Japan National Council Chief Revises Draft of New Benefit Program

Tokyo, July 14 (Jiji Press)–The head of Japan’s suprapartisan National Council on Social Security on Monday presented a revised draft of a new benefit program for low- and middle-income workers. The council resumed discussions for compiling an interim report at the day’s meeting of working-level officials. The modified draft submitted by the council head, Itsunori Onodera, chairman of the ruling Liberal Democratic Party’s Research Commission on the Tax System, proposes introducing concrete support measures, including benefit payments to low-income earners and people who cannot work due to diseases or disabilities, in fiscal 2029. Eligible for the new aid program are people with a certain level of earned income, according to the revised draft, which also calls for providing benefits, consultations and employment support in an integrated way. “We will collect opinions from each party (at the next meeting on Thursday) and then come up with a certain direction,” Onodera told reporters after Monday’s meeting. The working-level officials aim to reach an agreement on the new benefit program ahead of a proposed consumption tax cut for food items. Discussions on the tax issue are expected to be carried over beyond the current parliamentary session, which is slated to end Friday, due to large gaps in opinions between the ruling and opposition camps. The modified draft stipulates that the provision of additional benefits to those who earn more than the thresholds at which payments of income and residence taxes and social security premiums become mandatory and see their take-home pay decrease as a result would be a temporary measure. It calls for addressing the issue partly by reviewing the system of exempting dependent relatives of those including company employees from pension and medical insurance premium payments. A conclusion will be reached by fiscal 2030 on measures to support people who live on a low amount of pensions, according to the revised draft. A draft presented by Onodera last month called for reducing consumption tax for food items effectively to zero by lowering the tax rate to 1 pct for two years from April 2027 and providing cash benefits equivalent to the amount of revenue from a 1 pct consumption tax rate for food. It also said that a finely tailored cash benefit program linked to income levels will be fully introduced in fiscal 2029. But opposition parties raised objections, arguing that the financial burden on low-income earners would be significant when the food tax rate returns to 8 pct in two years. END [Copyright The Jiji Press, Ltd.]