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Japan at a Glance

Health Care and Social Security in Japan

Japan's economy relies heavily on the services sector and on high-tech manufacturing.

Health Insurance

As an essential part of social security in Japan, there is a public health-care policy for all Japanese citizens and foreigners who will be staying in Japan for more than a year. All employees who belong to one of these categories have to enroll in an employee health insurance scheme (kenko hoken) via their employer. Their monthly contributions to medical insurance are deducted directly from their paycheck.

If you are a self-employed individual working in Japan, you need to enroll in the National Health Insurance Plan (kokumin kenko hoken) at your nearest municipal office. This is the same place where you applied for your Alien Registration Card. Your health insurance premium will vary according to your income level and the number of people living in your household.

However, public health care does not cover foreign residents living in Japan for less than a year, and it only reimburses 70% of most medical expenses. Various medical treatments are not paid for at all. You might consider taking out additional health insurance from a private company.

Pension Plans

Every person aged 20-59 and living in Japan must enter into the National Pension Plan, regardless of their nationality and citizenship. (There are certain exceptions for students, though.) The National Pension Plan (kokumin nenkin) is supposed to guarantee residents of Japan a basic pension in their old age or in case of disability.

You have to enroll in this scheme at your municipal office and pay a monthly contribution of roughly 15,000 ¥ (in 2010), regardless of your income level. However, if you are part of the Employees’ Pension Insurance System (kōsei nenkin hoken) as well, your employer will automatically enroll you for the kokumin nenkin, and you don’t need to handle the paperwork yourself.

Employee Pension Insurance

All full-time employees working for a Japanese company with more than five employees will become automatically part of the Employee Pension Insurance. It does not matter whether they are Japanese citizens or expatriates.

Your monthly contributions depend on your income level and will be deducted from your paycheck (together with the 15,000 ¥ for the National Pension). Once you leave Japan, you may get back all your Japanese pension contributions in a lump-sum withdrawal, provided you have paid them for more than six months. 

Social Security Agreements

If your country doesn’t have a social security agreement with Japan but has a comparable state pension plan, you might be required to pay contributions in both countries. At the moment, there are social security agreements with Australia, Belgium, Canada, the Czech Republic, France, Germany, Ireland, the Netherlands, South Korea, Spain, the UK as well as the United States. Another agreement with Italy was signed a while ago, but has not been enforced yet.

As a general rule, expatriates from these countries have to pay state pension contributions in Japan only. The only exception being that their employment contract explicitly states that their assignment is only temporary. Then they are exempt from contributing to Japanese pension schemes, but have to pay pension contributions in their home country.

A Word of Advice

However, the application of social security agreements to the situation of individual expats can be rather complicated. It is always best to get in touch with the pension office in your country before moving to Japan and ask for advice.

Of course, not all private pension plans and retirement provisions (e.g. life insurance, pension funds, investing in real estate etc.) fall under the rule for national pension schemes. You should rather contact your investment manager or an advisor from your bank to learn more.