The Ministry of Foreign Affairs of Japan

Article 9

The Government implements social security by providing medical care, injury or sickness benefits, maternity benefits, old-age pensions, disability benefits, survivor benefits, family allowance, industrial accident benefits, and unemployment benefits. Japan ratified the ILO Convention No. 121 (Convention concerning Benefits in the Case of Employment Injury) in June 1974 and the ILO Convention No. 102 (Convention concerning Minimum Standards of Social Security) in February 1976, accepting the obligation of providing injury or sickness benefits, unemployment benefits, old-age benefits and employment injury benefits. For the implementation of these Conventions, refer to the reports on ILO Conventions No.121 and No.102, submitted to the ILO in 1993 and 1996 respectively.

1. Medical Care, Injury or Sickness Benefits, and Maternity Benefits

Medical care, injury or sickness benefits, and maternity benefits are ensured by the medical insurance system. A public assistance scheme (living assistance) is also provided through the general financial resources of the national and local governments.

(1)Contents of the medical care insurance system
The present medical care insurance system consists of six different schemes, namely, Health Insurance, Seamen's Insurance, and three Mutual Aid Schemes for national public employees, local public employees, and teachers and employees of private schools, and, National Health Insurance. The first five schemes above are employee insurance schemes for employed persons and their dependents, while the last one is a community insurance scheme for people not covered by the employee insurance schemes. This complex system is reflected in the fact that Japan's medical care insurance system was formed and has developed on both a community and a sector of employment basis. The community insurance scheme targets those who are not insured by an employee insurance scheme. This scheme is run by either the local authority (city, town, or village) or national health insurance associations, which are formed by a group of persons engaged in the same occupation, such as doctors or carpenters. The outline of services secured by the Health Insurance and National Health Insurance schemes, which together cover the majority of the population, are as follows: (The outlines are basically the same as those in the first report; however, the rate paid by the beneficiary and the period of coverage was changed after a revision of the law.)
(a)Medical care
Medical care under both schemes includes medical treatment, surgery, hospitalization, nursing care, dental care, medication, etc. Under the Health Insurance Scheme, a patient pays 20% of medical costs (30% for dependents and 20% for their hospitalization). While under the National Health Insurance Scheme, patients pay 30% of all medical costs. However, the National Insurance Scheme has a system of High-Cost Medical Care Benefit, which provides the balance when the medical expenses of a patient exceeds 63,600 yen in any one month period.
(b)Sickness benefits
When a person is unable to work because of injury or sickness, the Health Insurance Scheme provides 60% of the standard monthly remuneration (determined on the basis of the insured person's basic monthly salary/wage) as a sickness or injury benefit from the fourth day, for up to 18 months. In the case of the National Health Insurance Scheme, these benefits are voluntary under the law; in practice, however, most National Health Insurance Associations provide such sickness benefits.
(c)Maternity benefits
The Health Insurance Scheme provides 60% of the standard monthly remuneration as a maternity benefit for the 42 days before and the 56 days after childbirth. In addition,there is a lump-sum birth and nursing grant (spouse lump sum birth and nursing grant for the spouse) of 300,000 yen. While under the National Health Insurance Scheme, the details of the grants are determined by ordinances of each city, town and village; however,almost all pay 300,000 yen as the lump-sum birth and nursing grant.
(2)Financial structure of the medical care insurance system
(a)Health Insurance
The amount of an individual insurance premium is calculated by multiplying the standard monthly remuneration of the insured person by the premium rate, and is paid equally, in principle, by the insured and his/her employer. As of the end of March 1997,the premium rate for the government-run Health Insurance Scheme was 8.2%, while that for the association-run Health Insurance Scheme was 8.394%.
The administrative costs for these schemes are paid by the Government. Under the government-run Health Insurance Scheme, 13% of the cost of insurance benefits such as medical treatment, medical care benefits for dependents, sickness or injury benefits, maternity benefits, and high-cost medical care benefits (including those for dependents) are covered by the National Treasury.
(b)National Health Insurance
Under the National Health Insurance Scheme, the premium is paid by the householder of the insured person. The amount of the premium, in principle, is the sum of income (%), real property (%), per-head levy (fixed sum multiplied by the number of members in the household), and per-household levy (same for all households). No household must pay more than 530,000 yen in insurance fee per year. 50 percent of the benefit is covered by the National Treasury; there are also other national subsidies provided,such as the grant for the assistance of local government finances.
(c)Health and medical service for the elderly
The Health and Medical Service Law for the Elderly is enacted to provide comprehensive health services including preventive care treatment and rehabilitation of the patient, with a view to ensure suitable medical treatment and health maintenance for citizens in their old age in recognition of the increase in the aging population. This law is based on the spirit of self-reliance and solidarity of the citizens. These health services are undertaken together by the city, town and village, the closest administrative body to the community residents, and expenses are covered, in part, by the patient, and, in part, through public expense or the contribution by the medical insurance holders. The burden of payment is thus fairly shared by the entire nation.
However, due to the increase in medical expenses for the elderly with the rapid development of the population and sluggish economic conditions, the burden of cost on the younger generation is becoming excessively heavy. Therefore, Japan is currently working toward necessary revisions of the system in view of fair burden sharing among generations as well as appropriate and efficient medical fees for the elderly, while still ensuring the provision of adequate health and medical services in accordance with the special needs of the elderly.

2. Old-Age Benefits, Disability Benefits, and Survivor Benefits

Old-age benefits, disability benefits, and survivor benefits are provided under the Public Pension Scheme, which applies to all the residents in Japan (the nationality requirement was eliminated in January 1982). Corporate and individual pensions are also offered based on the type of work and the community. These are provided as a means to enrich life in old age through self-help efforts, while public pensions aim at guaranteeing the basic part of an individual's livelihood. These schemes thus supplement each other.

There are two types of public pension schemes: the National Pension Scheme, which provides a basic pension common to all beneficiaries, and the Employees' Pension Schemes, which provide pension in proportion to salary. The latter includes the Employees' Pension Insurance Scheme for general employees, and Mutual Aid Pension Schemes for national public service employees, local public service employees, and teachers and employees of private schools, and, employees of agricultural, forestry and fishery associations. The outline of the National Pension Scheme, which applies to the entire population other than company employees, and the Employees' Pension Insurance Scheme, which applies to approximately 85% of all employees, is given below. This outline is basically the same as that in the initial report. The pension scheme was reformed in 1985, 1989, and 1994, to equalize benefits and payments among schemes and to establish pension rights for women (guarantee of a basic benefit for all women under their own names).

(1)The National Pension Scheme
(a)The National Pension Scheme applies to all residents in Japan aged 20 to 59 years old. Spouses (housewives, etc.) of the those insured under Employees' Pension Schemes are also independently insured.
(b)Benefits of the National Pension include (i) basic old-age pension, which is provided for those over 65 years of age who have contributed for 25 years or more (66,625 yen monthly, since April 1998); (ii) basic disability pension, which is provided according to the degree of disability (83,283 yen monthly for class 1; 66,625 yen for class 2, since April 1998); and (iii) basic survivor's pension, which is provided to a family when an insured or an eligible person for basic old-age pension dies (66,625 yen monthly plus an additional amount, according to the number of children, since April 1998.).
(c)Financial resources are covered by insurance premiums from the insured (13,300 yen monthly in fiscal year 1998), contributions from employees' pension insurance schemes, and from the National Treasury (as a rule, the obligatory share is one-third of the benefit costs).
(2)The Employees' Pension Insurance Scheme
(a)The Employees' Pension Insurance Scheme applies to persons employed by private-sector companies.
(b)Benefits of insurance include (i) old-age benefits, which are provided for those over 60 years of age (over 59 for women) who have contributed for 25 years or more (the amount is determined by age, average monthly standard remuneration, months of contribution, existence of spouse and/or children); (ii) disability benefits, which are provided for disabilities resulting from sickness or injury originated while insured (the amount is determined by the average monthly standard remuneration, months of contribution, and degree of disability; however, the minimum guarantee is 49,967 yen per month); and (iii) survivor benefits, which are provided for a family when an insured person or a person who was eligible for a basic old-age pension dies (the amount is determined by the average monthly standard remuneration and the months of contribution).
(c)Financial resources are covered by insurance premiums paid equally by employees and employers. The premium rate is 17.35% (since October 1996).

3. Family Benefits

Based on the Child Allowance Law, the Government established the Child Allowance Scheme in January 1972 to contribute to a stable family life, as well as to promote the healthy growth of children. The number of beneficiaries was 2,001,864 as of February l997. This system was outlined in the initial report, however, the following revisions have been made (The financial resources are the same as previously).

(a)An allowance is paid to those who reside in Japan (the requirement of nationality was eliminated in January 1982) and who take care of and support children qualified for the allowance. However, the allowance is not paid to those whose annual income in the previous year is higher than the amount determined by government ordinance (an annual income 2,396,000 yen with three dependents).
The requirement for the allowance used to be "three or more children under 18 years of age, at least one of whom is below the age of completion of compulsory education (under 16)." This, however, was changed by the revision of the Child Allowance Law in 1991 to "children under three years of age."
(b)The amount of the allowance is 5,000 yen per month for the first and second child respectively, and 10,000 yen for each additional child.
(c)A Special Allowance (the same amount as the Child Allowance) is paid by employers to company employees and by the relevant office to public service employees who cannot receive the Child Allowance because of income restrictions and whose previous year's income is less than the amount determined by government ordinance (an annual income 4,178,000 yen in the case of three dependents).

4. Employment Injury Benefits

Benefits for an injury incurred while on duty (including accidents while commuting) are paid in accordance with the Workmen's Accident Compensation Insurance Law.

(1)Workmen's Accident Compensation Insurance are aimed at all workers (hired by employers and receiving salary) regardless of nationality, and applies to all companies that employ workers. As of March 1997, the number of insured companies was approximately 2.68 million, with approximately 47.90 million workers.
(2)When a worker is injured, falls ill, becomes disabled or dies as a result of a work-related accident, including accidents while commuting, insurance benefits are paid to the worker or to his survivors as follows:
(a)Medical(compensation)benefit (when the worker needs medical treatment);
(b)Temporary disability (compensation) benefit (when the worker cannot receive any earnings due to absence during the period of medical treatment, the benefit is paid from the fourth day of the absence);
(c)Long-term disability (compensation) benefit (when the worker has not fully recovered from injury or illness after one and a half years from the beginning of medical treatment, and whose disability falls into the category of injury or illness);
(d)Permanent disability (compensation) benefit (when the worker has permanent disabilities after recovery from a work-related injury or illness);
(e)Survivor (compensation) benefit and funeral expense (funeral compensation benefits) (when the worker dies); and,
(f)Health care (compensation) benefit (when the worker who receives disability and injury (compensation) benefit needs continuous or on-call care and, at present, is receiving such care).
In addition, special benefits are provided as a labour welfare service. The amount of the above benefits meets the standards prescribed by ILO Recommendation No.121.
(3)The Workmen's Accident Compensation Insurance Scheme is run by the Government. In principle, the expenses required by the insurance are covered by premiums paid by employers. The premium is calculated by multiplying the total salary paid by the employer by the premium rate. The Premium rate is determined by taking account of the type of business, the number of past accidents, and other factors. Currently, the lowest rate is 0.6% and the highest, 13.4%.

5. Unemployment Benefits

Unemployment and other benefits are paid to workers who are unemployed or have trouble in continuing to be employed, in accordance with the Employment Insurance Law. This aims to stabilize workers' livelihood and employment as well as to promote employment.

(1)The Employment Insurance Scheme applies to all companies where one or more workers are employed. All persons employed in such companies are insured and protected by this scheme, except for persons insured under the Seamen's Insurance Scheme and persons employed after reaching 65 years of age. As of the end of March 1996, the number of companies insured by this scheme was approximately 1.96 million, with the number of those insured approximately 33.77 million.
(2)There are three kinds of unemployment benefits. Namely, the Job Applicant Benefit, which aims to stabilize the livelihood of the unemployed, the Employment Promotion Benefit, which aims to promote re-entry into the workforce, and the Continuous Employment Benefit, which aims to contribute to stabilization of employment by providing necessary benefits for a workers unable to continue to be employed. The amount and duration of the basic allowance under the Job Applicant Benefit are determined by the daily amount of wage of one's latest job, his/her age, and the insured period. The minimum daily amount of the basic allowance in 1997 was 2,580 yen while the maximum daily amount for the same period was 10,790 yen; the minimum duration was 90 days and the maximum, 300 days.
(3)The financial resources for unemployment benefits are covered by insurance premiums paid by employees and employers (they equally bear the amount equivalent to 0.8% of workers' wages) and by the National Treasury.

6. Change in the Costs Related to Social Security

In recent years, along with the development of an aging population, the share of the national budget allotted to social security and the burden on the national economy have been increasing. (Refer to Table 11)

Table 11. Share of Social Security Costs in the National Budget
  GNP (nominal) General expenditures Social security costs Rate
FY1980 2,453,600 307,332 82,124 26.7%
FY1985 3,255,011 325,854 95,736 29.4%
FY1990 4,415,891 353,731 116,148 32.8%
FY1995 4,927,803 421,417 139,244 33.0%

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