It’s fascinating what you can learn about the country you live in from what they say about it overseas. Last year, the U.S. National Public Radio ran a glowing report on the state of Japan’s health care system. “So here’s a country with the longest life expectancy, excellent health results, no waiting lists and rock-bottom costs,” it gushed. “Hospital prices too low? That’s a problem a lot of countries would like.”
The sentiment has been echoed by other media outlets across the pond. As the debate about the future of American health care drags on, commentators are looking overseas to see how the rest of the world does things. And in Japan’s case, there seems to be a lot to like.
Yet it’s a system with which many foreigners living here seem uncomfortable, to say the least. We tiptoe around it with a mixture of trepidation and bewilderment, hampered in many cases by language and cultural barriers, but also by one other minor detail: a lot of us aren’t actually part of the system.
As most readers are probably aware, public health insurance is compulsory in Japan. Yet it’s an obligation that’s little enforced, and many foreign residents — and their employers — have managed to wriggle their way out of it.
New visa guideline tied to health insurance
That could all change from next year, though. On April 1, 2010, a new visa guideline will come into effect, which states that people applying to renew or change the status of their visa should provide proof that they’re enrolled in the public health insurance scheme. The Ministry of Justice quietly announced this back in March, but the first that most people heard about it was from a July 28 article in The Japan Times with the title “New law: no dues, no visa.” Only it wasn’t quite as simple as that. It seldom is.
Japan’s public health insurance system can be traced back to 1922, when the government passed a law that provided coverage to workers at mines, factories and transportation companies. The move was motivated in part by a need to redress some of the economic inequalities that had emerged after the Meiji Restoration. Though it started with laborers, the system would expand over the next few decades to incorporate more of the working population. At the same time, a national pension plan also began to take form, and a concerted push led to universal public health and pension coverage finally being achieved in 1961.
There are now two main forms of health insurance in Japan: employees’ health insurance, or "shakai hoken," which is for salaried workers, and National Health Insurance, or "kokumin kenko hoken," which is typically used by people who are self-employed, unemployed or retired. The two health insurance schemes are run separately, and differ in a number of respects. Kokumin kenko hoken is administered on a municipal level, and people enrolled on it must pay the entire premium themselves. Shakai hoken is overseen by the central Social Insurance Agency (SIA), and the cost of payments is split equally with employers.
The SIA is also in charge of pension schemes: the National Pension (kokumin nenkin), for people on kokumin kenko hoken, and Employees’ Pension Insurance (kosei nenkin hoken), for people on shakai hoken. Pension and health insurance payments are made at the same time, and cannot be paid separately.
The extent of coverage under each health insurance scheme has varied over time. When it was first introduced, shakai hoken covered the entire cost of medical treatment, as well as fifty percent of the costs for dependents. Kokumin kenko hoken, by contrast, initially covered only half of the medical costs for both the insured and their dependents. A revision of the health insurance law in 1973 raised these amounts to 70%, while also imposing an upper limit on the cost that could be borne by the insured. For people over the age of 70, health treatment became effectively free: the portion of the price that they were expected to pay was covered by public funds.
Since then, the government has struggled to reconcile the noble intentions of the welfare state with the uglier financial realities. Double-digit growth in medical expenditures during the ’70s inspired a series of cost-cutting measures the following decade. In 1984, people on shakai hoken were required for the first time to cover ten percent of their costs. This was raised to 20% in 1997, and then to 30% in 2003 — the highest such deductible in the world. Given the problems that the healthcare system faces in the future, a further rise is not unlikely.
So what does this mean if you’re paying into it yourself? That question’s easier to answer with shakai hoken, which is based on earnings and has standardized rates throughout the country. According to the SIA website, the combined health insurance, pension and unemployment insurance payment for someone making 300,000 yen per month comes to a little under 37,000 yen.
Predicting what the bill will be like for people on kokumin kenko hoken is tougher: while the National Pension costs a flat 14,660 yen per month, health insurance premiums are determined by the relevant municipality based on a person’s taxable income from the previous year. Though the combined insurance and pension payments often work out similar to those for people on shakai hoken, the premiums vary widely between regions, and can increase sharply over the years.
Compare that to the premiums offered by expat health insurers and the difference is striking. For instance, Viva Vida!, which claims to be the only officially registered health and life insurance company for foreigners living in Japan, provides coverage to adults aged 18-55 for less than 60,000 yen per year. Other insurers give similar rates, and with little enforcement, foreigners have been able to duck out of joining public health insurance schemes altogether in favor of private coverage. Sure, it may not be legit, but if it gets the job done, why complain?
Pension system a tough sell for foreigners
The pension scheme has also proved a tough sell for foreigners. It’s necessary to make payments for at least 25 years before you can draw a pension, and while people who leave Japan before then are entitled to reclaim some of the money they have paid in, the amount is capped at three years’ worth. To date, Japan has inked social security agreements with 10 countries in an attempt to address this issue, but even in these cases, it’s seldom a simple matter of transferring the pension payments to your home country.
If individuals have warmed to the idea of avoiding the system altogether, they aren’t alone. Companies are required to pay half the cost of shakai hoken, and many with foreign workforces have sought ways of shucking this responsibility. In 2005, it was revealed that Nova Corp, then the largest employer of foreigners in Japan, had not been enrolling its teachers on shakai hoken at all, saving itself an estimated 1 billion yen a year in premium payments. In an effort to wriggle out of the situation, the company changed its teacher’s contracts so that they would work for 29.5 hours a week, or just under 75% of the hours of a full-time worker—considered the magic cut-off point at which a company has to sign an employee up to shakai hoken.
The revelation came after the Osaka-based General Union filed a complaint with the SIA about Nova, among other companies. The union has spent the past few years vigorously campaigning for businesses to enroll their employees on shakai hoken, and schools including AEON have since complied.
“We believe that regardless of the shortfalls — and there are many — public health and pension insurance are important public policy measures, and that our members should have coverage,” explains Dennis Tesolat, the GU’s General Secretary. “When we started our campaign back in 2004, one of our main points was that things would definitely change regarding health and pension coverage for foreigners, and that it’s something we had to deal with sooner rather than later.”
As it turns out, they were right. In June 2007, the Council for Regulatory Reform released one of many three-year plans for promoting reform. Buried in this tortuously phrased slab of bureaucratese is the recommendation that, along with payment of taxes, family situation and Japanese ability, the Immigration Bureau take into account whether or not foreigners are enrolled on public health insurance.
The new visa guideline was created in response to the report’s recommendations. Though it was initially reported as being a simple case of “no dues, no visa,” the actual situation is more complicated than that. A PR spokesperson at the General Affairs Division of the Immigration Bureau, who declined to give her name, sounded genuinely surprised that the issue had garnered as much attention as it had.
“Legally, if someone isn’t working, they won’t be able to get a work visa, but somebody won’t be refused permission just because they aren’t signed up to shakai hoken,” she explained. “If somebody doesn’t show their [insurance card], they aren’t going to get denied permission. They’ll just be asked why they don’t have one.”
That’s it? “Yes.”
Not exactly deportation, is it? Still, the guideline promises to introduce yet another gray area into an already opaque process, and some may prefer not to take their chances.
“It would appear that they want to use the guideline as a tool to disqualify those that an individual immigration official might feel doesn’t belong here,” says Ronald Kessler, the chairman and founder of the Free Choice Foundation. “In my opinion, the last thing in the world they’re actually thinking about is our health and welfare.”
Free Choice has been waging a high-profile campaign against the new guideline, running adverts in English-language newspapers and other publications, including this one.
“While Japan’s universal health care program is basically a good system, it was created with Japanese citizens in mind — as well it should be,” Kessler explains. “But, let’s face it: no one shoe fits every foot. With regard to health care, foreigners are typically confronted with problems that Japanese citizens are not.” He cites repatriation of remains, which can cost 1-2 million yen, as an example. “Who pays for this? It’s certainly not public insurance.”
In its adverts, Free Choice says that using immigration to enforce enrollment “takes the humanity out of medicine.” It hopes to secure a new guideline that explicitly allows foreigners to choose between public and private insurance plans.
The GU’s Tesolat disagrees. “The point they fail to mention is that it’s not a choice issue,” he says. “Public insurance only works when everyone is in the same system.”
While Free Choice works to reverse the decision, the GU is negotiating with the relevant government agencies to put pressure on companies to enroll employees in shakai hoken. Tesolat expresses concern that when the new guideline comes into effect next year, people may be forced by their company’s intransigence to enroll on kokumin kenko hoken, thus losing out on key benefits of shakai hoken such as wage protection. More importantly, anyone enrolling on kokumin kenko hoken must cover back payments for up to two years — a cost that is borne by the company in the case of shakai hoken.
So what’s the best option? Frustratingly, it’s still hard to say. What seemed in the summer like a simple choice — sign up or go home — has turned out to be a lot less clear-cut. Whatever the fairness of the new guideline, its vagueness about implementation leaves foreigners in an awkward position. Take the plunge, or take your chances.
For more information, see:
Free Choice Foundation (www.freechoice.jp) General Union (www.generalunion.org) Nambu Foreign Workers Cacus (http://nambufwc.org/) Social Insurance Agency (www.sia.go.jp/e)
There may be trouble ahead…
On paper, Japan’s health care system is pretty remarkable, promising universal coverage at a low cost: according to the latest WHO statistics, health expenditures account for 8% of GDP, compared with over 15% in the U.S. However, a report released by McKinsey & Company last November identified a number of problems which were “threatening the sustainability” of the system.
A spate of high-profile cases in which patients died after being turned away from multiple hospitals have highlighted the shortage of physicians, especially in ERs. However, the McKinsey report argues that overworking of specialists, a lack of financial incentives for hospitals to provide emergency care, and inappropriate use of ERs by the general public are also to blame for such incidents. Other more general problems include weak incentives to improve quality, a lack of clear accreditation standards for doctors, and over-utilization of health care: the average Japanese patient sees a doctor 14 times a year, compared to five times in the UK and four in the U.S.
Then there’s the issue of Japan’s every-grayer population. As the proportion of elderly people rises, health costs are predicted to increase substantially, just as the labor force — and the number of people paying into the insurance and pension schemes — is shrinking.
This story originally appeared in Metropolis magazine (www.metropolis.co.jp)© Japan Today
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Waiting for the good JT gang's 2 cents on this. I have been using private insurance for years. My pension is offshore private... Last thing I wanna do is hop on board a sytem I am not a fan of for a gaijin. I cant even score proper heartburn meds and have Zantac shipped from a buddy when it kicks in and I am fit freak but hit the brews often. Granted Japan medical blessed my wife and kid with great birthday and my boy and wife are on NHI. But this new law will change everything for all of us, ALL on visas or own biz here. I wonder if this Viva Vida thing is worth it or accepted by immigration? I have rarely made a trip to the hospital but can only imagine I will end up in one someday. Who knows maybe I will end up under a car dragged for a few kms or any other random death/injury.. Anyway, will they make me pay up NHI since I came? My employer does not offer NHI or pension but the way its set up is to put more money in our pockets, me included. This will certainly change. My spouse visa needs to be renewed Fall 2010. Any feedback from a JT reader is appreciated. And another reason NOVA prez should get 20yrs and tap his offshore piggy banks...
Scheme: A secret or devious plan; a plot.
Oh, I get it!
Cases of patients being 'turned away' from hospitals is not unique to Japan at all. I've read of this in NZ and Australia quite recently ... As for running the risk of not having a pension, and I write this because it's just too stupid to consider that anyone would take a risk on medical, one can only wonder why? Never heard the ant and grasshopper story? life has a way of suddenly turning the tables and kicking people in the bum ... and hard, be careful.
This whole matter of opening up the shakai hoken to foreigners has been tossed around for too many years now.
This guy had some interesting things to say about the private insurers and what Ronald Kessler is up to: http://hoofin.wordpress.com/2009/09/25/getting-your-money-back-from-vivavida-global-health-interglobal-if-you-are-required-to-take-japanese-national-health-insurance/
He seems to feel that if you are forced into your local program for the 2 years of back installments, you should try to get your money back from the private insurers.
I was on the Japanese national insurance for a few years, and then I moved to Tokyo where they neglected to tell me I have to change my insurance details. Thinking I was still insured (as I had informed all the relevant authorities of my move) I continue seeing my doctors as usual. Manage to accumulate 9 moths worth of medical expenses before they tell me my insurance isn’t valid. I worked out I would have to back pay over 200,000 yen for the medical treatment received in that period. Went to my local ward office and asked to be signed up, was told I’d have to back pay the 9 months of coverage and I wouldn’t be reimbursed for my treatment in that period. I couldn’t afford to sign up for health insurance as well as back pay the claims from the year, so I had to go without insurance. Now 15th months later I can’t afford to rejoin the scheme due to the ridiculous back pay system. … Not pleased.
This article was so-o-o long I had to take a break. I live in the US. I worked two years in Japan at $45,000/year. I paid $40/month for standard health insurance. I pay $450/month for the same insurance now. It is ridiculous for Americans to pay so much in the US. I really don't know the solution, but I really wish it was illegal for health insurance to contribute one cent to any American politician! Just make sure that every Japanese worker pays his premiums for health insurance. This includes the bureaucrats who "forget" to pay sign up.
Been with the Shakai Hoken for 30 years now, but always hard to know if you are still on board and what the future holds. Last year they asked me to produce a 'vital' postcard that had been sent out 12 years ago if I was going to be wanting to claim a pension.
You need to a) keep all paperwork in one safe unchanging place, b) check up by calling in or have someone who can check up for you every so often, (office staff at your institution will have easy lines open to the relevant people) and c) be prepared at any time to get hit by some unseen clause or demand.
This is a major issue for foreigners in Japan, so thanks for JT for highlighting the issue.
I've been on private health care for all of my 6 years here. If I died, my insurer would pay to ship my body home, if someone in my family died, they would pay for me to go home for the funeral, if I have a major accident or disease, they will pay all but the first 5-10,000 yen. In any of these situations the Japanese system would mean colossal amounts of money paid by me or my family, leading to possible bankruptcy. It simply does not cater to my needs.
Finally, the pension scheme proposals are basically extortion or simple robbery. I would guess that only 10-20% of Japan's foreigners stay more than a few years, and thus the pension scheme to the other 80%+ is an added tax that will be mostly unreturned. Any payments made between 4 - 24 years here you would still receive 3 years maximum - that, to me, is a complete disgrace from a supposedly democratic country.
I fully support the Free Choice Foundation - there simply has to be choice for foreigners in Japan due to their wildly differing needs. Perhaps what the Japanese government could work on is making sure that ALL foreigners have some kind of health insurance, and making the pension scheme optional.
If this doesn't get sorted out sufficiently, I will be leaving on or before the day when my visa runs out (2011) and I shall take my expertise elsewhere.
Correct me if I'm wrong, but permanent visa holders wouldn't be subject to the requirement, nor spousal visa holders... both may work, but could still stay if they didn't.
I feel pretty certain about permanent visa in that it doesn't need to be renewed... nor does the re-entry permit, now.
I am getting this information from the Hoofin website.
There are two things going on. One is this added checking about what kind of insurance you have.
The other is the fact that the new election with Hatoyama means that all the Japanese will be facing changes in the always the way things have been category.
Labor and Health Minister Nagatsuma is getting seven times the previous pension budget to bring all the records up to standard, and also to cross check everyone else's.
Hoofin to You says, going forward, the health and pension departments are going to be all over the Japanese regardless.
So the expatriates and the Free Choice Foundations are arguing an old argument. Everything in Japan is being brought up to a new standard. It's no surprise this will impact the foreigner community.
So basicly, only permanent residents will be free from the insurance racket. All those teachers who are making near minimium wage (the same salary as 12 years ago) are going to be paying nearly 50% of their wages to various tax offices. 250,000 -7% for national 10 to 15% for local another 10% for insurance and 15,000 for penion, then 2000 yen for unemployeement. On top of the special tax on bonuses. Japan is simply taxing itself out of a real chance that anyone would want to do business here. Time to leave.
Great and concerned article.
I am thinking how to escape from this b'llshit as I never want to pay again to this system.
Patrick Smash- As I said, a re-entry seal in your passport is no longer necessary (as long as you are in the country one day a year). But the permanent visa seal in a passport is good for the life of the passport (unless the authorities take it away), then it's a simple request to update the next passport. In addition, the gaijin card is a separate document that just conveys (in part) your passport information.
Now, as the article states, proof of NHI is necessary to change or renew visa status. Updating your passport is not renewing a visa, obviously the visa has already been granted and employment isn't necessary. Needing a new visa because your old one will expire or changing from spousal to permanent is.
noborito - I've totally lost you. No one making 25 man a month would be paying 50% in taxes and social insurance. That's just plain wrong. At best, 15-20%, just like any other country.
Unless you are talking about third world countries.
Most foreigners are aware that they should be inscribed into the National medical system. Nevertheless, some do not apply based on the "freedom to choose" concept. Disagree with the law is not a valid excuse not to respect it. The "freechoice" policy lacks completely of a solid point to defend its concepts. It says that "Many non-Japanese get the treatment they need when visiting international clinics where non-Japanese doctors practice, despite the fact that they are outside of the Japan's social medical system". Do these doctors have a license in Japan? Why they are not inscribed into the Social medical system? How many exactly have access to these doctors? Rules are very clear and very fair: they are the same for everybody. If we want to have the same rights as Japanese people, we should also be under the same law.
W505a, Most foreigners come to Japan as ALT's, and currently they make 250,000 yen per month as a standard. jobsinjapan, gaijinpot, interac, etc. The salaries haven't changed in at least 12 years. Enforcement of these taxes would come for many people to nearly 50% of your income. It's a bit item. 25,000 yen a month for health insurance and your not covered overseas. I pay 8000 yen a month with Global Health Care and I have 100% coverage anywhere. The Japanese system is designed for Japanese. Now they want us to pay for it. That said, we have no control over it as it was totally designed for Japanese. Let them have their health coverage. Let us have ours. But they just want the money. It must be said, only we are being forced to have it. Many Japanese still are not paying into it. They don't have too.
From the article, it sounds like the answer is easy:
So go get your visa renewed and when they ask why you aren't signed up for Shakai hoken, just say you wanted to, but your employer wouldn't allow it, and an fact fudged your "on paper" working hours so that it would seem that you wouldn't qualify. Simple. Then, let the government worry about and go after the real culprits: the stingy employers saving a few bucks at their workers' expense.
Japan has some of the world's most awesome health insurance. Don't think I could even live in the US because of inflated medical prices.
Noborito, I strongly think your facts about the taxes are totally wrong.
Someone making 250,000 yen a month won't be paying 50% of their income (125,000 a month) in taxes and insurances. At best, 37,500 (15%). Where are you getting 50%?
If you are paying 8,000 a month to Global Health for full coverage, it's because you aren't paying the progressive rates in NHI. You are free riding the system where the other people pay much more to subsidize the prices to you.
Japanese physiology is no different than anyone else's. So the idea that the medical system is designed for "Japanese" and not for all ill people is quite a stretch. The system is designed for everyone.
You may have language barriers, but you would have those even if Global Health insures you, unless they are paying for an accompanying translator.
50% taxes? That's nonsense.
When they introduced the fingerprints and photo system at airports: time to leave
When they introduced IC Chip on foreigners registration card: time to leave
When they introduced compulsory public health insurance to renew foreigners registration card: time to leave
OK here is an estimate of the taxes on 3,000,000 yen, from the same blog as before:
I was too low. I said 15%, it is more like 16%.
W505a, don't forget consumption tax. If you save 20% of your take-home pay, spend 20% on rent (untaxed), and spend the other 60% on goods and services, that's roughly another 75,000 yen (2,500,000 x 60% x 5%) being taken from you by governments. And just about every politician is determined to raise that figure in the next few years.
I totally agree with the above statement, we should all band together and report these stingy, cheap-ass, law-dodging companies to the immigration and labor offices so there'll be pressure for them to abide the law. A lot of companies advertise 'fulltime position' when actually they are part-time...
keep it coming guys... I need all the advice I can get.
What's the word on if you are not currently enrolled in the national system, how much will they squeeze out of you for past years? Anyone got info in regards to this?
Myself, I'll give them two years in back payments. If they request any more they can take a hike.
"public health insurance scheme"
"Scheme" implies fraud.
This new guide lines are only that. This mass hysteria is amusing.
I applied to the above group a few years ago looking for something cheaper than the private insurance I had at the time and was turned down simply because I take blood pressure medicine. (I was on no other medications and hadn't had any other health problems.) So good luck to any of you who think it's a great deal. Perhaps if you're in your 20s and staying in Japan for a year or two it might make sense, but real coverage for a long-term expat in the country, no way.
Again, there are two things going on.
One is that the Immigration people are going to ask about your health insurance. Will you lose your visa over it? Probably not. But it will be one lonely cry if for some reason you do. More likely, you'll have a mess because you're not in the right program. So you might as well be in what you need to be in now.
ThonTaddeo above mentions the consumption tax (5%). But all countries have this. In Australia, it's 10%. The U.S. has something called "state sales taxes" which are usually 6% to 8%. So unless you teach English in Borneo, you are going to have that one.
Patrick Smash says the base income tax in Japan is 20%. No way. National tax rates start at 5%. Only at higher incomes do you see 20% (8 million yen?) or more. There is a large exclusion that you get, by formula, as a deduction. It rises as income rises.
Resident's tax is a flat 10% of the taxable---the income reported after deductions.
SIA website has 14.96% out there (as 149.96 per 1000) as a total pension rate for the shakai hoken --- split 50% between employer and employee. It is the two years ago rate. Now it's 15.7%. In America, it's 15.3%, split 50-50 between employer and employee.
No health insurance takes 15% of your pretax salary here.
"public health insurance scheme"
"Scheme" implies fraud."
You got that right, sarge. I went back on the "kenko hoken" a couple of years ago and got screwed by the system when I really needed help about a year ago.
U.S. media outlets can run all the glowing reports on Japan's health care system they want, but the reality is something quite different all too often, and not just for foreigners. Japan has its quality medical facilites and dedicated care providers to be sure, but far too few in both cases.
Good luck to any and all of you who choose to make Japan your permanent home as the years pass and you need health care from the Japanese. You're going to need all the luck you can get.
The second of the two things:
The new health and labor minister was voted in specifically to fix the social insurance mess. So all the Japanese are going to be getting prodded about what they are on or not.
Immigration, when they start asking, are clearly going to point this out about how everyone in Japan is being asked these things. They just had this big election.
They won't get their 2 years back enrollment if you get kicked out of the country. But the whole purpose of the Free Choicers is to get out of the rule, with some excuses about having taken care of that already or some such.
It won't fly.
Marry a Japanese local, keep employed with US govt or contractors and skip the payments to the health insurance all together. Life is good.
I don't think the figures in your chart are accurate. National pension is a fixed rate, but local tax varies widely depending on where you live, and national health insurance is not just a fixed percentage of income; there's also additions depending on the number of people in the family, age, etc etc. My total contributions over the past few years have ranged from a low of 18% to a high of 28.9% last year (most of the increase being local tax, which has more than doubled).
I think this is one of the major reasons the LDP got the sack; people are(were) being asked to pay increasingly more for increasingly less return.
Well, I don't know about the website figures. But any internet research shows that the national and local taxes are nothing like what the people who don't want to pay say they are.
Here's one. The City of Nagoya explains how residents tax (f1at 10%) on 5,000,000 yen income is just 140,000 yen.
It says: "Residence Tax has one flat rate of 10%; it goes to your local governments and is divided 60:40 between your city and prefecture. All the key numbers are on your income tax withholding statement which you received from your place of employment in January. An example statement and explanation is on the NIC website."
So if a 10% flat tax turns out to be 2.8% of someone's gross, a lot of the other numbers batted about here must be equally off.
Here is a better link: http://www.nic-nagoya.or.jp/en/canyouhelpme/NIC_guide_to_residence_tax.pdf
That link doesn't get you right there, either. It's the NIC Guide to Residence Tax if you Google it.
Let's also not forget that the Japanese health insurance does not cover long term hospitalisation either and most Japanese take out supplementary insurance.
I don't know how you are figuring the final number though, Patrick.
You are just putting out gross tax rates without saying what the exclusions are. It isn't a matter of "finding plenty of exclusions". The government has stated ones for your earned income, the insurances you pay, your family, etc.
No one is paying 14% of their income to the NHI unless they took a bit hit to salary. It is based on prior year income. Any search you do you will find a number like 8 or 8 1/2% of taxable.
I will send to Hoofin and ask if he would include the Nagoya information sheet on his site.
I think W505a should work for Interac or other Japanese company to get their staff in this system. He/She seems to love it. As for 99.9% of foreigners, either we don't need it as it is too expensive and we will never get anything out of it, and/or it was not designed for us. The Japanese government only wants to tax us for something we don't use or need.
99.9% of foreigners? Most foreigners are from China, Korea, Brazil, Phillippines and Peru. Are you sure you speak for the 99.9% of foreigners? There is a clear bias on this discussion towards thinking this will be applied only to English teachers: they could be majority here, but by all means are a minimal part of total number of foreigners living in Japan.
Free rider issue is at the base of this discussion: young, healthy people do not want to pay for a service they don't use. Japan has a system that does not allow that. The US does not have it: if you are young and healthy you don't pay much, but as soon as you get older and your health deteriorates, you go bankrupt.
Just obey the Japanese law and pay. If you don't do it, then do not complain later when you get punished.
pathat - How exactly did you get screwed by kokumin kenko hoken? That's what I had when I was hospitalized and it didn't cost me an arm and a leg.
Hoofin has this up at his site.
I don't know why Nagoya makes it so hard to get this.
The woman in the xample makes 5 million yen and paid just 140,500 residence tax.
Then, he has this one for a single person making 6 million yen:
Where is the 50% tax?
Who is right?
W505a, you seem to be taking this so personally. Are you Japanese or something. How can so many of us be wrong? O us foreigners are wrong and you are right because you are Japanese? One reader pointed out Sales tax, which I forgot. We are paying even more than 50%. Japanese people might be willing to do this, but there are other places to work. Japan was once the land of the rising sun. I believe the sun is not rising anymore, but setting. Setting on a cynical, non-welcoming, business unfriendly land.
Noborito, it's nothing personal about it. Just VERY frustrating!
There are never honest facts in community discussion, nnly honest opinions.
Which is fine, except the BBS's say one thing, and the independent bloggers say something else. Then other people set up foundations for their own agendas. Who do you believe? If it weren't for the regular news reporters, who aren't always 100% by any mans, who would give us the story?
I wound up paying nearly 400 large for my residence tax this year. Shakai hoken would stick another 55,000 per month onto the list of things for which I get nothing in return.
W505a, I don't think Nagoya makes anything hard to get, JT messes around with underlines in urls and interprets them as italic markers.
But the examples certainly don't tell the whole story. The woman in the Nagoya example makes 5 million yen but claims for "a dependent spouse and other dependents", which reduces her total taxable income by a whopping 1.14 million in addition to the standard deductions. That's the same as the rest of us earning only 3.86 million in the first place. Without her dependents I reckon she'd be paying 250,000 in residence tax.
Cleo, good catch!
W505a, you're being a bit disingenuous when you compare Japan's national consumption tax to US state sales taxes. In my home state when I lived in the US, there was a 6% sales tax, but it didn't apply to essentials like food and utilities. Poorer people -- particularly single poor people -- spend a proportionally larger percentage of their disposable income on things like this than the rich do -- and in Japan they have to pay tax on it! I find it abhorrent that the Japanese government taxes people for things that they literally cannot live without. If people's welfare really is what comes first, there should be no tax on unprepared food, electricity, and heat.
And in the US you can always move to a state with lower taxes if you don't like how your own state is being run. (Indeed, this competition for residents' and corporations' business keeps taxes from getting too high, and benefits everyone.)
Look it, I don't know who to believe, but this is his version of 5 million yen without the family included:
The National Tax is 3.43%.
The Residential Tax is 5.38%--not as low as what Nagoya said, but not a flat 10%.
Total kokumin nenkin coupon plus health insurance is 7.8%, and no more than 400,000 yen in a year.
The example shows that someone making 5 million yen would NOT be paying in the 20% National Tax bracket.
Some states in America tax food with sales tax: http://www.cbpp.org/cms/?fa=view&id=1230 Cleo, you forgot transportation, which in America does carry the sales tax. Most poor people travel around in cars. If they even have the smallest house, there is a real estate tax.
You guys just sound like people who will make any excuse not to pay something if you can figure out a way around it.
I don't know whose figures are exact, but everything you give here seems to be shot down somewhere else.
Japanese who use the health care 14 times a here have to pay 30% every time they go. So if you use less, how are you paying for them?
You dont like it, go to another "state", as ThonTaddeo says above. In this case, it means another country. But for a system to provide affordable health care to the elderly and the poor, it has to take money from the young and rich. You could say that the system is expensive, but if you choose to stay here, you will live longer and in better health, and this will not depend 100% on your income.
About taxes: My wife gets a 255,000 yen salary as teacher, and in hand receives 220,000. That is less than a 15% discount, including taxes, pension and health insurance (My income is not subject of taxes, so hers act like the only income for a family of 3).
Two years ago I had an ACL reconstruction operation, spent five days at the hospital and it costed me 25,000 yen (I payed ten times that and then I received a part back). When my wife had a baby, we received more money than what we paid.
Someone must be paying for it, but for a low income family that has babies (and a father that get his ACL fixed), it is an excellent deal.
Patrick, except at Hoofin to You! the guy put in some time to explain how the taxes work. Anyone can look and at least there's something to work with.
You just keep saying, well it's 20% this and 14.96% percent that and then they will easily take another 10% there, and pretty soon it's 50%! But you don't really give examples.
It sounds like if you can cut out paying nenkin coupons and the Residential Tax and get some freebie health care coverage, you save a couple thousand man yen. That's really your big issue.
Anything on that list that you can get around paying, that's the goal.
Patrick, you're the one cmplaining to everyone about a 50% tax. I just want to know what the truth is.
The SIA website just says 14.96% SPLIT between employer and employee. For both pension AND health. I'm just asking where your came up with the 14.96% for ward health insurance.
Every time you get called on one of your false statements, you find another website and spin some other thing.
I'm not looking to get out of paying anything. But you are.
Patrick, it's just hard to nail down what you're saying.
Yes, noborito pointed directly at 50%. You said that the base rate was 20%, then the 14.96% social insurances. Then, you said "and everything else." Right above you say Residential Tax is 10% and then you've mentioned the consumption tax (5%). So total 49.96%?
Now, you're saying, no, that's out of context.
Someone making 5 million, they get 1,540,000 off the top, plus another 380,000 personal deduction. So their net is 3,080,000. Let's take 14.96% health like you said. That's 748,000 yen which comes off. So taxable is 2,332,000 yen.
From the site http://www.foreclosedjapan.com/jtax.html , which was yours, the first 1,945,000 is at 5% (97,250). The remaining 387,000 is at 10% (38,700). Total national tax is 135,950 yen --- 2.71%. Not 20%.
Somebody making 5 million yen isn't even paying the 20% bracket.
I trust the 2.71% because here's a calculation right there. The other posters can do the math or point out what's wrong.
It just sounds like taxes are reasonable except for those who don't like to pay taxes.
The SE Asians you are so worried about probably aren't making more than 2 million man a year, and I doubt taxes and social insurance adds up to very much at all. Although living on 2 million yen gross is a stretch in any event. I'm not sure what your mentioning them adds to what you were saying, except to change the subject.
You say that the government is going to change the laws on dependents, but you don't mention that they are handing out big cash grants each year for each child up until junior high, and paying towards high school. Again, what's it to do with health care?
Almost all of Japan's debt is owed to other Japanese--virtually none of it owed to foreigners. The money due and the money owed is all in Japan. Again, what's it to do? I don't where this means anything about what foreigners in Japan have to pay for health insurance to the local government.
Like I say, when it comes to nailing down which of the many opinions out there is right, you change the subject on to something else. It's really hard to get a straight answer.
Enjoy your beer.
In regards to % of income taxed per capita (Income tax (national & resident), Corporate, Sales, Real Estate), Japan sits at an average of 23% which is one of the lowest among OECD.
And if you also include pension and healthcare levies,(Shakai Hosho) the only countries lower are the U.S., Switzerland, Korea, and Mexico.
More details are shown here.
Hey don't get me wrong, I've always paid my dues and have no intention of not doing. I'm simply trying to point out that the figures you are looking at don't tell the whole story. We can't all claim for a gang of dependents to bring our tax and insurance bills down.
As for those folks trying to tell us that a private health insurance scheme is cheaper than the national health scheme - well, duh.... It's cheap if you're young and healthy and considered not likely to use it! Try asking your private scheme what the dues would be for someone with a couple of chronic illnesses, or with more than half a century of living under their belt. The whole point of a national scheme is that everyone pays in their fair share and everyone gets out what they need. If the young, fit and healthy skim themselves off then the dues have to be higher for everyone else.
Be thankful for your good health, pay up and shut up. Then maybe we can all get by with paying a bit less.
The problem isn't whether everyone should pay in - of course they should, whether it's health insurance, taxes or whatever. The problem is making sure everyone pays their fair share. If a man earning 3 million a year cannot keep his family on that and his wife has to go out to work and earn another (say) 2 million, it's not fair that they pay considerably more in taxes and social insurance, and get less back, than a family in which the man earns 5 million and can afford to have his wife stay at home. (In the second family, the wife can earn up to 1 million pin money without having to pay a penny in taxes or insurance, and without her husband losing any of his deductions.) 'Tain't fair.
Cleo, not directed at you. It's the other stuff. And I think Thon was the one to add about sales taxes. You're right that Nagoya's example was for a family. A single person would have something like that 250,000 yen (works to 5% of gross).
I agree there is some unfairness in how Japan taxes for the medical. Another example is if you take a steep hit to income while on the Kokumin Kenko Hoken. The ward will bill you off the prior year's income--whether you have it handy or not. So you can get stuck with 450,000 insurance charges on 3,500,000 yen earnings.
Part of Japan's administrative problem is that for such an anally tight country on some issues, they are a regular banana republic when it comes to others. So instead of improving the system, they have to waste time debating and arguing with every group that has chiseled out a good thing over the last 50 years.
@Sarge: I didn't get screwed by the insurance system. I got screwed by incompetent doctors and what's supposed to be a leading int'l hospital in Tokyo a year ago.
My advice to people is don't live in Japan as you get a little up in years without a Japanese spouse-regardless of your language skills-because I know from personal experience where a single gaijin ranks on the priority list for the Japanese and health care.
Luckily I was able to get most of what I needed through the VA after I came back and things are O.K. now, but it was a helluva a way to be forced out of Japan and the life I had to leave behind.
Thanks for asking, sarge.
I know the InterGlobal policies (= Global Health Care) backwards and this certainly doesn't tell the whole story. You're not covered for pre-existing conditions (unless you're fortunate enough to be in one of the big group plans where medical history is disregarded), you have to pay upfront for outpatient expenses, including MRIs, and if the hospital you need to be admitted to is slow in providing the requisite info to your insurer, you may have to pay upfront for your inpatient charges as well. Not to mention the fact that the Japanese national scheme isn't bothered about pre-existing conditions or whether you've been abusing your liver for years. Many hospitals charge 150% of the standard charge if you're not insured through the Japanese national scheme, so if the treatment you need might really cost your insurer an arm and a leg, it wouldn't be unheard-of for them to get you to enrol in the national scheme anyway (possibly paying the back charges for you, if it's cost-effective). If you develop a chronic condition or your insured child has a congenital condition at birth, there may be a cap on what your insurer will pay out.
As for the coverage for repatriation of mortal remains, it's a rare case where the insurer gets the information to provide coverage before the repatriation takes place. In most cases, the insured's family (or company, for the luckier ones) have to pay upfront and then claim back, making their own arrangements with a funeral director (local cremation in Japan and transport of ashes back home in a family member's hand luggage is much cheaper). So unless you or your family has that ready cash, it's not that much of an advantage - you could just as easily pay a little extra into a life insurance policy.
Having said all that, if you're
Having said all that, if you're in a long-term coma after an accident and need to be transported home to a country with free public healthcare, then private insurance perhaps has the edge. Then again, if the accident was caused by another party, then their insurer will probably end up paying the bill in the long run, whether directly or via subrogation.
(/insurance bore) (time for dinner)
Cleo. I agree.
The definition of Shakai Hosho under Japanese law is "to provide insurance benefits against old-age, disability, death for all people in order to prevent deterioration of the stability of the livelihood of the people through national solidarity and thus to secure and improve the decent standard of living of the people."
The amount of premiums+out of pocket expenses versus that of actual medical costs for the younger healthier adult population is far net positive while for older population and those with chronic illness, the amount falls into a negative. But the system of offering low premiums and low out of pocket costs for the elderly can only be achieved if everybody especially the young, willing and able participates in it.
Interesting to see so many comments - and obvious confusion - on this topic. I must say, I have to agree with Patrick Smash and his comments to W505a (aka hoofin?). The govt sites should have the most accurate figures for tax/health insurance rates, etc. There's no need to complicate things with so much speculation.
As far as I can see, the new regulations will not change anything - expat health insurance cover has never been an official substitute for NHI anyway. But it can be at a personal level - you choose, pay into the NHI + pension (you can no longer separate the two) or try to stay out of the system and purchase your own health insurance - or both. Will the govt offices enforce this? Unlikely. As the quote says in the article, “Legally, if someone isn’t working, they won’t be able to get a work visa, but somebody won’t be refused permission just because they aren’t signed up to shakai hoken,”.
Regarding taxes.... Relax, Japan isn't taxing us to death - yet.
Good article and comments here, but I think the statement "Pension and health insurance payments are made at the same time, and cannot be paid separately" applies only to shakai hoken and not to kokumin hokin (the article reads that it is true for both). Kokumin health and pension are separate programs and administered by different bodies, and (correct me if I am wrong) a person can be in one and not the other.
Anyways, two separate main issues here. One is the pension payments in shakai hoken if somebody has to go on it, and the other is the back payments for kokumin health if you have to enter that. Obviously the pension, or "gaijin tax" system, is ridiculous and should be fixed. About the back payments, if people are going to have to enter the system then the government really should think about having some kind of amnesty, for example with some kind of formula for how much extra you pay if you actually use the insurance over say the first two years. They would probably end up collecting more that way than if they dinged people with a huge bill all at once, and caused people to decide it is time to leave.
And while they are at it they could clear up all the legal gray areas. For one it is not unreasonable for people to think it is acceptable to take out private insurance when the companies operate and advertise openly (another reason for an amnesty too). And clear up the definition of "resident" while they are at it. If I am not the head of my own household because I am not a "resident/juumin" in the legal definition, I don't get why I have to have national health insurance because I am one.
I guess it's come time to pay in. Of course a good accountant can help with these problems!!
I wouldn't mind joining if they cleared my backpayments. I think in this situation it's the right thing to do.
For the love of all that is holy and religious, we people please STOP refering to the pension system as a "gaijin tax"?
If it was a "gaijin tax" then the locals wouldn't be expected to pay it. Guess what? They ARE expected to pay it (whether they do or not is seperate issue.)
The re-entry permit? THAT is a "gaijin tax" But that is going away soon, thankfully.
Heh heh. Good luck with that.
A giajin surcharge, then.
That would be incorrect as well. The payments required to the pension plan are required by all individuals between the ages of 20 and 60 living in Japan. Exemptions are made for students and low income individuals.
In fact, a family of 4 can make up to 3.35 million yen a year and only need pay 3/4 of the required amount into the pension system.
The pension system is NOT a tax nor a surcharge on gaijin. It applies to everyone in Japan.
Re: Tax amount
I just dug out my pay slip from last month.
Background: Salaryman in Tokyo 2 dependents Make considerably more than an English teacher
Break down as follows:
Health insurance: 3.2% Pension: 3.4% Unemployment insurance: 0.4% Total Shakai hoken: 7%
Income tax: 14.25% Inhabitance tax: 7.9%
Total tax: 22.15%
Net vs. Gross salary: 29%
Claims of 50% taxation are a bit silly.
But not everyone receives the benefits. Japanese recipients receive disproportional large benefits for both pensions and healthcare. It's a non-refundable deposit that few foreigners will ever be able to redeem.
@chuckers- Who pays the pension premiums is not the issue. It's a gaijin tax because foreigners don't receive the benefits (except in very rare cases) and receive only partial or no refunds on their payments, while Japanese payers will (hopefully) be able to receive the benefits when they are pensionable age. Paying into a benefit plan when you can't receive the benefits is a tax, not a pension plan.
If you think you aren't going to be be receiving it, then talk to your home country about forging an equalisation treaty with Japan. Many countries have such agreements:
Germany, US, Belgium, Australia, France, Canada, Austria, The Netherlands, the Czech Republic all have agreements with Japan that payments into the Japnese system count towards receiving pension for either country. Members of those countries DO NOT LOSE BENEFITS by paying into the Japanese system. They are able to claim Japanese pension once they have met the 25 year period WHICH INCLUDES WORK IN THEIR HOME COUNTRY.
UK citizens are allowed apply for a 5 year exemption from payments into the Japanese system if they apply for it.
If you are not from one of those countries, lobby your home country for equalisation or don't come to Japan if you are going to break the local laws.
Japanese recipients do NOT receive a "disproportional large benefit" from this because they are paying into it longer. The one's making a disproportional benefit are those people skirting the law and not paying what they owe.
These laws apply to Japanese and foreginers alike. The only difference is that foreigners are allowed to ask for a 3 year capped refund, provided they leave Japan and apply for it. Locals don't have that option. Is that fair?
The pension system is not a tax on gaijin. Period.
UK persons should apply for a certificate for an exemption from the Japanese system if they want to opt out. They are eligible for a 5 year exemption with possible extension provided they are paying into their system back home.
Are you paying into the NI system "back home" Patrick?
If you find these terms unfair, lobby your member of parliment to get the agreement amended into something more favourable.
I have about 5 more years to go before I am to be considered vested in the Japanese system. I won't have paid into it for that entire period but would still be eligible. Pull out of it for a measly 3 years worth of capped contributions is unfathomable to me.
Personally, I don't think it will make a whole lot of difference at all.
Many people are screaming and yelling about the "tracking devices." My PASMO card does a better job of keep track of my whereabouts. At least as long as I am on a train line. My mobile phone can easily be pinpointed throughout the country and it is with me about as often as my current gaijin card.
Tracking my whereabouts with the new gaijin cards would take a huge cost in infrastructure by setting up antenna everywhere. Pretty sure that didn't happen. And using current phone antennae would probably not be technically possible.
My DL already has an IC chip in it also, so big deal.
Others are claiming the local cop shops are going to be scanning every foreigner walking by for RFID info. The local constabulary may have copious amounts of time, but honestly, I don't think they have THAT much free time. I am going to keep walking by my local koban every morning on the way to work without so much as a second thought. After the new cards are issued, I will probably be accosted by the boys in blue about as much as I am now. I.e. not at all.
Anyone still desparately paranoid about it can always cut a corner out of their tin foil hats and wrap their wallets in it. And, truth be told, I already have a small sheet of aluminium foil in my wallet in an effort to keep credit card skimmers from scanning my butt in crowded trains.
If that isn't enough, start booking your tickets.
Hoofin says he thinks it will be based on on what the new Labor Minister (Nagatsuma?) does with all the changes to the Japanese system. They might merge all the health and pension programs.
In such an environment, I wouldn't go down to the immigration without an NHI card or employer coverage, but that's just me.
I have been coming back many times to read comments about this particular subject for some time but it seems no one is addressing my concern. I'm in my 20s and just don't want to pay for any health insurance/pension. Need to state that I'm not an english teacher. I'm OK without it. Just sdon't need any. Anyway to keep my plan?
I think your question has been answered, many times. The whole point of insurance is that you pay in when you don't need it, so that you can draw out when you do. 'I'm alright Jack' doesn't work. Be thankful you've got your youth and health, and stump up your fair share.
You could try moving to a place where they don't have a fully comprehensive national health insurance /pension scheme, and start saving like billio for that inevitable rainy day.
No need at all to state whether you're an English teacher or not, it's neither here nor there.
Work visa can be issued only for full-timers. Full-timers must be enrolled in shakai hoken. This J-government must be logical. If they issue work visas for full-timers, the employers-sponsors must enroll their full-time employees in shakai hoken and present the relevant papers for visa renewals. Now with this new law the J-government again puts all burden on individuals, not on companies.
Yes the labor office should definitely check out and investigate these illegal and blacklisted companies and do something about it.
Is there anyone without National Health Insurance who got their visa's renewed after April?