Berlitz Union

Public Social Welfare System

What is the Public Social Welfare System?
The Public Social Welfare System is a series of social insurance programmes that include social, employment, medical and pension insurance benefits to ensure a minimum level of quality of life.

Are foreign residents obliged to join the Public Social Welfare System?
All residents in Japan are required to join the Public Social Welfare System in one form or another regardless of nationality. Premiums you pay and schemes you join will vary depending on employment status, income, company size, and scope of operations.

What Public Social Welfare Schemes are available?
There are numerous Public Social Welfare Schemes available. This guide will focus on the four schemes that offer benefits for the majority of foreign nationals employed in Japan.

Unemployment Insurance
Public Pension
Health Insurance
Workers' Accident Compensation Insurance

UNEMPLOYMENT INSURANCE
Unemployment Insurance (officially known as Employment Insurance) is a benefit that provides an allowance to an unemployed worker for general living expenses while seeking stable employment. Enrollment requires that you work for 20 hours or more per week.

Employment Insurance is administered by the Public Employment Security Office ("Hello Work"). You qualify for this if you are fired or made redundant, if the company doesn't renew your contract, or if you leave the job at the end of your contract. If you voluntarily leave your job before the end of your contract, you don't automatically qualify. Companies (except small businesses in fishery, forestry and agriculture) must enrol workers on this scheme. Unfortunately many companies evade their obligations in this regard. Subcontract workers and undocumented workers are not eligible for enrolment on this scheme. The worker and the employer each pay a contribution. The worker's contribution is 0.7% of salary, which is deducted from each month's salary payment. The employers premium is 1.05% (as of Oct 2002).

The main unemployment allowances are:

Basic Allowance (Kihon Teate)
In case of unemployment, to enable the unemployed seek stable employment. According to the worker's age and years of service, 50-80 percent (%) of his/her daily wage will be provided for 90 to 300 days.

Technical Skill Learning Allowance (Gino Shutoku Teate)
Allowance provided for the learning of technical skills by the unemployed. To undertake training, permission (a public occupation training order) must be received from the public employment offices' general manager.

Lodging Allowance (Kishuku Teate)
Provided when it is necessary for the unemployed to live independently from their supporting family to undertake job training.

Injury/Sickness Allowance (Shobyo Teate)
Provided instead of a basic allowance when the unemployed is unable to take a job due to injury or illness after having applied for work through the public employment office.

Job Starters' Allowance (Saishushoku Teate)
Provided when the unemployed finds stable employment at an early stage of receiving the Basic Allowance. Note that certain requirements must be met.

Education and Training Allowance (Kyoiku Kunren Kyufukin)
Provided to increase labor skills, under certain conditions 40 percent of the cost of education and training can be provided. (max. 200,000 yen)

Childcare Leave Basic Allowance (Ikuji Kyugyo Kihon Kyufukin)
Provided to enable the employee to take leave from work in order to take care of a child aged under 12 months.

Nursing Leave Allowance (Roujin Kaigo Teate)
Provided to enable an employee to take leave from work in order to care of a family member of members. The employer and employee jointly pay the premium in proportion to the employee's wage. Generally the employee pays the sum of 4/1000 (in case of the forestry-fishery industry, brewery and construction industries its 5/1000) of the wage.

Even in the case that your company was not participating in the unemployment system, you can enter up to two years retroactively. You can receive unemployment benefits for the period you are unemployed in proportion to your wages when you were employed. To receive the allowance you must have been contributing to the scheme for more than six months during the year before you became unemployed.

Application Procedure For Basic Allowance
Get a "letter of separation" (rishokuhyo) from your company. This will detail the period for which you have participated in unemployment insurance, your wages, and the reason for leaving your job. You take the letter of separation to your local public employment security office and once you have applied to search for work, you may receive acknowledgment of your unemployed status. You should keep in mind that if you choose to quit your company you might have to wait for between one and three months before receiving any allowance. How long you can receive the allowance for depends on your age and how long you have participated in the system, but it varies as below.

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PUBLIC PENSION
All residents in Japan, aged between 20 and 60 years of age are required to pay pension premiums regardless of nationality.

Types of Public Pensions
Salaried employees working full-time (or 75% of a full-time workers' schedule) pay into the "kosei nenkin" system, or the company employee pension system. These premiums are deducted from their pay.

Temporary workers contracted to work for a period of less than two months or those who are not defined as full-time workers are required to pay premiums into the 'kokumin nenkin' system, or the national pension system.

Contributors become eligible for retirement benefits when premiums have been paid for 300 months (25 years). These months do not need to be consecutive and can be received even after leaving Japan.

Would foreign nationals be wasting their money if they left Japan before qualifying for their pension?
Since 1995, contributors to the company and national company system who have paid for more than six months can claim a refund upon leaving Japan. The refund varies depending on which system you join and how much your premiums are. The minimum refund under the national pension system is 39,900 yen (more than 6 months premiums but less than 12) and the maximum 239,400 yen (36 months premiums or more). There is a three year ceiling regardless of the length of time premiums were paid. Under the company employee pension, the refund depends on salary and is calculated by the Social Insurance Agency. This system also limits refunds to a three year ceiling.

How do I apply for a refund?
Applications for refunds should be made within two years of leaving Japan. Those who have acquired Japanese nationality, have a fixed address in Japan or have already received benefits are not eligible for a refund of premiums.

Applicants must have the following:
an application form (available from your local social security or municipal office), a pension book, a copy of their passport, a bank certificate confirming your bank account details or the bank can seal the application form. These documents should be mailed to the Social Insurance Agency in Tokyo. The address is:

The Social Insurance Agency Office
03-3334-2111
5-24 Takaido-Nishi 3-Chome, Suginami-Ku, Tokyo 168-8505

Payment
The Lump-sum Withdrawal Payment will be paid in your home country's local currency. A remittance charge from Japan is not required, however, a handling fee when depositing in an overseas bank may be charged.

Income tax on Company Employee Pension System
20% income tax is imposed on the payment for Lump-sum withdrawal payment under the company employee pension system. Claims for this tax refund can be made at the tax offices before leaving Japan by submitting a 'notification of tax agent' to the relevant tax office (usually where Alien Registration is registered) and designating an agent. An eligible tax agent is required to be resident in Japan. When the lump-sum withdrawal payment is made, a notification will be sent, which needs to be sent to the tax agent to claim for tax refund on behalf of the claimant.

BILATERAL AGREEMENTS
Does my country have a bilateral social security treaty with Japan?
Germany and Britain have agreements with Japan that aim to stop their citizens from paying double pension premiums. Germans and Britons are exempt from contributing to Japan's public pension scheme if their stay is less than 5 years. If their stay is longer than five years they must pay. In this case, they can claim a refund after leaving Japan.

Japan is expected to sign similar pacts with the United States and South Korea by the end of March 2006.

What are the benefits of enrolling in the Public Pension System?
Enrolling on the Public Pension System grants the following;

• Retirement Pension

• Disability Pension

• Bereavement Pension

Retirement Pension
After paying premiums for 300 months (25 years) up to 480 months (40 years) you are entitled to a retirement pension. The amount you receive will depend on how much you've paid and for how long.

Disability Pension
A disability pension is paid to residents enrolled in either the company employee or national pension system should they sustain an injury or illness and become handicapped.

Bereavement Pension
A bereavement pension is paid to support the family member(s) of the deceased. The pension will be paid to the wife or husband. If neither parent is alive then the child will receive the pension.

Premiums as of December 2003 stand at:

National Pension System:
13,300 yen

Company Pension System
13.58% of salary (shared between company and employee). These rates will rise as the proportion of pensioners increases. The Government would like to see a 20% premium.

Permanent Residents - Did you know?
Foreign Nationals who have obtained their Permanent Resident Visas can backdate eligibility to when they were 20 years old. This means that if you enroll on the system when you are 40 years of age you will still have gained 20 years of entitlement. You won't receive any extra money for that time but you will only have to pay 5 years of premiums before you are eligible to receive a pension.

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HEALTH INSURANCE
Persons who live in Japan for more than 1 year are required to enroll in a medical insurance scheme. There are two medical insurance schemes: Company Health Insurance (Shakai-hoken/kenko-hoken) and National Health Insurance (Kokumin-kenko-hoken)

Company Health Insurance (Shakai-hoken/kenko-hoken)
If employed by a company, as a full time worker or working more than 75% of a full time workers' schedule, you and your family can enroll in the Shakai-hoken scheme. Application and payment can be done at your place of employment. The premium is based on your average monthly earnings and deducted directly from your salary. Under this scheme you and your family are required to pay 30% (percent) of the total medical expenses. However, there is a ceiling on how much you are expected to pay. Once medical expenses reach a certain limit, participants are entitled to a refund of additional costs.

National Health Insurance (Kokumin-kenko-hoken)
Persons who are studying, self-employed or working part-time etc. (those ineligible for social insurance) must enroll in the National Health Insurance scheme. When you enroll you will receive a health insurance card. Show the card at the hospital or clinic when you go for treatment and you only pay 30% of medical expenses.

Application Procedure
Once you have decided to live in Japan for more than 1 year, apply at the Insurance and Pension Section of the Ward Office in your area. Take your Foreign Residents Registration Card.

Payment of National Health Insurance Premium
Insurance premiums are calculated for a one-year period based on your previous years' income. The premium is paid in ten monthly installments, from June until March the following year.

Methods of Payment
(1)Automatic withdrawal from your bank or post office account.
(2)Take the payment slip and pay directly at the bank, post office, ward or branch office.

Insurance premiums do not change regardless of how many times you receive medical treatment during the year.

Health Insurance Certificate
Only one health insurance card/certificate is issued per family. When visiting a hospital or clinic, make sure to take this card with you. When traveling in Japan take your insurance card with you as it can be used at any hospital or clinic. (However, it can not be used overseas)

National Health Insurance cannot be used in the following instances
Treatment outside Japan
Normal pregnancy or childbirth
Termination of pregnancy performed for financial reasons
General health check-ups, cosmetic dentistry and preventative vaccinations
Injury caused by fighting or other willful misconduct

Receiving medical treatment without possession of your insurance card
You will be required to pay the entire amount of the bill. However, you can file for reimbursement by taking your receipt and statement to the Ward or Branch office. After examining your case, the office will reimburse 70% of the total cost. If you receive medical treatment overseas you will not be reimbursed the medical expenses.

Medical Expense Subsidy Scheme
This scheme provides a refund for the portion of your medical expenses that exceed the established limit (kogakuryoyohi). Several months after you receive treatment you will receive notification from the ward office or branch ward office on how to apply for a refund. Please keep all hospital receipts.

Low-income Earners Scheme
Persons without an income or with an income below a certain fixed amount may be eligible for a 20%, 50% or 70% 'reduced insurance premium'.

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WORKERS' ACCIDENT INSURANCE COMPENSATION
Many foreign nationals don't know that there is a workers' disability program in Japan. It is often difficult for foreign workers to get information about this entitlement. For instance, if you are injured on your way to or from work or suffer from an industrial accident you may qualify for assistance with payment of your medical bills and any lost salary. Here's what you need to know:

If an employee suffers from an industrial accident (injury, disease, physical handicap or death) at the workplace or a commuting accident while on the usual route to and from his or her working place it can be regarded as a workers' accident (Rosai) for which the necessary compensation can be given by the statutory insurance to the worker or to their bereaved family. All companies are obliged to pay workers' accident insurance premiums to the Government to cover their employees provided they employ more than one person. Workers' Accident Compensation Insurance applies to any worker regardless of visa status or contract limitations. The full cost of all premiums (Hokenryo) are borne solely by the employers, not employees.

If you think your accident is a 'Rosai' accident, then ask your local hospital for the necessary papers.  It is suggested you do not use the health insurance system (Kenko-Hoken) should your injury be work related. Also try to get the contact details of any witness to the accident.

'Rosai' is a 'no-fault' accident insurance. However, if you are directly injured by someone or something and they admit their responsibility for the accident, they may be liable to pay your medical expense and/or lost salary, and you do not have to go through the 'Rosai' process. But it may be in your interests to find out about 'Rosai' anyway.

To apply for appropriate workers' accident insurance benefits, the worker of their bereaved family must fill in the application forms and submit them to the Director of Labor Standards Inspection Office having jurisdiction over the area in which the workplace establishment is located.

Benefits include:

Medical Treatment Compensation
When workers require treatment for industrial accidents or commuting accidents.

Temporary Disability Compensation
When a worker is unable to work due to injury and cannot receive wages.

Long Term Disability Compensation
When a worker is still unable to work after one year and six months but whose condition falls below that of permanent disability.

Permanent Disability Compensation
When a worker is afflicted with a permanent handicap.

Funeral Expenses
When a worker has died due to an industrial or commuting accident.

Nursing Care
When a worker is in need of nursing care.

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