Surely this is considered one of the issues that many international students and trainees are most concerned about when they first set foot in Japan. It is not surprising that many people fall into “half laughing and half crying” situations when they do not understand each type of Japanese insurance thoroughly as well as always wonder if they have to pay insurance. Should I register for insurance and if not, what will happen? So today I will introduce all types of social insurance you need to know in Japan so that everyone can grasp the obligations, responsibilities and rights related to the issue of “social insurance” while living and working here.

 

Overview:
What is social insurance?

Social insurance is a guarantee to replace or partially compensate an employee’s income when his/her income is reduced or lost due to illness, maternity, work accident, occupational disease, or end of working age or death, on the basis of contributions to the social insurance systems.

How many types of social insurance in Japan?

Currently in Japan there are 4 main types of insurance, which are:

 

• Health Insurance – 健康保険 (Kenkōhoken): The insured will be supported to pay for hospital fees in case of illness or disease.
• Pension Insurance – 厚生年金保険 (Kōsei nenkin hoken): The insured will receive periodic retirement benefits (pension) after retirement.
• Unemployment Insurance – 雇用保険 (Koyō hoken): The insured will receive a certain amount of support when they lose their job (unemployed).
• Industrial accident insurance – 労災保険 (Rōsai hoken): The insured will receive a certain amount of support in case of an accident while working.

 

Details of types of insurance in Japan:

 

• Health Insurance – 健康保険 (Kenkōhoken):

 

• Health insurance types and participants:

 

Currently, in Japan, there are 3 types of health insurance as follows:

 

• Social insurance by company – 被用者健康保険 (Shakai hoken): For employees in the same company or public employees.
• National Health Insurance – 国民健康保険 (Kokumin kenkōhoken): For those who do not have Social
• Insurance by company: individuals who open their own businesses, home services, students, etc.
• Medical Care System for Older Senior Citizens – 後期高齢者医療制度 (Kōkikōreishairyōseido): For the elderly over 75 years old and the disabled over 65 years old.

 

Insurance premium:

The premium will be calculated based on each individual’s annual income. The form of payment of insurance premiums for each type is as follows:

 

Social insurance by company – 被用者健康保険 (Shakai hoken): The insured and the company will jointly pay 50-50 (half of each).
National Health Insurance – 国民健康保険 (Kokumin kenkōhoken): The insured must pay 100% of the premium (can be paid monthly or once a year).
Medical Care System for Older Senior Citizen – 後期高齢者医療制度 (Kōkikōreishairyōseido): The insured must pay 100% of the premium.

 

Benefits:

As mentioned above, health insurance will support participants to pay for hospital fees when they unfortunately have disease or illness. Specifically, you only have to pay 30% of the hospital fee, the remaining 70% will be paid by the government even in case you get injured and return to your home country if the necessary conditions are satisfied.

Other beneficiaries:

Not only the insured, family members can also receive benefits from health insurance as “dependants” – 被扶養者 (hifuyō-sha). However, not all family members are considered “dependents”. Therefore, to earn benefits from health insurance, you must meet the following general conditions:

• Must belong to the scope of “dependants” under the Health Insurance Law.
• Must have an address in Japan.
• Not more than 75 years old for the elderly and 65 years old for people with disabilities.
• Must live dependent on the income of the insured.
• Must prove that the insured is the one who has to pay for most of the household’s expenses.
• Proof of the individual’s financial ability.
• Income must be less than half of the insured’s income.
• The income of the whole family must be less than 1.3 million yen per year (less than 1.8 million yen per year for families with elderly over 75 years old or disabled under 65 years old who are receiving disability benefits).

 

In addition, there are some specific conditions for each beneficiary that will be explained in other articles. At this point, you can see that it is not easy to be recognized as a “dependant”, however, once accepted as a “dependant”, you will earn a lot of benefits such as: health care, maternity support, disease treatment, etc.

Notes:

Health Insurance – (Kenkōhoken) and Pension Insurance – (Kōsei nenkin hoken) always go together so there will never be a case where you just have to pay the monthly health insurance without paying pension insurance. However, students will not have to pay the Pension Insurance.

 

In addition, foreigners who study or work in Japan are required to have a status of residence. Status of residence is valid for 1 year, 3 years or 5 years. Before the expiration date, foreigners must apply for an extension. However, from April 1, 2010 onward, when applying for residence extension in Japan, you will need to present your insurance card to the authorities. Therefore, participating in Health Insurance is not only related to health protection, but also related to the law.

 

• Pension Insurance – 厚生年金保険 (Kōsei nenkin hoken):

 

• Pension insurance types and participants:

 

There are 3 types of Pension Insurance in Japan:

 

• National Pension – 国民年金 (Kokumin nenkin): All individuals between the ages of 20 and 60, regardless of nationality, residing in Japan are obliged to participate.
• Welfare Pension – 厚生年金 (Kōsei nenkin): All people who are working at companies that apply welfare pension (social insurance) are obliged to join an additional pension fund. this benefit.
• Mutual Aid Pension – 共済年金 (Kyōsai nenkin): Pension fund for public employees – 公務員 (Kōmuin), private school teachers, etc.

 

All registered residents of Japan aged 20 to 59 years (Excluding foreign nationals, with a visa for medical stay or for long stay for sightseeing) must be covered by the National Pension system. The insured persons under the National Pension system are categorized according to their status as follows:

 

Category Ⅰ insured persons: All registered residents of Japan aged 20 to 59 years who are not Category II or III insured persons (Including agriculture, forestry, or fishery business operators, self-employed persons, students).
Category ⅠⅠ insured persons: Persons enrolled in the Employees’ Pension Insurance system or Mutual Aid Associations (Except for persons aged 65 to 69 years who are eligible to receive a pension due to old age or retirement).
Category ⅠⅠⅠ insured persons: Category II insured person’s dependent spouses aged 20 to 59 years, who reside in Japan.

*Note: Persons must be covered as Category I insured persons, for the periods from their entry to Japan until when they are registered as Category II or Category III insured persons.

 

You do not have to pay the Pension Insurance if:

• As a “Dependent”.
• Being unemployed.
• As a student. 

In the category of “Permission to Engage in Activity Other Than That Permitted under the Status of Residence Previously Granted” – 資格外活動許可 (Shikakugaikatsudōkyoka): The total working time or total number of working days are less than ¾ of the total working time or total number of working days of a normal employee (28 hours per week).

 

In addition, if you meet all of the following conditions, you will be required to pay Health Insurance:

• Weekly working time: over 20 hours.
• Those who wish to work for more than 1 year.
• Monthly income: over 88,000 yen.
• Not studying.
• Working for a company with more than 501 employees.

 

Insurance premium:

Each target group will have different fees, specifically:

Category Ⅰ insured persons: The monthly insurance premium paid by Category Ⅰ insured persons is the basic fee – 国民年金保険料 (Kokumin nenkin hoken-ryō): regardless of the age, gender or income of the participant. However, this amount often changes from year to year based on the government policy, the fee you have to pay in 2021 is 16,610 yen per month. Those in Category Ⅰ will have to pay a fee to the Japan Pension Service – 日本年金機構 (Nihon’nenkinkikō) based on the insurance premium notices sent to you monthly by this institution through convenience stores, banks, etc.

 

Category ⅠⅠ insured persons: People belong to this category have to participate in both the Employees’ Pension Insurance system and Mutual Aid Association. However, in fact, just completing the procedure to join the Employees Pension Insurance system at your company, you will automatically be transferred to the list of participants of the Mutual Aid Associations. The monthly premium will include the base fee and the extra fee, collectively known as the Welfare Pension Insurance premium – 厚生年金保険料 (Kōsei nenkin hoken-ryō). This amount is not fixed but proportional to the income of the payer, about 17.828% of the monthly salary, however, the company will pay 50% of it for you. The premium will be deducted directly from your monthly salary.

 

Category ⅠⅠⅠ insured persons: Individuals in this category will be fully supported by the pension fund that their spouses participate in at their companies, so even though they do not have to pay a monthly fee, they still receive the benefits of the basic pension fund in their old ages. However, the spouses of the people in category ⅠⅠⅠ need to complete the registration of “Dependents” at their companies.

 

Requirements & Benefits:

Requirements:

The basic requirements to receive the pension benefits when participating in the “National Pension” and the “Employee’s Pension” are as follows:

The total period of participation in the National pension must be more than 10 years.
The duration of participation in the Employee’s  pension must be more than 1 year.

Benefits:

If you pay the “National Pension” continuously for 40 years (480 months), the pension you can receive after reaching the age of 65 according to current regulations is about 780,000 yen/year (approximately 60,000 yen/month on average).

If your payment period is less than 40 years, the above amount will change based on the following formula:

Pension received = Number of months paid × 780,000 / 480 months

(For example, if you only pay for 20 years = 240 months, your pension will be just over 390,000 yen/year, or about 32,500 yen/month on average).

As for the “Employee’s Pension”, the calculation of the pension received is quite complicated because it depends heavily on the number of years of premium payment and your average income during the period of participation in the pension. Therefore, in this article, we will not mention the “Employee’s Pension”. You can access the link below to calculate your own pension most accurately:

 

http://urajijou.world.coocan.jp/chokin/rknenkinkk.htm

 

Lump-sum Withdrawal Payments (for foreigners):

 

In order to receive this payment you need to meet the following conditions:

 

Not a Japanese national.
Have already paid the Employee’s Pension Insurance – 厚生年金保険 (Kōsei nenkin hoken) for more than 6 months.
No longer have an address in Japan.
Unable to receive pension (including accident pension).
Apply within 2 years from the date of no longer having an address in Japan.

 

Unemployment Insurance – 雇用保険 (Koyō hoken):

Participants:

Whether you are a foreigner or a part-timer, if you satisfy the following basic conditions, you must pay the Unemployment Insurance premium:

 

The employee has a labor contract of more than 31 days.
The prescribed number of working hours is more than 20 hours/week

 

In principle, International Students who only have “Status of Residence” cannot work, however, if they apply for “Activity other than those permitted by the status of residence previously granted”, they can work part-time and have limited working hours (28 hours/week). Although working more than 20 hours/week, you do not have to pay the Unemployment Insurance premium. The time when International Students with “Activity other than those permitted by the status of residence previously granted” must pay the Unemployment Insurance is when they have a temporary graduation certificate and are working for companies.

 

In addition, for those who study online, study in the evening at universitíes or work-study training systems, if they satisfy the above basic conditions, they still have to pay the Unemployment Insurance premium.

 

Insurance Premium:

 

The usual way to calculate the Unemployment Insurance premium will be according to the formula below:

 

Premium need to paid = Actual salary × 9/1000

 

However, the 9/1000 – 雇用保険料率 (Koyōhokenryōritsu) ratio does not apply to all companies in Japan. This ratio varies depending on the industry of the company.

 

Requirements & Benefits:

 

Requirements:

 

Basic conditions to receive “Unemployment Allowance” from the “Unemployment Insurance” are as follows:

 

Participating in the Unemployment Insurance for more than 1 year by the time of leaving, of which at least 6 months have 14 or more working days.
In case of company bankruptcy, pregnancy, illness or being forced to leave, the minimum period of the Unemployment Insurance premium payment is 6 months.
For short-term workers (20~30 hours/week), by the time of leaving, they must have participated in the Unemployment Insurance for 2 years, of which at least 12 months of working 11 days or more.

 

Benefits:

 

The allowance for each person is different, depending on the salary before leaving, specifically:

 

1 day allowance = (Total 6 months salary before leaving) / 180

 

(Note: the total salary does not include bonuses)

 

However, the amount of money received in 1 day must not exceed the following rules:

 

• Under 29 years old: 6,395 yen/day.
• From 30 to 44 years old: 7,100 yen/day.
• From 45 to 59 years old: 7,810 yen/day.
• From 60 to 64 years old: 6,808 yen/day.

 

Required documents and procedures:

 

To be eligible to apply for unemployment benefits, you need to prepare the following documents:

 

• Statement of Unemployment – 離職票 (Rishoku-hyō). This statement is issued by Hello Work after you submit the resignation letter.
• Employment insurance card – 雇用保険被保険者証 (Koyou hoken hi hoken shashou). You will receive this certificate when you leave the company.
• Other proofs include: Japanese driver’s license (if any), My number card, photocopy of residence card and passport.
• The bank book must have the name of the person applying for unemployment benefits.
• Name seal (hanko).
  2.3cm x 2.5cm sized ID photos taken within the past 3 months.

 

After having all the necessary documents done, submit them at the Japanese government’s Employment Service Center – Hello Work near where you live. Along with that, you must register for a job search and participate in an orientation event of Unemployment Insurance at the center.

 

Benefit-receivable period:

The period in which you can receive benefits from Hello Work is as follows:

After 7 days of registration at Hello Work office, you will start receiving benefits. In fact, within 1 month the benefit amount will be transferred to the unemployed.
In case of intentionally quitting or being fired, after 3 months and 7 days after completing the registration procedure, the unemployed will receive benefits from the 4th month onwards.
On the first day of registration at Hello Work, the schedule for receiving benefits will be determined. Every 4 weeks, the unemployed are required to go to Hello Work office to certify that they are still unemployed and to receive benefits.

 

Notes:

 

Only apply for unemployment benefits when you have quit your job, have paid unemployment insurance in the past year and have not found a new job yet.
If you still can’t find a job, you should apply for unemployment benefits as soon as possible.
In the period of receiving unemployment benefits, if you find a new job (even a part-time job), you must immediately notify Hello Work.
In case of being found to have already got a job but still receiving unemployment benefits, you are forced to compensate Hello Work an amount that is 3 times bigger than the amount you have illegally received. Along with that, the detection of fraud will affect the result of applying for a Visa extension in the future.

 

Workers’ accident compensation insurance – 労災保険 (Rōsai hoken):

 

Participants:

 

Workers’ accident compensation Insurance applies to foreign workers, regardless of nationality, if they are working in Japan. Not only workers with valid work permission, but also international students who have accidents while working part-time are also applied.

 

Insurance Premium:

 

Workers’ accident compensation Insurance premium will be paid by employers, factories, companies, etc. Whether there is only one worker or illegal workers, employers, factories, companies, etc. are required to pay for this type of insurance. If an accident occurs without paying the Workers’ accident compensation Insurance premium, the employer will not only be prosecuted for the entire amount to be paid to the employee, but also have to pay an additional 100% or 40% of that insurance.

 

Benefits and Procedure:

 

Benefits:

 

Workers’ accident compensation Insurance will provide necessary benefits such as treatment fees for workers in case of injury, illness or death at work.

 

There are 7 types of benefits in the Workers’ accident compensation Insurance, specifically as follows:

 

Treatment (compensation) allowance: Allowance (compensation) received when an employee is injured or gets sick on the job or on the way to work and requires specific treatment.

 

Leave (compensation) allowance: If you do not receive wages when taking time off work to treat injuries and illnesses that occur on the job or on the way to work, you will receive leave (compensation) allowance.

 

Annual sickness and injury (compensation) allowance: Allowance (compensation) received in the case that after starting treatment for an illness or injury that occurs on the job or on the way to work, it has been 1 year and 6 months but still has not recovered (stable condition).

 

Disability (compensation) allowance: In the event that an illness or injury occurred on the job or on the way to work has recovered (stable condition) but the employee will be subsidized if it is at the disability level.

 

Family (compensation) allowance: Allowance received when the employee unfortunately dies on the job or on the way to work.

 

Funeral allowance (Funeral payment): Allowance received in case of death and burial.

 

Nursing (compensation) allowance: Allowance received in case of receiving nursing care because of a certain disability that is subject to the annual disability (compensation) allowance, or is subject to the annual injury (compensation) allowance.

 

Procedure:

 

The 7 allowances (compensations) above will correspond to 7 different procedures, so please the official website to learn more via the link below:

 

https://www.mhlw.go.jp/new-info/kobetu/roudou/gyousei/rousai/gaikoku-pamphlet.html

 

Notes:

 

Check carefully about whether the company you are going to work for has paid Workers’ accident compensation Insurance or not.
When receiving the allowance (compensation), the payment amount is yen converted at a certain foreign exchange rate (ask price) at the date of payment.
In the case of having to treat an injury or disability caused by a work-related accident abroad: If the treatment is proven to be satisfactory, the employee can get paid for the treatment fees.