10.24.1.30 Social Security System in Japan

Japan's social security system

The old-age pension in Japan is basically split into 2 different programs, the National Pension and the Employees' Pension systems. When calculating the amount of Japanese pension payable, the amount of an individual's past contributions are adjusted to present day values.

The Ministry of Health, Labour and Welfare (MHLW) is responsible for making policy decisions and supervising the operation of both programs. The Social Insurance Agency (SIA) administers both programs nationally and internationally. The SIA will be abolished in the near future and replaced by a non-governmental public corporation named the 'Japan Pension Agency'.

National pension

The Japanese National Pension scheme started in 1961.

The National Pension scheme covers Japanese Old Age Basic Pension, Old Age Welfare Pension, Disability Pension and Survivors' Pension.

All persons residing in Japan aged 20 to 60 participate in the National Pension. Voluntary coverage is available for persons aged 60 to 64 and for Japanese citizens residing overseas. Persons born before 1 April 1965 can also pay contributions between the ages of 65 and 69 if they cannot meet the required qualifying period by the age of 65.

The minimum qualifying period for Japanese Old Age National Pension is 25 years worth of periods of coverage. Pension is usually paid at age 65, though an early (reduced) pension can be paid from age 60 and an increased pension can be paid if deferred to at least 66 years of age. The pension is paid every 2 months.

No supplements are paid for a spouse or children for Japanese Old Age National Pension.

Employees' pension systems

The Employees' Pension systems include salaried workers contributing to the Employees Pension Insurance (Old-Age Employees' Pension) and public service workers and others contributing to Mutual Aid Associations.

Just over 50% of all Japanese residents (who already participate in the National Pension scheme) also participate in the employee pension systems.

The Japanese Employees' Pension Insurance scheme started in 1942.

The minimum qualifying period for Japanese Old Age Employees' Pension is 25 years worth of periods of coverage. Pension is usually paid at age 60, although miners and seamen can claim at age 57. The pension amount paid to persons aged 60 to 69 is suspended partially or entirely if the persons are still employed, however if they are aged over 65 they can still receive the Old Age National Pension.

The 'flat-rate portion' of Japanese Old Age Employees' Pension is being raised from 60 to 64 in one year increments scheduled every 3 years between 2007 and 2018. The pension is paid every 2 months.

A dependent spouse supplement can be paid with a Japanese Old Age Employees' Pension if the dependent spouse is younger than age 65. A supplement can also be paid for dependent children up until the end of the fiscal year in which they reach the age of 18 (age 20 if disabled).