributions and benefits. The Act for Partial
Revision of Long-Term Care Insurance refers to (1) enhancing collaboration between health and long-term care, (2)securing human resources for long-term care and improving quality of services, (3) improving housing for theelderly, (4) promoting measures to support people with dementia, (5) enhancing functions of insurers and promoting
their autonomy, and (6) mitigating the increase of the insurance premium.

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Chapter 5 Welfare for the Elderly

Population and Social Security in Japan 2019

Figure 5.2 Number of Persons Certified for Long-Term Care by Care/Support Level (in 1,000)

㻡㻢㻝㻝
㻡㻟㻜㻢
㻡㻜㻢㻞

㻠㻜㻤㻢
㻟㻤㻟㻥
㻟㻠㻠㻡
㻞㻥㻤㻟

409

㻞 㻡㻢㻞

377

419

337
363
355

389

426

389

322

452
473
486
596

875
390

493
522
611

465
521
552
645

486
544
645

㻠㻡㻞㻥
499
575

1,056
499

1,240

593

1,328 1,423

669

718

591

513
638
587
698

705

897
750

802

665
743

605
709
766

721
948

989

1,046

1026

603
726
790

㻢㻞㻜㻠 㻢㻟㻞㻜
601

601

744

764

810

832

1103
1060 1080

1,110 1,170

1,220 1,260

907

965

0
660

802

858

868

709

766

838

668

572

664

690

764

820

871

890

892

784

45 2
508 627
550

527

692

821

769

895

607

736

636

563

484
701

463

㻠㻟㻞㻟 㻠㻠㻜㻝

㻠㻢㻣㻟

611

㻡㻤㻟㻤

㻢㻜㻡㻤

2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016
Support Level
Transitional Care Level
Care Level 3

Support Level 1
Care Level 1
Care Level 4

Support Level 2
Care Level 2
Care Level 5

Source: Report on the Status of Long-term Care Insurance, etc.
Notes: Data are of end of each fiscal year (end of March next year). Due to the Great East Japan Earthquake, 11 and 3 municipalities’
data are not included for 2011 and 2012, respectively.

5.3.2 Establishment of an Integrated Community Care System
The Long-Term Care Insurance system initially aimed to support independent living for the elderly, and even
if the elderly entered a state that required long-term care, it aimed to develop an environment where the elderly
could receive treatment in the community with which they were familiar. To this end, the 2005 revision in the law
established community-based care services and integrated community care support centers to ensure enhanced
services and coordination at the municipality level.
However, the target has not been achieved as many issues remain such as elderly persons having to enter a carefacility, even if they requested in-home care, due to a lack of available proper service providers in the familiar
community, a lack of collaboration between medical institutions, care facilities, and in-home service providers, andinsufficient elderly-friendly housing.
Integrated community care is defined as a community-based system that can appropriately provide various
support services including healthcare, long-term care, prevention, housing, and livelihood support within dailyliving spheres to ensure the safety, security, and health of the people. A community is generally regarded as thatwhich is accessible within 30 minutes, an area almost as large as a junior high school district. To establish thissystem, the following five aspects of action were set up: (1) enhancing collaboration with medical facilities, (2)improving and enhancing the capacity and flexibility of long-term care services, (3) promoting prevention, (4)ensuring advocacy and livelihood support services such as meal provision service or housework assistance, and (5)constructing and improving elderly-friendly housing. Central and local governments are involved in coordinating46

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Chapter 5 Welfare for the Elderly

Population and Social Security in Japan 2019all related programs so that people can live independently in the familiar community for as long as possible.
5.3.3 Securing Human Resources of Long-Term Care
The number of care workers has increased since the start of the Long-Term Care Insurance system, and it
reached approximately 1.83 million workers (head count) in FY2015, a sharp increase from 0.55 million (headcount) in FY2000. Although the number has grown, long-term care providers always suffer shortages of long-termcare human resources as the demand for services increases. It is regarded as a big challenge to secure the necessary
personnel and to improve their working environment. Basically, most workers are female in the long-term careservices, and most of them work part-time, especially for in-home services, while most workers in facilities are fulltimers.
To raise their wages, the ministry took several measures such as additional payments for long-term careproviders to improve working conditions. Providers can receive additional payments if they meet the requisite of
improvement programs, including a pay-raise plan.
In addition, long-term care equipment with ICT and robot technology has been developing; some of them areused in long-term care workplaces or in the home. We can expect that these devices will improve service efficiency
and working conditions in long-term care. One of the hot topics in Japan is attracting foreign-born care workers. In
Japan, care workers should be covered by domestic human resources on principle. However, Japan has accepted
nurse and certified care-worker candidates from Indonesia, the Philippines, and Vietnam based on an EPA(Economic Partnership Agreement). The numbers of candidates for nurse and certified care-worker were 1,203 and3,492, respectively, from FY2008 to FY2017. In 2017, care service was included in the “Foreign TechnicalInternship Program,” and a new category, residence permission “care service,” was started.

5.4 Welfare for the Elderly Other Than Long-Term Care Insurance
5.4.1 Housing for the Elderly
Figure 5.3 shows the outline of housing services for the elderly: 1) intensive care home, 2) group home forthose with dementia, 3) nursing home, 4) moderate-fee home, 5) fee-based home, and 6) elderly housing with careservices.
An intensive care home for the elderly is a day care facility for persons aged 65 years and over who require
constant nursing care services due to serious physical or mental disabilities. This service is provided mainly byLong-Term Care Insurance benefits. Group homes for the elderly with dementia are small facilities in which
dementia patients live together and receive care and supports in a homely atmosphere under Long-Term Care
Insurance. The capacity of a group home is defined as five to nine persons.
However, based on the conventional system defined by the Act on Social Welfare Service for the Elderly,
institutional services for the elderly are still provided. Nursing homes for the elderly are admission-type facilities
for the economically deprived. In addition, moderate-fee homes for the elderly (care houses) provide residence andsupport services, including meal services, at low cost.
In recent years, there have been more fee-based homes for the elderly run by the private sector. These areconsidered as housing facilities rather than social welfare facilities. When an elderly person enters a contract with aservice provider of a fee-based home, they must pay the full expense, which sometimes causes financial trouble

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Chapter 5 Welfare for the Elderly

Population and Social Security in Japan 2019

between the provider and the resident. The in-home service provided by Long-Term Care Insurance can be used atthese facilities.
Elderly housing with care services, introduced in 2011, are run by the private sector and are required to registerwith the prefecture. The criteria for registration are (1) dwelling floor area of 25 m2 or more per dwelling unit inprinciple and a barrier-free design, (2) provision of services including safety confirmation and daily life consultation,and (3) extra consideration on contract to secure the residence in case of long hospitalization, etc. There are subsidies
to promote elderly housing with care services, and 7,138 buildings comprising 236,428 units were registered by
October 2018.
Alternatively, Silver Housing has been developed jointly by the MHLW and the Ministry of Land,
Infrastructure, Transport and Tourism since 1986. It is a collective housing for single-person and married-couple
households aged 60 years old and over, and usually, Life Support Advisors are attached on site for counseling,
consultation, safety confirmation, temporary home help, and emergency response. There is also public housing for
low-income households, and some of them are purpose-built for the elderly or disabled persons.

Figure 5.3 Outline of Housing Services for the Elderly
1) Intensive carehome for the elderly

Legal basis

Act for Welfare of
the Aged, LongTerm Care
Insurance Act

Basiccharacters

Facilities for theelderly requiringconstant long-term
care2) Group home forthe elderly withdementia
Act for Welfare of
the Aged, LongTerm Care
Insurance Act4) Moderate-fee
3) Nursing home for5) Fee-based home
home for the elderly
the elderly
for the elderly(care house)6) Elderly housingwith care service

Act for Welfare of
the Aged

Act for Welfare of
the Aged

Act for Welfare of
the Aged

Act on Securementof Stable Supply ofElderly Persons'
Housing

A shared house forthe elderly withdementia

Facilities forenvironmentally andeconomicallydeprived elderly
persons

Housing for theelderly with low
incomeHousing for theelderly

Housing for theelderly

Business
corporations

Local govenments,social welfare
corporations

Local governments,social welfare
corporations,
corporations
approved by
prefecture

Business
corporations

Business
corporations

7.43 䟝

10.65 䟝21.6 䟝

13 䟝

25 䟝

Local governments,
Establishedspecial welfarebycorporations
Area perdwelling

10.65 䟝Source: MHLW (2013), The current situation and the future direction of the Long-Term Care Insurance System in Japan: with a focus
on the housing for the elderly.

5.4.2 Five-Year Plan to Support People with Dementia
In 2012 the MHLW published “Future Directions of Dementia Support” and announced a five-year strategicplan (Orange Plan) to support people with dementia. This plan was revised as the “Comprehensive Strategy for
Promotion of Dementia Policy” (New Orange Plan) in 2015. This plan aims to create a society that respects dignity
and enables people to live in a familiar environment in the community as long as possible, even if they have dementia.
In order to achieve the goal, the ministry positively pursues new programs to change the conventional culture ofcare, which often treats people with dementia in a psychiatric hospital or facility. The programs include newly
developed standard care paths for dementia, early diagnosis and treatment, appropriate health and long-term careservices to support living in the community, enhanced livelihood support for persons with dementia and their family
members, and personnel training.

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5.4.3 Prevention of Elderly Abuse
The Act on the Prevention of Elder Abuse, Support for Caregivers of Elderly Persons, and Other Related
Matters was enacted in 2005 for respecting the dignity of the elderly, preventing abuse, protecting those abused, andsupporting caregivers. The act defines “elderly abuse” to include abusive behavior by both family members andcare workers. It specifies that municipalities are primarily responsible for implementing abuse prevention programs,
while prefectures play the role of liaison, coordinating municipalities, collecting and providing information, andconstructing facilities.
The following items are emphasized as the fundamental perspectives of the abuse prevention program: (1)seamless supports from prevention of abuse to recovery from abuse, (2) respect for the elderly persons’ own decision
making, (3) positive approaches to abuse prevention, (4) early detection and protection, (5) support for the elderly
and their caregivers, and (6) collaboration and cooperation of related organizations.
5.4.4 Relationship with Other Public Care and Support Services
Regarding the relationship between Long-Term Care Insurance and elderly services under the Services andSupports for Persons with Disabilities Act or public assistance, benefits of the Long-Term Care Insurance Act havepriority according to the principle of placing priority on insurance. Services such as hearing aids and prosthetic
hands/legs, which are not covered by Long-Term Care Insurance, are provided to the elderly with disabilities
according to the Services and Supports for Persons with Disabilities Act. As for service provision, “Elderly andPersons with Disability Coexist Type Care Provider” was created in the 2018 reforms of Long-Term Care Insurance.
This is a new type of long-term care or disability welfare service provider. If a welfare service provider is designatedas one of the above, it will be easier to be designated as another. With regard to public assistance, for the extremely
poor elderly, the benefits of Long-Term Care Insurance are given priority, and the copayment portion is covered by
the public assistance system.

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Chapter 6 Public Assistance

Population and Social Security in Japan 2019

Chapter 6 Public Assistance
6.1 Re-emergence of Poverty in Japan
Until the middle of the 2000s, it was widely believed that Japan had solved the poverty problem. The notionthat Japan had achieved economic growth and an egalitarian society had sunk deep into the Japanese public
consciousness so much so that it had become a source of national pride and identity. In fact, in the 1960s, people’s
living standard rose rapidly, and the food shortage problems after World War II had become things of the past. The
term “middle-class nation” was coined to describe Japan in the 1970s, and it was believed that all people, even themost disadvantaged, had benefited from the economic growth. The government stopped collecting and publishingstatistics on poverty in the 1960s, and poverty dropped from the policy discourse.
However, since the 1980s, Japan’s poverty rate has risen steadily. As shown in Figure 6.1, the relative poverty
rate in Japan increased four percentage points from 1985 to 2015, making Japan one of the top five countries among
the OECD countries with a high poverty rate.

Figure 6.1 Relative Poverty Rate of Japan

Note: Relative poverty rate was calculated as the percentage of the population falling below 50% of the medianequivalized household income.
Source: MHLW (2017)

The government finally recognized the problem of poverty in the late 2000s. In 2009, the MHLW announced
the relative poverty rate, and several measures to assist the poor were implemented in the late 2000s; in 2014, theLaw on Measures to Counter Child Poverty was enacted.

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Chapter 6 Public Assistance

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6.2 Public Assistance Program
6.2.1 General Characteristics
Public assistance is the last safety net to secure poor and needy persons. The history of public assistance inJapan goes back to poor relief before World War II. Today’s public assistance program has its legal basis on the
Public Assistance Act enacted in 1950, and it has four fundamental principles: (1) public assistance to all citizens inpoverty is a responsibility of the state, (2) all citizens may receive public assistance in a nondiscriminatory and equalmanner as long as they satisfy the requirements prescribed by this act, (3) the State guarantees a minimum standardof living where a person is able to maintain a wholesome and cultured standard of living, and (4) public assistanceis provided based on a requirement that a person who is living in poverty shall utilize his/her assets, abilities, andevery other thing available to him/her for maintaining a minimum standard of living.
The public assistance program comprises eight types of assistance, namely, livelihood assistance, education
assistance, housing assistance, medical assistance, long-term care assistance, maternity assistance, occupational
assistance, and funeral assistance. The assistance amount is calculated by subtracting the household income fromthe minimum living expenses (see Figure 6.2). The minimum living expenses are different depending on region, thenumber of household members, household members’ ages, etc. All assistance is provided as cash transfers except
medical care and long-term care, which are provided as in-kind.

Figure 6.2 Determination of Monthly Minimum Cost of Living

Source: MHLW (2018) “Annual Health, Labour and Welfare Report 2017”

6.2.2 Means Test
Public assistance is basically provided upon receipt of an application from a household in poverty after themeans test. As mentioned, the fourth principle of public assistance requires that a household should manage allavailable resources including assets, ability to work, and assistance from those who are required to support theperson by law. Assets such as land, houses, and farms must be sold, except in the case where the person is living inor utilizing it and the value of the assets is higher when it is utilized than when it is sold.
Regarding the ability to work, if the person is able to work and there is an adequate job for him/her where
he/she is living, he/she is required to use that ability in precedence over public assistance. However, he/she canreceive public assistance if the household income including working income does not reach the minimum living
expenses.
Any supports given by relatives and family members have precedence over public assistance, although it does
not necessarily mean that he/she is not eligible to receive public assistance when supports from relatives/families

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Chapter 6 Public Assistance

Population and Social Security in Japan 2019are available.

6.2.3 Statistics of Recipients of Public Assistance
As of July 2016, 1.6 million households or 2.2 million persons received public assistance. The number ofrecipients has been increasing since the middle 1990s, and it has exceeded the numbers right after World War II,
although the recipient rate is still slightly lower (see Figure 6.3).
Figure 6.4 shows the share of recipients by household type. Among those receiving assistance, elderly
households make up the largest share, accounting for over 50% of all recipient households, and this has increased
over the last few decades. The share of households with a disabled or sick individual is also large, at 26.4%. About
6% are single-mother households.

Figure 6.3 Trends in Number of Recipients and Recipient Rate (1952-2016)

Source: National Institute of Population and Social Security Research, “Official Statistics on the Public Assistance System”
http://www.ipss.go.jp/site-ad/index_Japanese/securityAnnualReport.html

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Chapter 6 Public Assistance

Population and Social Security in Japan 2019

Figure 6.4 Share of Recipients by Household Type (1975-2016)100%

2WKHUV
90%

80%'LVDELOLW\6LFNQHVV

70%

60%

50%

40%

6LQJOHPRWKHU

30%

20%

(OGHUO\

10%

0%
1975

1980

1985

1990

1995

2000

2005

2010

2015

ILQDQFLDO \HDU

Source: National Institute of Population and Social Security Research, “Official Statistics on the Public Assistance System”
http://www.ipss.go.jp/site-ad/index_Japanese/securityAnnualReport.html

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Chapter 6 Public Assistance

Population and Social Security in Japan 2019

Figure 6.5 shows the duration of receiving assistance. Households that have been receiving for less than ayear comprise nearly 10% of recipients, and those that have been receiving for more than 10 years comprisenearly 30%. The duration tends to be longer because most recipients are elderly, so it is not expected that they can
improve their economic situation.

Figure 6.5 Duration of Receiving Public Assistancel ess than 6 months, 5.3%
6 months-12 months, 4.6%

more tha n 15 yea rs
14.0%

1-3 yea rs
16.3%

10-15 yea rs
15.1%

3-5 yea rs
15.0%
5-10 yea rs
29.7%

Source: MHLW, "National Survey on Public Assistance Recipients"
Note: Data are compiled by National Institute of Population and Social Security Research (IPSS).

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Chapter 6 Public Assistance

Population and Social Security in Japan 2019

6.3 Current Issues
6.3.1. 2013 Reform of Public Assistance
Public assistance is one of the oldest programs of the social security system in Japan. The recent upward trend
in the number of recipients and expenditure of public assistance has become controversial, and the public assistanceprogram has become one of the main targets for budget restraint in the policy debate. One of the criticisms of the
program was that the benefit level is too high compared to the income level of people who do not receive public
assistance benefits. For example, the benefit level for single mothers was pointed out to be higher than many single
mothers who are “managing on their own.” While many scholars argue that this is not the problem of the benefit
level per se, the problem is the fact that many people do not receive the benefit even though their income level islow (i.e., the take-up rate of the program is rather low; the take-up rate is the percentage of those who are actually
receiving the benefit among those who are eligible to receive the benefit.). The government had demolished the
additional benefit that was previously given to single mothers and elderly households by March 2007. However, thebenefit for single mothers was reintroduced in December 2009. In August 2013 the government decided to reduce
the amount of livelihood assistance, the major component of the minimum standard of living, by as much as 10%
for some households to compensate for the declining consumer price index. There was a widespread outcry against
this measure.
6.3.2 Emerging Policies Toward Poverty Alleviation
There have been several policy initiatives in recent years that target the poor. The Law to Assist Those
Experiencing Hardship (⏕άᅔ❓⪅ᨭ᥼ἲ) was debated extensively in 2012 and 2013 and was enacted in 2014.
This law aims to establish comprehensive welfare service offices throughout the nation. It is intended as a one-stop
service provider for those in need. Another initiative is the enactment of the Law on Measures to Counter Child
Poverty, as previously mentioned. It mandates that the Japanese government plan a comprehensive policy to combat
child poverty and implement the plan. It states as the guiding principle that the aim of policies to combat childpoverty is to realize a society in which a child’s future is not influenced by the circumstances into which they areborn. The law calls for a basic policy framework to be enacted by the Committee on Combating Child Poverty,
which will be assembled within a year after its enactment, and mandates that the government announce the state ofchild poverty and policies every year.

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Chapter 7 Family Policy

Population and Social Security in Japan 2019

Chapter 7 Family Policy
7.1 Introduction – History of Family Policies in Japan
7.1.1 Brief History
The basic system for children and families in Japan was developed after World War II from the 1940s to the1970s, and six laws were enacted during this period: the Child Welfare Act (1947), the Child Rearing Allowance
Act (1961), the Special Child Rearing Allowance Act (1964), the Lone-Parent Family and Widow Welfare Act(1964), the Maternal and Child Health Act (1965), and the Child Allowance Act (1971). Since the 1980s, women's
participation in the labor market has progressed, and the demand for childcare has increased gradually.
In the 1990s and beyond, in the policy framework of "Countermeasures against the Declining Birthrate," fromthe viewpoint of removing obstacles in marriage, childbirth, and child rearing, the government aimed to expand
child allowance and childcare services, and the parental leave system was enacted in 1991. The reconciliation ofwork and child rearing is becoming one of main issues in family policy.
In 2014, the Law on Measures to Counter Child Poverty was enacted 1.The act obligated both centraland local governments to make comprehensive plans to combat child poverty.
As mentioned above, policies for family and children have been developed since World War II according to
the changes in families and society. In Japan, those policies are not referred to as “Family Policy.” Instead, “Support(or Welfare) System for Children and Child-Rearing” or "Countermeasures against the Declining Birthrate" are used
officially, according to the context. It can be considered that those policies almost correspond to “Family Policy,”
which is used generally in international organizations or European countries (Masuda, 2008) 2.
As for international law, Japan has ratified various international conventions related to human rights. The
Convention on the Elimination of All Forms of Discrimination against Women and the Convention on the Rights of
the Child were ratified in 1984 and 1995, respectively. As a member of the international community, Japan has
sought to improve various social measures for families.
7.1.2 Policies to Cope with the Declining Birthrate Since the 1990s
Japan has faced a rapid aging and decreasing of the population, which is mainly caused by a low fertility rate.
In order to stop the trend toward a society with few children, it is necessary to create an environment favorable tochild rearing.
One of the major reasons behind the rapid fall in the birthrate is the situation whereby women are not able tochoose various work styles. The increase in temporary employees and long working hours has made it difficult for
the Japanese to achieve the lifestyle and work style they desire. 3 Other reasons for low fertility are inactive dating
behavior, increases in direct and indirect costs of raising children, increased risk of income instability, and a deeprooted consciousness of gender role divisions in labor.
Due to criticism against the pronatalist policy during World War II, the present Japanese policies to tackle low

1

The relative poverty rate of children had been rising since 2000s and scored 16.3% in 2012, which was ranked high among OECD
countries (OECD Family Database, CO2.2).
2 ቑ⏣㞞ᬸ㸦2008㸧ࠗࡇࢀ࡛࠸࠸ࡢ࠿ᑡᏊ໬ᑐ⟇࣑࠘ࢿࣦࣝ࢓᭩ᡣ
3 “White Paper on Society of Declining Birthrate 2017” (ᑡᏊ໬♫఍ᑐ⟇ⓑ᭩ ᖹᡂ 29 ᖺ), Cabinet Office, Government of Japan56

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Chapter 7 Family Policy

Population and Social Security in Japan 2019

fertility are oriented toward eliminating the divergence between desire and reality, such as promotion policies forgender equality, life-work balance, and support for families with children.
The Japanese government responded to the͆1.57 shock͇in 1990, when the total fertility rate as of 1989 was
the lowest since World Warϩ, and recognized the low fertility rate as a socio-economic problem. Since 1995,
national basic plans against the declining birthrate have been devised every five years: Angel Plan (FY1995-1999),
New Angel Plan (FY2000-04), Plan for Supporting Children and Childcare (FY2005-09), Vision for Children andChildcare (FY2010-14), and Third Outline of Measures against the Declining Birthrate (FY2015-19).
After the 2000s, as legal bases for policy planning against the declining birthrate, new acts were established topromote countermeasures against the low birthrate. The Basic Act for Measures to Cope with Society with Declining
Birthrate was enacted in 2003. In addition, to implement concrete reforms toward further reconciliation of work andchild rearing, the Act of Measures to Support Raising Next Generation Children was enacted in 2003, which
obligated prefectures, municipalities, employers of private companies, and public authorities to formulate “nextgeneration development support plans.”

7.2 Income Support for Families with Children
7.2.1 Child Allowance
Under strong political initiatives, a new Act of Child Allowance without income restriction was enforced in
April 2010; it was amended in April 2012, and an income threshold was reintroduced. The amended child allowanceis paid to households with children up to 15 years old, with the income threshold as listed in Table 7.1. The amountvaries from 5,000 to 15,000 yen according to the age of the children and the income level of the households.

Subjected
children
Income limit
BenefitamountShare ofexpenses
Benefitexpenses

Table 7.1 Contents of Current Child Allowance System (2018)
From newborn through the age of junior high school graduation (until the first
March 31 after their 15th birthday)
Exists (For example: An annual income of ¥9.6 million for a household with ahusband, wife, and 2 children)[1] For a household below the income limit- Younger than 3¥15,000/month- Age 3 or older but before elementary school graduation
first/second child¥10,000/month
third or later child¥15,000/month- Junior high school student¥10,000/month[2] For a household above the income limit (special benefits for the time being)¥5,000/month
National government, local governments, employer (younger than 3 and for
employees’ allowance)
Total benefit amount¥2,221.6 billion (FY2017 budget)57

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Chapter 7 Family Policy

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7.2.2 Child Rearing Allowance (For Single-Parent Households)
The Child Rearing Allowance is given to a single parent with limited income who is rearing a child/children
18 years old or younger. The monthly allowance is ¥42,290㹼9,980 for one child, ¥9,990㹼5,000 for the second
child, and ¥5,990㹼3,000 for each additional child. (Full payment is provided below the income limit. If it is over,there will be a range in the amount of payment because it will be paid in 10 yen increments until a certain income.)
Before August 2010, only single-mother households were eligible for this allowance, but now both single mothers
and fathers can receive the allowance. The income threshold for the Child Rearing Allowance is calculated according
to the number of children in the household. The income of family members other than the parent is also taken into
consideration.
7.2.3 Special Child Rearing Allowance (For Parents of Children with Disabilities)
The Special Child Rearing Allowance is given to parents who look after their children with disabilities at home(there are income limits). The monthly allowance for a child under the age of 20 is ¥51,700 for first-degree and¥34,430 for second-degree disabilities. In addition, the welfare allowance for children under the age of 20 withheavy disabilities is given to parents who take care of them at home. The monthly allowance is ¥14,650. On theother hand, the monthly allowance is ¥26,940 for those persons with heavy disabilities who are over 20 years old.
They are eligible for the national disability pension according to their degree of disability.

7.3 Services for Families with Children
7.3.1 Childcare Services
Municipal governments are required by the Child Welfare Law to provide daycare centers for children whoseparents require childcare for reasons such as work, illness, and care of other members of the family. Daycare centers
for children typically provide 8-11 hours of care for children from newborns to the age of primary school, but thedemand to extend the hours has been increasing. Staffing and other quality measures are tightly regulated by themunicipality. Fees for daycare centers for children vary according to parents’ income, from 0 to about 100,000 yen
per month, according to municipality, children’s age, and the income level of the parents.
A long waiting list to enter daycare centers for children is one of the urgent issues to be solved by thegovernment, especially at the municipality level. To tackle the shortage of facilities, the government started a new
system for supporting children and child-rearing in 2015 4. In addition to certified daycare centers, small-scale
daycare services that only keep children up to two years old, daycare services at offices, family style daycare services,
and in-home daycare services were eligible for public financial support. The certified childcare center system was
improved (kindergarten and daycare center cooperation-type certified childcare centers were legally established as
school and child welfare facilities.). Because the wait-listed children problem is mostly an issue only in urban areas,in areas where the child population is decreasing, the certified childcare center system is also a means ofconsolidating daycare centers and kindergartens.
The government set a special task force to solve the shortage of daycare services in 2001, 2008, 2010, and2013. Approximately 2.6 million children were cared for at daycare centers in April 2018, an increase of 68,000
4Mariko Ichii Abumiya, “New Trends in Preschool Education and Childcare in Japan: Transition to a ‘Comprehensive Support
System for Children and Child-Rearing’” (https://www.nier.go.jp/English/educationjapan/pdf/201503NTPECJ.pdf)

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since 2017. There are approximately 20,000 children who were on the waiting list in April 2018. That number had
decreased by 6,186 between 2017 and 2018 5.
7.3.2 Foster Homes (For Children of DV Victims and Without Parents or Guardians)
There have been increasing numbers of children suffering from domestic violence, from 11,631 in 1999 to
133,778 in 2015 (the number of consultations on child abuse). Younger children are more likely to be victims (seeTable 7.2).
There are 605 foster homes in Japan where approximately 25,000 children were present in 2017. An additional
5,400 children were supported by foster parents in 2017.

Table 7.2 The number of consultations on child abuse by age of children from April 2016 to March 2017
Age group

Total

Total
Age 0-2
Age 3-5
Age 6-12
Age 13-15
Age 16䇲18

133,778
27,04625,892
52,725
18,677
9,438

Physical
33,223
4,001
5,356
14,141
6,419
3,306

Sexual
1,537
47
122
519
496
353

Psychological
72,197
17,35315,00827,403
8,313
4,120

Witnessing
Violence(regrouped)
43,422
11,498
8,931
16,151
4,655
2,187

Neglected
26,821
5,645
5,406
10,662
3,449
1,659

Abandoned(regrouped)
37
23
6
7
-

Forbidden
go to school(regrouped) (regrouped)
682
235
166
7
197
22
262
146
41
50
16
10
Left behind

Source; “Report on Social Welfare Administration and Services” of the MHWL, 2017

7.4 Work-Life Balance – Parental Leave System
Japanese women tend to leave the labor market when they are rearing children. The female labor participation
rate of those aged 30 to 34 increased from 51.7% in 1990 to 75.2% in 2017, and that of women aged 25 to 29
increased from 61.4% in 1990 to 82.1% in 2017 6. However, there is a gap between married and single women. The
increase of single women’s labor participation contributed largely to raising the labor participation rate of those agegroups. More women postpone marriage or childbearing to avoid the opportunity cost of quitting their job. Therefore,
work-life balance measures to support women in taking both work and family responsibilities have become an
important part of family policy.
Besides promoting daycare service for pre-primary school children as well as low grade pupils in primaryschool, parental leave is one of the major supports for households with children. The percentage of employed
mothers who gave birth from October 2015 to September 2016 and began to take parental leave by October 2017
was 83.2% 7. The rate of continued employment before and after the first child of a woman who gave birth to a childin 2010 – 2015 (a woman who worked when a pregnancy was known) was 53.1% 8. Still, there are many women
who quit working after child birth. On the other hand, only 5.14% of employed fathers whose spouses gave birth5“Summary of Current Situation of Childcare Services” (April 1, 2018), MHLW.
(https://www.mhlw.go.jp/stf/houdou/0000176137_00002.html (in Japanese only)
6 “Labor Force Survey,” Statistics Japan. (Data in e-Stat [portal site of official statistics of Japan, https://www.e-stat.go.jp/en)
7 “Basic Survey of Gender Equality in Employment Management 2017,” MHLW. (Data in e-Stat, https://www.e-stat.go.jp/) (inJapanese only). This survey covers private sector employees only.
8 “15th Japanese National Fertility Survey,” Institute of Population and Social Security Research. (http://www.ipss.go.jp/sitead/index_english/Survey-e.asp )59

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Chapter 7 Family Policy

Population and Social Security in Japan 2019from October 2015 to September 2016 began to take parental leave by October 2017 9. Therefore, the government
enforces measures to promote work-life balance by encouraging fathers to take parental leave. In principle, those
who have children under the age of one can take parental leave (see Table 7.3).

Table 7.3 Outline of the Parental Leave System
As of December 2018
Implementation
DurationoooCompensation benefits

o
o
o

o

Parental leave
Establishment: 1991
Enforcement: 1992
Guarantee the right to take parental
leave until the child reaches one
year old (two years old undercertain conditions, such as being
unable to enroll the child in daycare
center)
One year before the child reaches
one year and two months in caseboth parents take childcare leave(Papa/Mama Parental Leave Plus)In the case a father takes childcare
leave within eight weeks after thechildbirth, he can take anotherchildcare leave
Payment will be covered by thelabor insurance
Up to 180 days, 67% of previous
wages
From 181 days to the day before thechild’s first birthday, 50% of
previous wages (if the leave is
extended up to two years old, it will
be paid until two years old)
Exemption of social insurance
premiumsoooFamily-care leave
Establishment: 1995
Enforcement: 1999
Guarantee the right to take familycare leave up to three times within atotal of 93 days for one family
member

Payment will be covered by thelabor insurance
67% of previous wages

7.5 Public Health Measures for Mothers and Children
The mother and child are protected by the Maternal and Child Health Act enacted in 1965. Health check-ups,
health guidance, and medical aid (including a subsidy for specific infertility treatment expenses) are provided by
local governments. The Mother and Child Health Handbooks, called “Boshitecho (ẕᏊᡭᖒ)” in Japanese, aregiven to all expectant mothers. Japan's infant mortality was as high as 150-160 per thousand births until the early
20th century but has declined sharply since the 1920s and attained an extremely low level, below 10, in 1975. Japan's
current figure of 1.9 (2017) is one of the lowest, even among developed countries 10. This may well be regarded asa triumph of Japan's MCH policy.
Right after the end of World War II, due to the post-war baby boom and the prevailing poverty, the healthcondition of mothers and children deeply worsened. Under such circumstances, the Eugenic Protection Act wasenacted in 1948, which certified doctors to perform induced abortions on women 21 weeks or less pregnant, under
the condition that the pregnancy or delivery was likely to jeopardize the woman’s health either physically or
910

See note 7.
“Vital statistics of Japan,” MHLW. (Data in e-Stat (portal site of official statistics of Japan, https://www.e-stat.go.jp/en))60

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economically, or the woman had become pregnant as a result of rape. The certified doctors were required to report
the number of abortions performed, and if the aborted fetus was 12 weeks or older, it was to be registered as a stillbirth. The law has since been amended and is now called the Maternity Protection Act (1996).
In 1996, support for infertility treatment was added to maternal and child health policy. Since that time, centers
for specialized infertility counseling have been established nationwide, and there were about 70 locations as of 2017.
A subsidy for specific infertility expenses was also started in 2004. This is an economic support measure forinfertility treatment, and its contents have been revised many times so far. Currently, couples receive a subsidy of
150,000 yen per woman who underwent in vitro fertilization before 43 years of age. (Women under 40 years old at
the time of treatment start can apply six times in total, but women aged 40-42 can only apply three times in total.
Women aged 43 and over are not eligible.) In the case of in vitro fertilization, if the couple receiving the subsidies
also takes care of the male side infertility treatment, there will be a subsidy of 150,000 yen. There are income
restrictions (the income for married couples is within 7.3 million yen). The number of applications has increased
each year. In 2004 when the system was started, the number of grants was 17,657, and in 2013 it had risen to148,659 11.

11

Data from the MHLW official web site. (MHLW) (in Japanese only)61

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Chapter 8 Policy for People with Disabilities

Population and Social Security in Japan 2019

Chapter 8 Policy for People with Disabilities
8.1 Policy for people with disabilities in Japan
Internationally, the government of Japan signed the Convention of Rights of People with Disabilities in 2007,
but it has not been ratified yet. Since the number of countries who have ratified this convention is as many as 138(as of October 2013), the Japanese government improves various social measures for people with disabilities, andis preparing conditions so that ratification of the convention may be made.
Under six welfare acts, including the Public Assistant Act, Child Welfare Act, Act on Welfare of Physically
Disabled Persons, Act on Welfare of Mentally Retarded Persons, Act on Social Welfare Service for Elderly, Act on
Welfare of Mothers with Dependents and Widows, services are provided to people with needs of such services.
The welfare system according to the type of disability (physical disability, mental retardation, mental diseases)caused the difference that the level of the facilities accommodation and the user-charge of the medical expense aredifferent in each type of disability. Since the number of people with physical disabilities, people with mental
retardation, and people with mental diseases amounts to 3,663,000, 547,000, and 3,233,000 respectively in the
middle of the 2000s (Table 8.1), it is necessary to unify systems and to reduce differences between the systems by
the kind of disability.

Table 8.1 The number of people with disabilities in 1,000 (2013)
㻌
Persons withphysicaldisabilities
Persons withintellectual
disabilities
㻌Persons withmental disorders㻌Younger than 18 years of age
Older than 18 years of age
Total
Younger than 18 years of age

Total
98
3,564
3,663
125

At home
93
3,483
3,576
117

Older than 18 years of age

410

290

120

Age unknown

12

12

0

Total
㻌
Younger than 18 years of age
Older than 18 years of age
Age unknown
Total

547
Total
179
3,011
11
3,201

419
Outpatient
176
2,692
10
2,878

Institutionalized
5
81
87
8

128
Inpatient
3
319
1
323

Sources: Cabinet Office White Paper on People with Disabilities, 2013, Table 1“The Number of People with Disabilities (Estimatedvalues)”. http://www8.cao.go.jp/shougai/whitepaper/h25hakusho/zenbun/h1_01_01_01.html#z1_01 (in Japanese). The data in thistable are based on the following statistics: “Persons with physical disabilities” living at home: Ministry of Health, Labour andWelfare (MHLW) “Survey on the Actual Status of Children/Persons with Physical Disabilities” (2006), Living in an institution:
MHLW “Survey of Social Welfare Institutions” (2006), “Persons with intellectual disabilities” living at home: MHLW“Comprehensive Survey on Children/Persons with Intellectual Disabilities” (2006), Living in an institution: MHLW “Survey on
Social Welfare Institutions” (2005), "The Mental Disorder", The Survey of the Patient’s: MHLW (2011)

In order to establish the coordination between such systems classified by the type of disability, the Services
and Supports for Persons with Disabilities Act (SSPDA) was enacted in 2005. Based on this act, a new scheme ofservice for three types of disabilities, including physical disabilities, mental retardation, and mental diseases, was62

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Chapter 8 Policy for People with Disabilities

Population and Social Security in Japan 2019

introduced in 2006. However, there was a strong resistance to introduce cost sharing among people withdisabilities. Under the Democratic Party, the discussion of reforming SSPDA was started and the amendment billincluding the reexamination of cost sharing (i.e., mitigation of user charge according to income) was approved in
the Parliament in December 2010. Finally the effort of such law revision bore fruit, and a new law (the Act for
Comprehensive Welfare for Persons with Disabilities) that corrected various incompleteness of SSPDA wasenacted in June 2012.

8.2 Various forms of support
8.2.1 Income support
The National Pension includes a scheme for adults with disabilities. It is called the Disability Basic Pension.
The pensioners include the persons who obtained disabilities in his/her childhood and those who were born withdisabilities. The Employee Pension includes a scheme for former employees who became disabled while they
were employed. Under the mutual aid associations, there are similar schemes for former employees withdisabilities including civil servants both of central/local governments and teachers/employees of private schools.
Also, under the Workers’ Accident Compensation Insurance, employees can receive pension for the loss of ability
due to injury and sickness at work. There are also similar workers’ accident compensation schemes for civil
servants.

Table 8.2 Income support for the People with Disabilities, 2012
Pensions

National Basic Pension

Employees' Pension InsuranceType

Flat rate

Income-related

Amount(Yearlyamount)¥983,100 (1st degree) or ¥786,500(2nddegree)+dependents
allowance

1.25 * Amount of Old Age Pension(1st degree) or 1.00 * Amount of
Old Age Pension (2nd degree)

Eligibility

Over 20 years of age, who have
paid 2/3 of premium period, andthose who are under 20 at the timeof becoming disabled and who haveturned 20

For those who have become
disabled during insured months (forthose under 300 months of
insurance period, 300 is applied)

Source: Annual report on social security statistics 2009, National Institute of Population and Social Security Research (IPSS)

Other than public pension benefits, there are allowances paid under certain conditions of disability by local
authorities. However, the allowance is not a universal scheme, but an individual local authority provides it out of
its own budget.
8.2.2 Service to support people with disabilities
The Act for Comprehensive Welfare for Persons with Disabilities was promulgated in June 2012, andreorganized the scheme of service for people including children under 18 years old with disabilities. The Act aims
at three goals. The first is an inclusive policy of three types of disabilities, i.e. physical, intellectual, and mental
disabilities. The second is a reorganization of services providing schemes in order to position the people with63

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Chapter 8 Policy for People with Disabilities

Population and Social Security in Japan 2019disabilities in the center. The third is enforcement of active labor participation of people with disabilities.

Table 8.3 Scheme of service under the Services and Supports
for Persons with Disabilities Act (SSPDA)
Home
nursing(Home help)

care

Nursing care forseverely disabled

theSupport for activities
Comprehensive support
for the severely disabled
Day services
for children
Respite care service
Nursing careservices

Nursing care

Personal care
Nighttime care at support
facilities for the disabled(Facility
entrance
support)Care home service
Independence Training(rehabilitation, daily life
training)
Employment shift
supportTraining
services

Continuous Employment
Support(Type
A:
Employment, Type B)
Group living support(Group homes)
Transportation support

Community
life support
services

Community
support center
Welfare homes

activity

Assist with bathing, toileting, and eating at home
Assist severely disabled persons who require constantnursing care with bathing, toileting, and eating at home,
and also provide outing assistanceOuting assistance and necessary support to avoid danger
surrounding persons with disabilities who have limitations
in making personal judgments
Comprehensive program to provide multiple services
including at-home care for persons having substantial needfor nursing care
Training on basic daily activities and orientation to adjust
to group living offered for children with disabilities
Respite care (daytime and nighttime) at facilities withbathing, toileting and eating, in case family caregivers
become ill or unable to provide the necessary nursing care
Daytime assistance for persons who require medical
attention and constant nursing care including functional
training at medical institutions, medical management,
nursing care, and personal care
Daytime assistance for persons who require constantnursing care including support with bathing, toileting andeating,andprovisionofopportunities
forcreative/productive activities
Nighttime support for persons entering care facilities
including bathing, toileting, and eating assistanceNighttime or holiday support at group living residences
including bathing, toileting, and eating assistanceTraining provided for a certain period of time to improvephysical function and daily living abilities so that theperson can achieve an independent daily/social life
Training provided for a certain period of time to enhancenecessary knowledge and skills for employment, offered topersons who wish to be employed in an ordinal
corporation
Provide work place and necessary training to enhanceknowledge and abilities for persons who have difficulties
working in an ordinal corporation
Nighttime or holiday services at group living residences
including consultation and daily support
Assist disabled persons whotransporting themselves outdoors

have

difficulties

in

Facility offering opportunities for creative/productive
activities and promoting social interaction

Source: Web-site of Ministry of Health, Welfare and Labour( https://www.mhlw.go.jp/bunya/shougaihoken/service/taikei.html ).

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The residential service regrouped with two types, which is day activities and residential support. Within the
day activities, there are the care benefit, the training benefit, and the community based support programs. (See theTable 8.3)
8.2.3 Promotion of vocational rehabilitation services and employment of people with disabilities
As there are lots of challenges for people with disabilities to be employed, vocational rehabilitation services
that include vocational evaluation and guidance, work preparation support, assessment of persons with intellectual
disabilities, and comprehensive employment support for persons with mental disabilities are very important. These
services are provided by Local Vocational Centers and Large Region Vocational Centers for People with
Disabilities under the Law for Employment Promotion of Persons with Disabilities.
The employment of people with disabilities in many cases requires employers to pay extra costs for preparing
special accommodation in the workplace facility, equipment, and environment modifications, and adoption of
special personnel management programs. In order to promote and secure employment of people with disabilities,
the government provides the subsidy that fills up these costs of the company employing the people withdisabilities. On the other hand, the government imposes a surcharge if a company does not attain the employment
rate for the people with disabilities. This system (The levy and grant system for employing people withdisabilities) is enforced under the “Law for Employment Promotion of Persons with Disabilities.”

8.3 Current Issues
There are similarities between welfare services for people with disabilities and long-term care for the elderly
in terms of offering care to the person who has needs. The recent reform of the long-term care insurance for theelderly greatly promoted replacing the facility centered services with the integrated community care support
coupled with home care services. A similar trend is now starting for the environment surrounding persons withdisabilities, so that they can continue to live in the community which they got used to. According to the flow ofsuch reforms, the Law for Promotion of Dissolution of the Discrimination for People with Disabilities wasenacted at last in 2013. By this law, one of the conditions of ratifying the Convention of Rights of People with
Disabilities is filled, and the day of ratification is approaching even in Japan. The welfare policy for people withdisabilities in Japan is continuing to develop along with the current improvement of global welfare, though there
are remaining various tasks.

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Chapter 9 Labor Insurance

Population and Social Security in Japan 2019

Chapter 9 Labor Insurance
9.1 Overview
Japan’s unemployment rate continues to remain relatively low compared to other advanced countries.
However, the length of job tenure that used to be regarded as one of the characteristics of the Japanese labormarket has also declined in recent years 1. As stable jobs have decreased, there is a growing need for support for
unemployed persons. This chapter lays out two social security programs: Employment Insurance and Workers’
Accident Compensation Insurance. In Japan, the term “labor insurance” is used to indicate these two social
insurances. Schemes of the two insurances are independent of each other, but they have similar characteristics inthat the government is the insurer, and the prefectural labor bureau collects the insurance premiums.

9.2 Employment Insurance
9.2.1 Basic Scheme
Employment insurance consists of three main pillars: unemployment benefits, service for employment
stabilization, and service for developing human resources. Through the unemployment benefits, a cash benefit isprovided in case an employee loses the job, which can be used as livelihood support and for the promotion ofreemployment. The unemployment benefits include a variety of benefits such as Job Applicant Benefits,
Employment Promotion Benefits, Educational Training Benefits, and Continuous Employment Benefits. These
items are further explained below. The service for employment stabilization is provided to support employers inpreventing them from laying off their employees. The service for developing human resources assists both
employed and unemployed persons in acquiring skills.
The entire scheme is shown in Figure 9.1.
Since April 2010, any employee 1) whose scheduled working hours are 20 hours or more per week and 2)
who is expected to be employed for 31 days or more, is considered insured under the employment insurance.
The employment insurance is funded by both insurance premium and tax revenue. The insurance premium is
paid in principle by both the employer and employee. Based on a balance of expenditure and revenue, theinsurance premium is determined systematically within a defined range with the approval of the MHLW 2.

1

Japan is believed to be a country in which it is most difficult for employers to fire their employees owing to the regulations forprotecting workers, but whether the regulations are actually strict or not is still debatable.
2
The insurance premium does not vary by individual firm.

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Population and Social Security in Japan 2019

Figure 9.1 Employment Insurance

Job Applicant Benefits
Unemployment
Benefits

Basic Allowance
Skill Acquirement Allowance

Generally Insured Persons
Lodging Allowance
Injury and Sickness Allowance
Insured Elderly Persons
Specially Insured Persons
in Short-Term
Employment
Insured Day Workers

Job Applicant Benefits for the
Elderly
Special Lump Sum Payment
Job Applicant Benefits for Day
Workers
Employment Promotion
Allowance

Employment
Insurance

Employment Promotion
Benefits

Moving Expenses
Job-Seeking Activities Expenses

Educational Training
Benefits

Educational Training Benefits

Continuous Employment
Benefits for the Elderly
Continuous Employment
Benefits

Childcare Leave Benefits
Family Care Leave Benefits

Services for Employment
Stabilization
Related Services
Services for the Human
Resources Development

9.2.2 Basic Allowance for Job Applicants
Basic allowance is one of the Job Applicant Benefits and the most common benefit of employment
insurance 3. The basic allowance is paid when the insured former employee has lost his/her job. The benefit
payment period of the basic allowance is between 90 and 360 days 4 and varies by reason for unemployment,
insured period, and age of the beneficiary. The benefit period is basically longer if the insured period is longer. If
unemployment is due to “company bankruptcy” or involuntary leaving such as “termination,” or “expiration of
3
4

It is often referred to simply as “Unemployment Benefits.”
For those who have difficulty in finding employment, such as disabled persons, the benefit period is between 150 and 360 days.

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contract term,” the benefit period is basically set longer than unemployment due to other reasons and is set longer
with higher age. Tables 9.1 to 9.3 show the number of days the allowance is paid for each kind of recipient.
In case of job separation for his/her own reasons, benefits start approximately three months after
unemployment (if the person is still unemployed at that time). The benefit amount is 50% to 80% of the average
wage for the six months prior to unemployment (45% to 80% for persons aged 60 and 64), and the rate is higher if
the wage prior to unemployment is lower.

Table 9.1 Duration of Basic Allowance (for involuntarily terminated employees)(unit: days)
Years of being
insuredMore than 1
year and lessthan 5 years

More than 5
years and lessthan 10 years

More than 10
years and lessthan 20 years

More than 20
years

90

120

180

-

90

180

210

240

240

270

45 ~ 60

180

240

270

330

60 ~ 64

150

180

210

240

Age ofbeneficiaryLess than 1
year

Less than 30
30 ~ 34
35 ~ 4490

Table 9.2 Duration of Basic Allowance (for those leaving jobs for reasons other than above).
(unit: days)
Years of being
insuredAge ofbeneficiaryAll

Less than 1
year

More than 1
year and lessthan 5 years-

More than 5
years and lessthan 10 years
90

More than 10
years and lessthan 20 years

More than 20
years

120

150

Table 9.3 Duration of Basic Allowance (for those difficult to employ).
(unit: days)
Years of being
insuredAge ofbeneficiaryLess than 45
45 ~ 64

Less than 1
year

More than 1
year and lessthan 5 years

More than 5
years and lessthan 10 years

More than 10
years and lessthan 20 years

More than 20
years

300

150

360

In FY2017, the average number of those who received the job applicant benefit per month were 378,344, andthe total amount of the benefit payment was approximately 584 billion yen.
9.2.3 Employment Promotion Benefits, Educational Training Benefits
Employment Promotion Benefits are paid to those who find regular jobs and non-regular jobs 5. Those

5

Generally the meaning of “regular” and “non-regular” jobs are “permanent” and “temporary” jobs. See 9.2.5 more specifically.

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Chapter 9 Labor Insurance

Population and Social Security in Japan 2019qualified to receive the basic allowance and who are successful in finding employment with a certain benefit
period remaining are eligible to receive these benefits.
Educational Training Benefits are paid to those who have been covered by employment insurance for acertain period when they attend and complete education or training that is provided by the private sector anddesignated by the MHLW. It compensates 20% of the educational training expenses (up to ¥100,000).
9.2.4 Continuous Employment Benefits
Continuous Employment Benefits are paid to insured persons who have experienced difficulty in continuing
employment such as aging, child rearing, or nursing care. There are three programs in Continuous Employment
Benefits: Continuous Employment Benefits for the Elderly, Childcare Leave Benefits, and Family Care Leave
Benefits.
The Continuous Employment Benefits for the Elderly is provided to insured persons aged 60 to 64 years old
who have been covered by employment insurance for five years or more. If a person’s wage drops to less than
75% compared to the wage at age 60, then up to 15% of the monthly wage is paid. The benefit period is provided
up to the 65th birthday.
The Childcare Leave Benefit is for insured persons taking childcare leave to care for infants under the age ofone (or the age of one and a half or two if extension is permitted). They receive benefits equivalent to 67% of thewage before taking leave (with an upper limit), assuming that the person was insured for a certain period prior to
the start of the leave. In the past, part of the benefit was paid six months after returning to work, but the benefit iscurrently paid in full during the leave.
The Family Care Leave Benefit, like the Childcare Leave Benefit, is a system for those taking leave toprovide nursing care for his/her family. The benefits are equivalent to 67% of the wage before taking leave (withan upper limit) for a maximum of three months.
9.2.5 Employment Situation and Current Issue of Employment Measures
In recent years, non-regular workers such as fixed-term contract workers, part-time workers, and dispatchedworkers have been an increasing trend, accounting for about 40% of the total employees. These factors are mainly
attributable to an increase in non-regular employment due to continued employment in the elderly and an increase
in workers such as women who start working mainly part-time with the economic recovery. However, especiallyin young people aged 25 to 34 years old, there are quite a few workers who work as non-regular employees even
if they wish for regular employment.
Workers with non-regular employment have problems such as unstable employment, low wages, and poor
ability-development opportunities. For this reason, it is important to promote regular employment of irregularly
hired workers who wish regular employment and work on improving employment stability and treatment.

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Chapter 9 Labor Insurance

Population and Social Security in Japan 2019

9.3 Workers’ Accident Compensation Insurance
9.3.1 Outline of Workers’ Accident Compensation Insurance
Workers’ Accident Compensation Insurance is a system to provide benefits to compensate for workers’ injury
or sickness while at work or commuting to and from work. It also has programs to promote the social
rehabilitation of the afflicted worker. All employees, regardless of employment type or business size, are coveredby this insurance, which is, in principle, funded by premiums paid by employers. The premium rate varies greatly
by industry, as shown in Table 9.4. For firms with more than 100 employees, the premium increases or decreases
based on the number of accidents caused in the firm for the past three years.

Table 9.4 Premium Rates of Workers’ Accident Compensation Insurance by Industry(unit: ‰)Industry
Forestry
Fishery
MiningConstruction
Manufacturing
Transportation
Energy (electricity, gas, water, or heat supply)
OthersPremium Rate60
19 ~ 38
3 ~ 88
6.5 ~ 79
2.5 ~ 26
4.5 ~ 133
2.5 ~ 49

Benefits include medical treatment (compensation) received at medical institutions, temporary disability
benefit to compensate for wages during the treatment period, injury and disease benefit or physical disability
benefit for injuries/diseases that are not cured or leave disabilities, and survivors’ benefit paid to the family in casea worker dies due to a work-related reason.

9.3.2 Current Trends in Industrial Accidents
Generally, industrial accidents tend to decline over the long term. However, regarding brain/heart disease andpsychiatric disorders due to work, both the number of claims for workers' compensation insurance benefits and thenumber of payment decisions have increased. Therefore, prevention of long-term work of workers and mental
health measures are important subjects.

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Chapter 9 Labor Insurance

Population and Social Security in Japan 2019

Table 9.5 Outline of the Employment Insurance System in Japan
Schemes are as of April 2018.

1)

The Insured(b) Specially Insured Persons
in Short-Term Employment(a) Generally Insured Persons

Number of Insured
Number of employers
Insurer
Premium rate:
The Insured
Employer6) Gov't Subsidy:
Administrative cost
Benefits paid7) Unemployment Benefits(A) Job Applicants' Benefits
䐟 Basic Allowance
Requirements
Amount2)
3)
4)
5)(General )
0.3%
0.6%

42.89 (million)
2.23 (million)
Government(for Agro-Forestry)
0.4%
0.7%

25% of Job Applicant Benefits(except Job Applicant Benefits for Day Workers),

All

See Table 9.1-9.3

䐠 Skill Acquirement Allowance䐡 Lodging Allowance䐢 Injury & Sickness Allowance(B) Employment Promotion Benefits

Insured Day Workers
13 (thousand)(for Construction)

In addition to the left items¥48䡚88/day¥48䡚88/day

0.4%
0.8%

All
1/3 of benefits

12.5% for Employment Continuation benefits

Has been employed since before turning 65, and Paid 26 days of premium in thetill after 65, and insured for 6 months in the year
Special Lump Sum Payment: 30
past 2 months(currently 40) days worth of the Basic
45 to 80% of previous wage
¥7,500䡚¥4,100/day
Allowance
For 30 days if the insured period is less than 1
13䡚17 days
year, for 50 days if insured for 1 year or more

1䠅Scheduled weekly working hours are 20 hours or more and2䠅is expected to be employed for 31 days or more
50 to 80% of previous wage

Duration(c) Continuously Employed Elderly Persons(Over Age 65)(1) ¥500/day for course fee, (2) up to ¥20,000 of transportation cost
¥10,700/monthSame as the day rate of the Basic Allowance[ I ] Employment Promotion Allowance(1) Reemployment Allowance: Remaining number of payment days x 50-60% x
Basic daily allowance(2) Employment Allowance: Scheduled working days x 30% x Basic daily allowance

---

---

Eligible for [ I ](3) in the left column---

Eligible for [ I ](3) in the left
column

---

---

---

---

---

---

---

---

---

---

---

---

---

(3) Outfit Allowance for Regular Employment (for disabled, etc.): Remaining numberof payment days x 40% x Basic daily allowance[ II ] Moving Expenses[ III ] Job-Seeking Activities Expenses(c) Education & Training Benefits
Requirements
Amount(D) Continuous Employment Benefits
䐟 Continuous Employment Benefits for the
Elderly
Requirements
AmountDuration
䐠 Child Care Leave Benefits
Requirements

AmountDuration䐡 Family Care Leave Benefits
Requirements
AmountDuration
Source : HelloWork Internet Service,

Those who have completed the study & training designated by the ministry with morethan 3 years of insured period
20% of expense (up to ¥100,000)

Those aged 60 to 64 year olds who have been insured for at least 5 years, and whose
wage is less than 75% of the wage at 60.
15% of the wage after 60 (if the current salary is 61-75% of the wage at 60, the rate
is reduced gradually)
Until the 65th birthday (if re-employed after receiving Basic Allowance, 2 years if theremaining days of Basic Allowance is over 200 days, 1 year, if 100 days or more andless than 200 days.)
Those who have taken child care leave to raise a child of less than one year old (oneand-a-half-year old or two years old if extension is permitted), and who have worked
more than 11 days in a month for more than 12 months in the past two years
67%(50% from 6 months after the leave) of wage before the leave
During the child care leave
Those who have taken family care leave and who have worked more than 11 days ina month for more than 12 months in the past two years
67% of wage before the leave
Up to three months
https://www.hellowork.go.jp/insurance/insurance_continue.html

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For More Information

National Institute of Population and Social Security Research
http://www.ipss.go.jp/index-e.asp(Our Publication)

http://www.ipss.go.jp/site-ad/index_english/publication-e.html(Survey: Annual Population and Social Security Surveys)
http://www.ipss.go.jp/site-ad/index_english/Survey-e.asp(Japanese Social Security Statistics DB)(Population & Household Projection)

http://www.ipss.go.jp/ssj-db/e/ssj-db-top-e.asp
http://www.ipss.go.jp/site-ad/index_english/population-e.html

Government and related organizations
Ministry of Health, Labour and Welfare

http://www.mhlw.go.jp/english/index.html

Cabinet Office (Policies on Cohesive Society)http://www8.cao.go.jp/souki/index-eng.html

Statistics Bureau (Ministry of Internal Affairs and Communications)Portal Site of Official Statistics of Japan

http://www.e-stat.go.jp/SG1/estat/eStatTopPortalE.do

National Statistics Center
Japanese Law Translation (Ministry of Justice)

http://www.stat.go.jp/english/

http://www.nstac.go.jp/en/index.html
http://www.japaneselawtranslation.go.jp/?re=02

Research Institute (related to MHLW)National Institute of Public HealthNational Institute of Infectious Diseases
The Japan Institute for Labour Policy and Training

http://www.niph.go.jp/index_en.html
http://www.nih.go.jp/niid/en/
http://www.jil.go.jp/english/index.html

International Medical Center of Japan

http://www.ncgm.go.jp/en/

National Institute of Health Sciences

http://www.nihs.go.jp/english/index.html

National Institute of Biomedical Innovation, Health and Nutrition http://www.nibiohn.go.jp/index_e.html
National Cancer Center, Japan
National Rehabilitation Center for Persons with Disabilities

http://www.ncc.go.jp/en/index.html
http://www.rehab.go.jp/english/index.html

The views expressed herein are those of the authors and not necessarily those of the National Instituteof Population and Social Security Research, Japan.

EditorReiko Hayashi: Director, Department of International Research and Cooperation
National Institute of Population and Social Security Research
Written and revised from 2014 version by ;Chapter 1 (Population)
Reiko Hayashi, Motomi Beppu, Futoshi Ishii, Saori Kamano, Masahiro Kishi,
Katsuhisa Kojima, Yu Korekawa, Wataru Kureishi, Rie Moriizumi, Masataka Nakagawa,Mariko Nakamura, Kota Toma, Kuriko Watanabe, Katsuya Yamamoto
Chapter 2 (Overview of Social Security in Japan)

Katsuhisa Kojima

Chapter 3 (Pensions)

Itaru Sato

Chapter 4 (Health Care)

Nobuyuki Izumida

Chapter 5 (Welfare for the Elderly)

Katsuhisa Kojima

Chapter 6 (Public Assistance)

Kuriko Watanabe

Chapter 7 (Family Policy)

Rie Moriizumi and Junko Takezawa

Chapter 8 (Policy for People with Disabilities)

Yoshihiro Kaneko

Chapter 9 (Labour Insurance)

Ashiya Kuroda

We invite comments and suggestions to be reflected in future editions of this publication.
Please send them through our web site;
http://www.ipss.go.jp/mail/e_sendmail/mail.html

Social Security in Japan (2019 edition)
National Institute of Population and Social Security Research (IPSS)
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Tel: +81-3-3595-2984

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URL: http://www.ipss.go.jp/index-e.asp
ISSN 2186 – 0297
IPSS Research Report No.85
July 2019