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Basic Allowance of Japanese Employment Insurance

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Basic Allowance of Japanese Employment Insurance

In Japan, the first thing that comes to mind when people hear the term employment insurance is the basic allowance. While the unemployment insurance system, the predecessor of the employment insurance system, has been abolished over the years, the basic allowance is still customarily recognized as an unemployment insurance benefit by certain Japanese citizens, and is often referred to as the unemployment allowance in common conversations. It can be observed that the basic allowance is the most important part of the employment insurance system.

In this passage, referring to the information from the Japan Ministry of Health, Labour and Welfare, Kaizen will briefly introduce the benefits and duration regarding Japan Employment Insurance System for the reference to current and potential clients. In addition, Kaizen do provide services on Japanese social insurance service and payroll service, please contact our consultants for further information.

  1. Basic Allowance

    Basic Allowance (in Japanese, “基本手当”) is a benefit under the employment insurance system for those insured person who separated from employment due to reaching retirement age, closure of business, or expiration of labor contracts etc. When an insured person becomes unemployed, and if the condition for receiving the basic allowance is met, he/she status will become a "qualified recipient” (in Japanese, “受給資格者”).

    A qualified recipient is not entitled to receive basic allowance for all time, but for a specified period called “prescribed duration of benefits” (in Japanese, “所定給付日数”). The prescribed duration of benefits depends on the age of the beneficiary at the time of leaving the job, the length of time he or she has been a participant, the reason for leaving the job, and so on, and generally ranges from 90 days to 360 days.

    If the recipients of the benefits are “specific qualified recipients” (in Japanese, “特定受給資格者”), “leavers with specified reasons” (in Japanese, “特定理由離職者”), or “qualified recipients with difficulties in employment” (in Japanese, “就職が困難な受給資格者”), they are entitled to more favorable days of payment than other recipients. For those who have left their jobs with improper reasons may not be able to receive basic benefits for two or three months from the date of leaving their jobs. Please refer to the outline of Japan employment insurance system.

  2. Specific Qualified Recipients

    The range of specific qualified recipients is as follows:

    (1)
    Person whose separation from employment is due to having accompanied the insolvency (in Japanese, “倒産”), etc., including the cause of:

    (a) Employers went out of business (including commencement of bankruptcy proceedings, commencement of rehabilitation proceedings, commencement of reorganization proceedings, an application for the commencement of special liquidation, etc.).

    (b) Notification of large fluctuations in employment (in Japanese, “大量の雇用変動の届出等”) is submitted (when expected more than 30 separation of employment occurs within a month), or is affected by the termination of the employment of more than 1/3 of the employees employed.

    (c) Closure of a business office (including cessation of business activities and does not expect to restart its business.)

    (d) Difficult commute to work due to the removal of a business office.

    (2)
    People whose separation from employment is due to dismissal, etc., including the cause of:

    (a) Simply dismissal (excluding those who have been dismissed for serious grounds attributable to themselves).

    (b) The actual working conditions were significantly different from the employment contracts at the time of signing the contracts.

    (c) Amount exceeding 1/3 of the salary has not been paid by the payment deadline.

    (d) Current salaries paid are less than 85% of past salaries (limited to situations where employees could not predict the drop in salary).

    (e) Overtime work in excess of 45 hours per month in any three consecutive months, 100 hours per month in any single month, or 80 hours per month in any two consecutive months during the six months prior to separation from employment.

    (f) The employer, having been warned by the administrative authorities of the existence of dangers or risks harmful to health in the business place, and has failed to take the necessary measures to prevent the occurrence of such dangers or risks.

    (g) An employer who violates the law by forcing a worker to work during pregnancy, after childbirth, raising children, or caring for a family member, or by taking inappropriate policy measures to keep such a worker employed, or by engaging in behavior that is unfavorable to the interests of the employee on the excuse that the employee has applied for pregnancy, childbirth, or the other rights and privileges.

    (h) Employers did not adequately consider the impact of an adjustment to an employee's work life when reassigning employees to a different position.

    (i) Termination of employment contract after 3 years of consecutive fixed-term contracts.

    (j) When signing a fixed-term labor contract, it is explicitly extended, but the contract is not renewed after the contract has expired.

    (k) Being intentionally ostracized, neglected, or treated with disdain by supervisors and co-workers in a serious manner; or employers failing to take necessary measures to manage the situation after realizing that employees have been subjected to sexual harassment in the workplace, or verbal and behavioral violence in the workplace due to pregnancy, childbirth, childcare leave, or nursing care leave.

    (l) Receiving a direct or indirect termination incentive from the employer (not applicable to employment under the “early retirement incentive system” (in Japanese, “早期退職優遇制度”).

    (m) Closure of business due to employers' own responsibilities for 3 consecutive months.

    (n) Business operations in violation of the law.

  3. Leavers with Specified Reasons

    The range of leavers with specific reasons is as follows:

    (1)
    Those who left their jobs due to the expiration of a fixed-term labor contract that was not renewed ( limited to cases in which the employee wished to renew the contract but was unable to reach an agreement with the employer on the renewal of the contract, excluding the cases mentioned in (h) and (i) in Section 2(2) of this article). The situation where the contract is not renewed is also included in the case where there is an explicit renewal fact such as the clause of “renewal of contract” in the labor contract.
    (2)
    Person who separated from employment with “legitimate reasons”, which include:

    (a)    Physical or mental disability, illness, injury, loss or deterioration of sight or hearing, loss of tactual sensation, etc.

    (b)    Leaving the job due to pregnancy, childbirth, raising children, etc., and having obtained an extension of the period of receipt under the Employment Insurance Act, Article 20, Paragraph 1.

    (c)    Emergency family situations (e.g. parents' death, illness or injury of a parent and forced to leave the job in order to take care of the parent, etc.)

    (d)    It is difficult to continue living apart from a spouse or dependent family member.

    (e)    Inability or difficulty to commute due to:

    (i) Change of address due to marriage.
    (ii) Needs to have their children study in childcare centers or taking care by a relative.
    (iii) Relocated to an address where it is hard to commute to the business place.
    (iv) Forced to relocate to an address or place of residence that does not correspond to their wishes.
    (v) Termination or change of operating hours of transportation agencies such as trains, rails, buses etc.
    (vi) Avoiding separations caused by employers' transfer or reassignment instructions.
    (vii) Avoiding separations caused by spouse’s employers' transfer or reassignment instructions.

    (f)    Responding to the company's call for resignation in the case of restructuring (excluding the situation in Section 2(2)(l) of this article).

  4. Qualified Recipients with Difficulties in Employment

    The range of qualified recipients with difficulties in employment is as follows:

    (1)
    Persons with physical, mental and intellectual disabilities as defined by the Act to Facilitate the Employment of Persons with Disabilities (in Japanese, “障害者の雇用の促進等に関する法律”).
    (2)
    Persons under protection and observation under the Penal Code (in Japanese, “刑法”), Anti-Prostitution Act (in Japanese, “売春防止法”), and Offender Rehabilitation Services Act (in Japanese, “更生保護事業法”).
    (3)
    Residents of the Ainu region (From Sakhalin Island (in Japanese, “樺太島”), to the north of Japan Honshu Island (in Japanese, “本州”))
    (4)
    Persons who hold a “Job Application Pocketbooks for Middle-Aged and Elderly Unemployed Persons”, stipulated by the Act on Employment Security of Elderly Persons.
    (5)
    People aged 35 or above are considered by the head of the Public Employment Security Office as having difficulty in seeking employment.

  5. Prescribed Duration of Benefits

    The number of days payable depends on whether the recipient is a “specific qualified recipient”, “leavers with specified reasons”, or “qualified recipients with difficulties in employment”.

    (1)
    For Specific Qualified Recipient and Part of Leavers with Specified Reasons

    For those who separated from employment with specific reasons in Section 3.1, during the period from March 31, 2009, to March 31, 2025, they will receive the same duration of benefits as the specific qualified recipient. The details are shown on the table below:

    Age

    Duration of being a participant (insured person)

    Less than 1 year

    More than 1 year

    Less than 5 years

    More than 5 Years

    Less than10 Years

    More than 10 Years

    Less than20 Years

    More than 20 Years

    Under 30 years old

    90Days

    90Days

    120Days

    180Days

    /

    30~34 years old

    120Days

    180Days

    210Days

    240Days

    35~44 years old

    150Days

    240Days

    270Days

    45~59 years old

    180Days

    240Days

    270Days

    330Days

    59~64 years old

    150Days

    180Days

    210Days

    240Days


    (2)
    For Qualified Recipients with Difficulties in Employment

    Age

    Duration of being a participant (insured person)

    Less than 1 year

    More than 1 year

    Less than 5 years

    More than 5 Years

    Less than10 Years

    More than 10 Years

    Less than20 Years

    More than 20 Years

    Under 45 years old

    150 Days

    300 Days

    46~64 years old

    360 Days


    (3)
    Persons other than those listed above

    Age

    Duration of being a participant (insured person)

    Less than 1 year

    More than 1 year

    Less than 5 years

    More than 5 Years

    Less than10 Years

    More than 10 Years

    Less than20 Years

    More than 20 Years

    Any

    /

    90 Days

    120 Days

    150 Days


  6. Conditions for Receiving Benefits

    A participant who meets any one of the following criteria after separation from employment will be eligible for benefits.

    (1)
    Persons who have applied for employment at the Public Employment Security Office, showing a positive willingness and ability to work at any time, yet are unable to be employed after the efforts made by them and the Public Employment Security Office, are considered to be in the “unemployment status”. However, the following situations are not considered as “Unemployed Status”:

    (a) Unable to work immediately due to illness or injury.

    (b) Unable to work immediately due to pregnancy, childbirth, or childcare.

    (c) Reaching retirement age and wishes to rest for a while after retirement.

    (d) Unable to work immediately due to family matters (marriage, etc.)

    (2)
    The period of being an insured person is 12 months or more during the 2 years prior to the date of separation from employment. For “specific qualified recipients “and “leavers with specified reasons”, being an insured person for 6 months or more within 1 year prior to the date of separation from employment.

    The above-mentioned period of being an insured person refers to all the periods meet the conditions that a period of one month, counting backwards from the date of separation from employment, in which the number of payroll days or the number of payroll hours in a single period exceeds 11 days, or 80 hours is recorded as one month

  7. Benefits Amount

    Benefits amount per day is called daily amount of the basic allowance (in Japanese, “基本手当日額”), calculated as [total monthly salary received by the participant during the 6 months before the date of separation from employment ÷ 180×benefit rate]. Normally, the payment rate is 50~80%, and 45~80% if the beneficiary is between 60 and 64 years old. In addition, the lower the salary, the higher the payment rate.

    The maximum daily amount of the basic allowance available to insured persons differ in different age ranges, and as of August 1, 2022, the maximum daily amount of the basic allowance is shown in the table below:

    Age

    Maximum Daily Amount of the Basic Allowance

    Less than 30 years old

    6,835 JPY

    30 years old~44 years old

    7,595 JPY

    45 years old~59 years old

    8,355 JPY

    60 years old~64 years old

    7,177 JPY


Kaizen with experienced team of professionals, providing services of company formation, registration, and application for several types of permits/licenses and subsequent maintenance, tax planning and auditing services, please consult our consultants for more details.

Referenced from

1. e-Gov 法令検索 -雇用保険法

2. 厚生労働省 -雇用保険制度


Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

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