Extra Benefits for Child-Rearing Households Eyed in Japan

Tokyo, May 27 (Jiji Press)–A plan to provide additional benefits for households with children under a proposed refundable tax credit system was presented at a meeting of a bipartisan group of Japanese lawmakers on Wednesday. At a working-level meeting of the National Council on Social Security, Itsunori Onodera, the ruling Liberal Democratic Party’s tax chief, presented a draft outline calling for providing benefits, without tax relief, to low- and middle-income workers. The aim is to increase take-home pay for these workers, who bear a heavy burden of social insurance premiums, by adjusting the amount of benefits according to income. The focus will be on whether the parties can reach agreement on standard benefit amounts and other details toward compiling an interim report before summer. “I want each party to deepen discussions further,” Onodera told reporters after the meeting. According to the draft outline, the amount of support will increase in stages according to income to promote workforce participation, with a fixed amount added for workers whose annual income exceeds the threshold requiring social insurance premium payments. Meanwhile, benefits are expected to fall if income exceeds a certain level. Specific criteria will be set based on the extent to which permanent financial resources can be secured, after the government compares the net burden rates of taxes and insurance premiums relative to income with those in Western countries. Benefits are, in principle, expected to be allocated per person rather than by household unit, but the government will consider an exception taking spousal income into account. In addition to freelancers and self-employed individuals, elderly workers who pay taxes and insurance premiums will also be eligible for support. The government will consider raising the income limit for receiving support. The Japanese government will develop a uniform infrastructure nationwide, while local governments will play a central role in work to provide benefits. Measures will also be taken to reduce the burden on local governments, such as having the central government establish call centers. In discussions so far, several experts have called for the provision of only benefits for the time being, arguing that developing a system combining benefits and tax relief would be complicated and time-consuming. END [Copyright The Jiji Press, Ltd.]