Social insurance in Japan consists of health, pension, unemployment, and workplace accident insurance. Typically, when workers have questions about social insurance, it comes down to health insurance and pension.
First off, every person working in Japan must be enrolled in the national health insurance and pension plans. Regardless of where your passport is from or what kind of work you are doing, if you are employed in Japan in one capacity or another and have been here for 3 months, you have to be enrolled in both. Extra private health insurance plans are also available in addition to national health insurance, but they do not exclude you from the requirement to be enrolled in national health insurance.
Terminology
There are a number of terms thrown around and trying to use the English terms can increase the likelihood of a misunderstanding. While there are a few translations, “national health insurance and pension” includes the entire shakai hoken and kokumin hoken systems. To some degree, it also includes the shigaku kyosai system, too. The terms “national health insurance and pension” are used as a counterpart to private insurance plans. “Social insurance” includes everything in shakai hoken and kokumin hoken, including unemployment and workplace accident insurance.
- shakai hoken (employer-based social insurance) includes kenkō hoken, kōsei nenkin, and rōdō hoken.
- kokumin hoken (non-employer based social insurance) includes kokumin kenkō hoken and kokumin nenkin.
A glossary of terms can be found at the end of this article.
Health Insurance
Ignoring private health insurance, which can offer additional benefits but does not satisfy the legal requirements for insurance in Japan, there are two basic types of health insurance: kokumin kenkō hoken and kenkō hoken. These types are exclusive, meaning you can only be enrolled in one.
Kokumin kenkō hoken is usually for freelance workers or part-time workers who do not work enough hours at any one particular company to be enrolled in kenkō hoken. This is also the route to take if you have your own kojin jigyou, or sole proprietorship. Enrolling in kokumin kenkō hoken requires a visit to your city or ward office, as it is handled entirely independently (it does not involve any of the companies that you work for). Kokumin kenkō hoken offers some of the same benefits as kenkō hoken and, typically, the cost on the individual can be less.
Kenkō hoken is the full social health insurance that all full-time workers must be enrolled in. Japan defines full-time workers as either seishain or anyone who is required to work at least 30 hours a week. If you fall into either of those categories, you need to be enrolled in kenkō hoken. Unlike kokumin kenkō hoken, enrollment in kenkō hoken has to be done through your employer. The monthly payments are more expensive, even with the legal requirement that your employer pays half, but kenkō hoken offers even more protection than kokumin kenkō hoken. Plus, it is legally required for both you and your employer; seize-assets level legally required.
Pension
Just like health insurance, pension falls into two categories: kokumin nenkin and kōsei nenkin. Kokumin nenkin is similar to kokumin kenkō hoken in that it is for freelance workers or workers that do not qualify as full-time employees at any one particular company.
Kōsei nenkin is the pension version of kenkō hoken. Your employer matches your payments into the pension plan, meaning you will have saved more than with kokumin nenkin when the time comes to withdraw money for your retirement. Just like with health insurance, you are legally required to be enrolled in one of these plans.
Labor Insurance
Labor insurance (rōdō hoken) covers both unemployment and workplace accident insurances (koyō hoken and rōsai hoken, respectively). The rate paid by employees usually works out to about .03% of their total salary, with another .03% paid by their employer.
Why do I need to pay national health insurance and pension?
Being enrolled in national health insurance and national pension is a legal requirement. Recently, Japan changed the category of pension to a tax, giving the government the authority to seize assets and garnish wages if somebody owes back pension. The Japanese government is focusing more and more on small companies that do not enroll their employees in national insurance plans. What this means for you is that you could suddenly be hit with up to 2 years of back-payments in pension, plus your current payments.
Gaps in pension and insurance payments raise red flags when applying for visas, too. Applications for Permanent Residency often get denied solely based on a month or two’s gap in pension payments. It is your legal responsibility to enroll yourself, or to pressure your employer to follow the laws laid out to protect you.
International workers who only plan to be in Japan for a few years can apply for a lump sum return of the majority of their pension payments, if they leave Japan in less than 10 years. This lump sum can be applied for up to 2 years after leaving Japan.
Japan also has social insurance agreements with several countries, allowing you to transfer your paid pension in Japan to your home country’s national retirement plan. In the case of the US, there is a Totalization Agreement with Japan, allowing pension “points” to be moved between countries. In some cases, paying pension in Japan may actually be cheaper than paying pension in your home country.
Costs
Kōsei nenkin is figured at 18.3% of your total monthly income (including bonuses), with half of that paid by your company.
Kenkō hoken rates vary by the city or ward you are registered in, but average at about 10% of your total monthly income. Half of this percentage will be paid by your company. After the age of 40, an additional percentage is added (average of 1.5%) to cover nursing care insurance.
Kokumin nenkin and Kokumin kenkō hoken are based on your previous year’s income, but most people can expect them to cost around ¥15,000 each per month each (¥30,000 a month total).
| Real-life Cost Example for Tokyo Resident with No Dependents | |
| kenkō hoken – 4.64% of salary | kokumin kenkō hoken – 4.91% |
| kōsei nenkin – 9.55% of salary | kokumin nenkin – 5.01% |
| rōdō hoken – 0.3% of salary | rōdō hoken – 0.32% of salary |
Benefits
| shakai hoken | kokumin kenkō hoken / nenkin |
| Based on the income of only your main job | Based on the combined income of all your jobs (part-time, freelance, etc) |
| Covers dependents at no extra cost | Cost increases per-household member dependent |
| Short-term disability allowance of 60% salary in case of illness | No disability allowance |
| Amount available upon retirement is much higher since the employer is matching payments | Amount available upon retirement is considerably less |
I qualify, so why won’t my company enroll me?
There are some companies that want to avoid paying their share of the social insurance plan as legally required by Japan. Some excuses you may hear are that you do not qualify unless you are Japanese, that you are a contract worker and do not count, or that they will have to reduce your pay to cover the costs. The first two are completely false, and the third is a business decision the company made when they advertised the position.
Your company is legally required to enroll you in the employer-based social insurance program (see Terminology), if you qualify.
If communicating with your company’s HR doesn’t resolve the issue, there are international worker support groups that may be able to help in some cities. Labor lawyers may also be used, as well as general unions, to pressure companies to follow the law and make sure you are protected. Here is a list of a few external resources that may help.
Resources
- General Union – https://www.generalunion.org/
- National Union of General Workers – http://www.nugw.org/
- International staff that work at private schools may be enrolled in shigaku kyosai, which operates similar to shakai hoken. More information in English can be found at https://www.shigakukyosai.jp/en/index.html.
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Glossary
| English | Japanese | Pronunciation |
| Social Insurance (employer-based insurance; includes both kenkō hoken and kōsei nenkin) | 社会保険 | shakai hoken |
| Employees’ Health Insurance | 健康保険 | kenkō hoken |
| Employees’ Pension Insurance | 厚生年金 | kōsei nenkin |
| Labor Insurance | 労働保険 | rōdō hoken |
| Unemployment Insurance (also called Employment Insurance) | 雇用保険 | koyō hoken |
| Workplace Accident Insurance | 労災保険 | rōsai hoken |
| National Insurance (non-employer based insurance; include both kokumin kenkō hoken and kokumin nenkin) | 国民保険 | kokumin hoken |
| National Health Insurance | 国民健康保険 | kokumin kenkō hoken |
| National Pension | 国民年金 | kokumin nenkin |
| Annual Income | 年収 | nenshū |
| Sole Proprietorship | 個人事業 | kojin jigyō |
References
- https://en.wikipedia.org/wiki/Labour_insurance_(Japan)
- https://www.generalunion.org/index.php/legal-issues/1631-don-t-want-shakai-hoken-you-may-want-to-think-again
- https://www.ssa.gov/international/Agreement_Pamphlets/japan.html
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