Foreigners on welfare face pension burden

The Japan Pension Service wants to drop the pension premium waiver for foreigners who are on welfare, effectively ending a long-held practice of treating them the same as Japanese, sources said Tuesday.

The government-linked body that runs the public pension systems has drawn up a guideline to end the uniform premium waiver for foreigners on welfare, drawing immediate fire from human rights activists who liken the end of the exemption to discrimination based on nationality.

In fiscal 2010, roughly 1.41 million households were on public assistance, including around 42,000 headed by foreign residents.

In a reply dated Aug. 10 to an inquiry from a local-level pension service office, the Japan Pension Service said that “public assistance benefits are provided to foreigners living in poverty just like those provided to Japanese nationals, but foreigners are not actually covered by the law on public assistance.

“Under the national pension law, the (premium) waiver is accorded only to those subject to the law on public assistance,” the service said. “It is thus not applicable to foreigners.”

The Kokumin Nenkin basic pension system is designed mainly for people not employed by corporations, including self-employed workers, students and part-time workers.

The national pension law stipulates that the premium waiver applies to people who are on welfare benefits paid under the public assistance law or via a welfare ministry ordinance.

Presumably because the public assistance law stipulates that only Japanese nationals are eligible for welfare, the Japan Pension Service drew up the new guideline that drops the foreigner exemption.

But in practice, certain qualified foreign residents, including those with permanent residency and with Japanese spouses, are receiving public assistance benefits thanks to a humanitarian decision by the welfare ministry in 1954 that municipal governments must accept applications from foreign nationals in dire need of support.

In 1982, when the nationality clause in the national pension law was abolished, foreign residents became legally eligible to join the public pension system.

The requirements for foreigners to receive public assistance and the amount of benefits they can receive are the same as what applies for Japanese, because the system is geared to ensure the minimum standard of living.

The Japan Pension Service believes that while all Japanese on welfare should qualify for the full waiver of premiums for the state-run pension plan, foreign residents who have jobs but are on welfare due to low income should not. They may have to pay some of the legally required premiums based on their income level.

For example, a foreigner living alone who earned ¥570,000 or more the previous year may now be required to pay some of the around ¥180,000 in annual premiums, if the current waiver is revoked.

“JPS and the welfare ministry must have been aware that foreign residents on welfare nationwide have been waived from the national pension premiums,” said Shinichiro Nakashima, head of Kumustaka, a group based in the city of Kumamoto that supports foreign residents.

“Foreign residents who won’t be able to pay the premium could end up with no pension benefits in the future. (The government) should abolish the nationality clause in the public assistance law, and treat foreign residents the same as Japanese.”

An official at the Health, Labor and Welfare Ministry, which oversees the pension service, said that “it’s not that we’ve changed the policy. We are just restoring what should have been the case. While it depends on income levels, I would think many will still see payments entirely waived in reality” even under the new guideline.