|
 |
 |
|
 |
|
|
|
- Outline of Social Security System in Japan
The social security system in Japan is composed of (A) Social
Insurance (in a limited sense) and (B) Labor Insurance administered by the Ministry
of Health, Labor and Welfare. The system encompasses four major schemes as outlined
below.
(1) Health Insurance entitles employees (Insured persons) and their family
members to receive medical treatment at 30% of the actual costs. There are also
other cash benefits for events such as childbirth, death, etc. Employees aged
40 – 64 years covered by health insurance are required to contribute to Nursing
Care Insurance, which is one of governmental welfare plans.
(2) Welfare Pension Insurance provides pension benefits when employees
reached 65 years of age or become disabled. Lump-sum benefits and pension benefits
for survivors are also provided. An employer who is qualified for the scheme is
obliged to contribute to the Children's Welfare Fund.
(3) Employment Insurance provides cash benefits when employees become unemployed,
for the purposes of supporting their life and promotion for new employment.
(4) Worker's Accident Compensation Insurance entitles employees to be compensated
for sickness, injury or death while working or commuting to/from a working place.
Almost all companies registered in Japan must become "covered
offices" by law, and are required to register with district insurance offices
at the time of their establishment. All employees employed at "covered offices"
are qualified as "insured persons" under the scheme and must register with their
respective offices as well. This regulation covers foreign nationals regardless
of their nationality, visa status, or length of stay in Japan.
- Timing of registration
(1) Social insurance
As mentioned above, a company is required to register with the local social insurance
office within 5 days of its establishment. In practice, the social insurance office
may accept an application from a newly established company after due date. However,
considering any disadvantages that may be caused to employees by the late registration,
it is preferable to prepare for the completion of the registration within 1 month
of its establishment.
(2) Labor insurance
A company is required to register for labor insurance scheme within 10 days from
the following date when the company is established and its first employee is hired.
As the social insurance scheme, the local labor insurance office will accept an
application submitted after due date in practice, however the registration will
be retroactively effective from its establishment as well.
After the registration has been accepted, the estimated insurance premium for
the period from the date of registration to the following March 31 must be paid
within 50 days of the registration date.
- Determination and payment of insurance premiums
(1) Social insurance
By every July 10, the employer is required to report to the social insurance office
the amount of remuneration paid to each employee during the three-month period
from April to June. The office determines the appropriate level of social insurance
premiums, which applied from the period of September to August of the following
year, based upon the information from employers, and informs it to employers.
The monthly premium determined will be applied through the year in principle.
However, if a significant change occurs in an individual's remuneration, the monthly
premium will be adjusted prior to the following annual review in July.
The employee’s portion of the social insurance premiums is withheld from
salary and paid, along with the employer’s portion, to the social insurance
office in the following month.
(2) Labor insurance
The year for labor insurance purposes starts on April 1, and ends on March 31
of the following year. An employer is required to pay the estimated annual premium
by May 20 every year. Once the actual premium has been determined on March 31,
the balance to be paid is adjusted with the payment of the following year's premium.
The employee's portion is then withheld from salary on a monthly basis.
In addition, from April 2007, an employer is required contribution to the governmental
aid plan for asbestos-caused health damage. The contribution amount is the 0.005%
of the total salary paid from March to April, and is paid together with labor
insurance premiums by May 20 every year. The estimated contribution is not required.
- Coverage of foreign nationals
(1) Social insurance
The treatment of expatriates is the same as for Japanese employees. However, there
is a case that an expatriate, who is not paid by a Japanese branch but by an overseas
headquarters, and has no payroll relationship in Japan, will not be covered. You
should consult with the social insurance office in each case. Since health insurance
and welfare pension insurance are combined, it is not possible for an expatriate
to participate only in health insurance. Foreign nationals hired locally are treated
in the same manner as the Japanese.
Lump-sum withdrawal benefits for expatriates
Lump-sum withdrawal benefits will be provided to foreign nationals who leave Japan
and have been insured under the social insurance schemes for a certain period.
Benefits are paid to those who satisfy some criteria. The benefit amount is determined
by the length of the insured period and the average standard remuneration (monthly
standard remuneration + standard bonus).
(2) Employment insurance
In principle, the coverage is extended to foreign nationals.
(3) Worker’s accident compensation insurance
Expatriates are covered by this insurance as long as they work at an insured company
in Japan, and under the direction of the company in Japan. However, coverage is
not extended to those who work under the direction of the headquarters outside
Japan, even if their work place is within Japan.
(4) Social security totalization agreement with foreign countries
An expatriate who participates in the social security system in Germany, U.K.,
US, South Korea, Belgium can be exempted from paying a premium in Japan, to avoid
paying a double premium. The agreement with France is to be implemented in June
1, 2007.
- Treatment of a representative of a branch office
(1) Social insurance
Social insurance legislation treats an employer as an employee who works at an
insured business office. Therefore, the treatment of a representative of a branch
office is the same as that for employees.
(2) Labor insurance
In principle, labor insurance does not cover an employer. A representative for
a Japanese branch office is not treated as a board member only for that position
under the Corporate law, but he/she is regarded as an employer for labor insurance
purposes. Therefore he/she is not covered by workman’s compensation and unemployment
insurance. The local authorities will determine his/her eligibility on a case-by-case
basis depending on the individual situation.
- The future prospect of social insurance premiums
(1) Social insurance
The outlines of the prospect of social insurance premiums are as follows. For
details to be amended, please inquire at professional firms.
(1) Welfare Pension Insurance
The premiums started to increase by degrees beginning October 2004 and will be
18.3% (employer-and-employees halving) by 2017.
(2) National Pension Insurance
The premiums increased by ¥280 from ¥13,300 per month every year from
April 2005.
The welfare pension amount will be reduced for employees who is 70 years or older,
according to income in April 2007.
(3) The social security agreement with foreign countries is mentioned above; Agreement
has been signed with Canada and Australia, to be signed with Netherlands, and
under negotiation with Italy, Spain, Czech and Sweden. In addition, offer for
discussion was given by Brazil, Luxembourg and the Philippines.
|
|
|
|
