Japanese Pension Handbook old version (Image: Wix)
Due to an increase in senior residents, the Japanese government has changed the pension rules several times. More people are subjected to pension payments, and the premium is raised yearly. Foreigners who work and reside in Japan are no exception.
Here is everything you should know about the Japanese pension scheme.
Do foreigners have to pay the pension in Japan?
Yes, all residents in Japan aged 20 to 59 must enroll in the pension system and pay it monthly. It is obligated by Japanese law. If you’re new to Japan, the pension system usually starts to collect the payments in your second year there as it is based on annual income for the previous fiscal year.
Japanese residents can receive the pension when they are 65 years old and have contributed for at least 10 years. If they are fully contributed for 40 years, they will receive JPY 777,800 annually.
Insured Person Category
All eligible persons that do not fall into categories II and III, including self-employed persons, part-time workers, and students
National Pension Insurance plan (Kokumin nenkin)
Full-time employees; employees that work three-quarters of full-time workers in their company
Employee Pension insurance plan (Kosei nenkin)
Dependent spouse of insured person category II who reside in Japan
Employee Pension insurance plan (Kosei nenkin)
Pension System Types
The National Pension or kokumin nenkin (国民年金)
All residents in Japan aged 20 to 59 that haven’t enrolled in the Employee’s Pension have to enroll in the National Pension. If you fall into category 1 insured person, you must register yourself. Fill in the “Application to Enroll in National Pension as Category Ⅰ Insured Person” and submit it to the municipal office in your area.
The amount you need to pay every month is JPY16,520 (April 2023-March 2024 FY). You can pay through bank transfer, credit card, post offices, and convenience stores. You will get a discount if you make advance payments for a couple of months or do an automatic bank transfer.
The Kokumin Nenkin was established to cover small business owners and the unemployed, employees who work fewer than 20 hours per week in bigger companies and 30 hours per week in smaller companies.
The Employee’s Pension or Kosei nenkin (厚生年金)
Like its name, this insurance plan is for full-time employees and those who work three-quarters of full-time (Category 3 Insured persons). If the employees are married, they have to register their spouses too.
The employer should enroll employees and their spouses into the Employee’s Pension system. You don’t have to register in the National Pension by yourself, but it’s allowed if you want to have more pension funds.
The Employee’s Pension fund is 9.15% of your monthly salary. It will automatically be subtracted every month.
What happens if I don’t pay the pension contribution?
Because it is obliged by Japanese law, there are consequences for people who don’t pay the pension. The Japan Pension Service sends collection notices every month. It will send final notifications if it’s ignored and the insured persons don’t pay.
There are no fines for people that pay late, even after the final notices. However, the Japan Pension Service has the authority to take money directly from bank accounts or seize property. So, you can’t ignore their messages unless you are in for big surprises.
Avoiding pension payments for an extended period can result in deportation. Also, if one day you want to apply for permanent residence, the government will check your pension payments. After all, why would they accept people that violate the law?
Can foreigners get a withdrawal if they don’t want to retire in Japan?
If you are non-Japanese, you can apply for lump-sum withdrawal payments within 2 years after leaving Japan for good. After sending necessary documents, you can expect to receive the money in 6–24 months.
The requirements are:
You don’t have Japanese nationality
You have to contribute at least 6 months to the system
You don’t have an address in Japan
You were never eligible to receive the pension
To get your pension payment back, you need these documents:
Basic Pension Number Notice or Pension Handbook
Copy of passport showing your name, date of birth, nationality, signature, and status of residence
Documents verifying that you no longer have an address in Japan
Documents showing your local bank account details
Send all of your documents to this address:
Japan Pension Service
3-5-24, Takaido-nishi, Suginami-ku, Tokyo 168-8505 Japan
Here’s how much you will get if your last payment is between April 2022 and March 2023.
Can foreigners apply for an exemption?
Living in Japan, especially in Tokyo, is expensive. On top of accommodation, you also must pay health insurance, tax, and pension payment. However, you can apply for an exemption if it’s hard to contribute to the pension every month. There are 6 types of exemption:
Postponement for low-income persons
Special payment system for students
Go to the municipal office in your area to submit an exemption application. Explain your situation there and fill out the form. If your application is approved, you will receive a pension exemption for a year. You can renew it every year if it’s needed.
Pension payment is not something you can avoid in Japan. The bills won’t stop just because you ignore their notice every month. If it’s too burdening, take advantage of the exemption system. If you feel it’s useless because you’ll leave Japan eventually, you can claim your money back later.
Our advice is to abide by the law and enjoy your Japanese life to the fullest.