Can you explain the Japanese social insurance system?

The social insurance system is an interdependent system, the insurance contribution of which is borne by employees, employers and the nation.

The major social insurances are the employee's health insurance and the employee's pension insurance which are for employees working for companies. The national health insurance and the national pension insurance are for those not covered by either the employee's health insurance or the employee's pension insurance, such as free-lance workers and those who engage in agriculture. In addition, the workmen's accident compensation insurance covering accidents arising out of working duties and the employment insurance covering a loss of employment are also available.

(1)Employee's health insurance

The employee's health insurance is a system to provide workers and their family members with necessary medical benefits or other allowances in the case they become ill, get injured or lose their lives due to reasons other than their job duties, or give birth to a child. When workers are listed on the employee's health insurance, a health insurance card is issued.

In the case of sickness or injury, the medical expenses charged to the insured are 10% of the total amount (30% for their family members) if the health insurance card is presented to the hospital. If the total amount of medical expenses paid by an insured person to medical institutions for one disease or injury exceeds 60,000 yen per month, the amount in excess of 60,000 yen will be paid to the insured as a major medical expense.

Employers are responsible for application to the employee's health insurance. All corporate offices are under an obligation to participate in this insurance system. Therefore, workers employed by corporate offices must be covered by this employee's health insurance system, except for temporary and daily-hire employees. In the case of private enterprises with less than 5 employees, they may participate in this system if the entrepreneur applies for participation based on the consent from the overwhelming majority of his/her employees and receives approval from the competent authorities.

The insurance premium is determined depending on the income of each insured person, which is shared equally by the employer and the insured.

Insurance payment business is dealt with by social insurance offices except for a part of that dealt with by health insurance societies. For further details, make inquiries to the social insurance office which has jurisdiction over the district where the enterprise which employs you is located (Click here).

In the case of workers who are not covered by this employee's health insurance, such as free-lance workers and those who are engaged in agriculture, they are expected to participate in the national health insurance system managed by municipalities. For further details, make inquiries to the section concerned at each municipality

(2)Employee's pension insurance

The employee's pension insurance is a pension system for workers. The main purpose of this system is to guarantee workers' livelihood in their later years; however, it also plays a role in guaranteeing the livelihood of workers who become unable to work due to injuries or sickness or for bereaved families of workers who are deceased.

Participation in this employee's pension insurance is compulsory for all offices of juridical persons. Therefore, all workers employed by such offices must be coverd by this insurance, except for temporary or daily-hire employees.

In the case of private enterprises with less than 5 employees, they may participate in this insurance if the entrepreneur applies for participation based on the consent from the overwhelming majority of his/her employees and obtains approval from competent authorities.

The insurance premium is determined depending on the income earned by each insured person, and the burden is shared equally by the employer and the insured.

Insurance payment business is dealt with by social insurance offices, except for a part of that dealt with by the health insurance societies. For further details, make inquiries to the social insurance office which has jurisdiction over the district where the enterprise which employs you is located

Workers who are unable to partipate in this employee's pension insurance are expected to participate in the national pension insurance which has the same purpose. For further details, make inquiries to the section concerned at each municipality

Foreign nationals who have joined the Employee's pension insurance in Japan will be able to claim a partial reimbursement after they have left Japan.

Foreign nationals who fall under four following categories are qualified if a claim is made within two years of the date after they have left Japan.
* Foreign nationals who don't have Japanese citizenship.
* Foreign nationals who are members of either the National Pension Plan or Employee's Pension Insurance for more than 6 months.
* Foreign nationals who are no longer living in Japan.
* Foreign nationals who have never had the right to receive a pension in Japan.

[How to apply for a partial reimbursement]

Before Leaving Japan:
* Obtain the Request of Arbitration for Lump-Sum Withdrawal Benefit (脱退一時金裁定請求書 dattai ichijikin saitei seikyosho) claim form from the Social Insurance Office or the National Pension Section of the municipal office nearest you. You can also download a copy of this form in English from the Social Insurance Office Wesbite
* Designate someone to be your tax representative by completing the Declaration Naming Tax Representative for Foreigners (納税管理人の届出書、外国人用 nozeikanrinin no todokedesho, gaikokujinyo) form and submitting it to your local tax office. The form to appoint a tax administrator can be downloaded here
* Your tax representative does not have to be your supervisor but if your supervisor is reliable then it would be best to have them do this.

After Leaving Japan:
* File for the Lump-Sum Withdrawal Payment using the Request for Lump-sum Withdrawal Benefit claim form mentioned above.
* Fill in the necessary information (you will need to refer to your blue pension book) and mail it to the following address:
Social Insurance Agency
3-5-24 Takaido Nishi
Suginami-ku, Tōkyō
Japan 168-0071
* You must attach the following to your application:
* Your pension book
* A photocopy of your passport showing your name, DOB, nationality, signature and date of departure from Japan
* A document verifying the name of your bank (in your home country), the name of the branch office, and your bank account number in your name

[Reimbursement]
Reimbursement depends on how many months you have paid national pension health insurance.

Length of Payment	Reimbursement
more than 6 mo. to 12 mo.	39,900 yen
more than 12 mo. to 18 mo.	79,800 yen
more than 18 mo. to 24 mo.	119,700 yen
more than 24 mo. to 30 mo.	159,600 yen
more than 30 mo. to 36 mo.	199,500 yen
more than 36 mo.	239,400 yen

For a person who is eligible to receive a pension, the reimbursement is calculated as follows:
Basic monthly income x a rate (ranging from 0.5 to 3.0 depending on the period of time that subscriber was insured).

Subscriber's length of time insured	Rate
more than 6 mo. to 12 mo.	0.5
more than 12 mo. to 18 mo.	1.0
more than 18 mo. to 24 mo.	1.5
more than 24 mo. to 30 mo.	2.0
more than 30 mo. to 36 mo.	2.5
more than 36 mo.	3.0

[Getting the tax back]

The amount remitted to your account will be calculated at the currency exchange rate accruing on the day of the transaction. It will be taxed at 20%, so you will initially only receive 80% of the full amount. The next two steps outline how to claim back the remaining 20%.

After you have received the Lump-Sum payment, send the original Notice of the Lump-Sum Withdrawal Payment Entitlement (脱退一時金支給決定通知書 dattai ichijikin shikyu kettei tsuchisho) form to your tax representative in Japan.

Have your tax representative go to the same tax office as before and file the final return (確定申告書 kakutei shinkokusho) on your behalf. The refund will be deposited into your tax representative's Japanese bank account designated at the time of filing. Your tax representative will then need to transfer the money to your overseas bank account.

You must file your application for a tax refund within 5 years of leaving Japan. You can get more information about the pension system from The Public Relations Department of the Social Insurance Operations Center at 03-3334-2111 (Japanese only).