Don’t Publish IR Part-timers to see automatic deductions for pensions04/18/2008, The Asahi Shimbun

Apr 22, 2008

The ministry will also allow the Social Insurance Agency (SIA) to do all the paperwork to exempt low-income people from premium payments, the sources said. Those exemptions will also lower the percentage of nonpayers. The Ministry of Health, Labor and Welfare sees a drastic reduction in nonpayers as necessary to obtain the public’s acceptance of pension reforms starting next fiscal year. Under the revised pension reform law that passed the Diet in 2004, taxpayers’ money will cover half of the funds for the basic portion of public pension programs instead of the current one-third. The increase will require an additional 2.3 trillion yen in central government spending. The ministry’s plans, intended to start as early as next fiscal year, will be discussed at the Social Security Council’s pension subcommittee. The national pension program mainly covers the self-employed, part-time workers and unemployed people. As of the end of fiscal 2004, 19 million people subscribed to the program, but 4.8 million, or about 25 percent, had not paid their premiums for at least two years. Currently, subscribers are required to pay premiums on their own. Under the proposed system, employers will deduct premiums from the pay of part-timers who work less than 30 hours a week. These part-time workers are not covered by a public pension program for company employees. The ministry estimates that more than 40 percent of the current nonpayers will have premiums automatically deducted under the proposed system. The extra paperwork will fall on the shoulders of the companies. But corporate representatives last year said they will consider such deductions for the national pension program as well during talks on including more part-time workers in the pension program for company employees. For exemptions to low-income earners, subscribers currently must take the procedures themselves. The SIA will identify those qualified after obtaining income information from municipal governments and take exemption procedures on their behalf. Under the national pension program, the monthly premium is 14,410 yen per person. A person living alone with an annual income of 3 million yen or less would likely be exempted from paying all or part of the premiums.