March and April brought three noteworthy changes to employee benefits in Japan. They involve employment insurance contribution increases, child care allowance increases, and record losses expected to post by the National Federation of Health Insurance Societies for Q1 2023.
Employment insurance contributions increased on April 1, 2023
The Japanese government increased the Employment Insurance Contributions (part of the Japanese Social Security system) for both Employers and Employees where the rate increased by 0.1 percentage points for all industry categories
Childcare allowances increased for parents
To reduce the financial burden of childbirth for families, the Japanese government will provide a subsidy of ¥100,000 for every newborn. This was previously provided as a temporary measure but will now be permanent.
In addition, the lump-sum childbirth allowance will be increased from ¥420,000 (US$3,110) to ¥500,000 (US$3,700). The allowance is used to cover the cost of childbirth, which is currently not covered by public health insurance.
Currently, a childcare allowance of ¥15,000 (US$110) is paid for every child per month until
they reach the age of 3. After that, a ¥10,000 (US$74) allowance is provided until the child
graduates from junior high school. Families are only eligible for such handouts if their
income is below a certain level which can vary according to the number of children they have.
National Federation of Health Insurance Societies expected to post record losses
The combined loss is projected to reach ¥562.3 billion (US$4.1b) in the fiscal 2023 year ending 31st March 2024 due mainly to rising contributions to the medical care service for the elderly.
Total insurance premium revenue is seen growing 2.8% from the previous year to ¥8.5 trillion (US$62.9b), with the Health Societies’ contributions to the elderly medical care service expected to rise 7.3% to ¥3.7 trillion (US$27.4b).