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Pension ‘gap years’ and missed payments

by Ashley Thompson

Responding to our April 19 column (“Japan pension answers often case-specific”), KW suggests that there are further conditions — aside from the special exemptions we mentioned — under which foreigners may be able to receive a pension without paying in for 25 years.

One option he mentions is kara kikan. The “empty time” referred to here would be a period working and living outside Japan during which an individual did not pay into the Japanese state pension fund. Under kara kikan, that person could count these “gap years” towards the required 25 years needed to start drawing their pension.

When we spoke with the pension office about reader JM’s case for the April 19 article, they did not mention kara kikan as an option, so we called again to ask about it and when it might apply. Their official answer: Kara kikan no longer exists, except for Japanese citizens and permanent residents in very specific cases.

Upon further research, we found that kara kikan initially applied to foreigners living and working in Japan between 1964 (when the state pension was established) and 1981, as non-Japanese were not allowed to pay into the Japanese pension system during this period — period. When they became eligible to enroll from 1982, kara kikan allowed those foreigners to count their previous years toiling in Japan towards the 25 years required before they could start drawing premiums.

Kara kikan also applied in a few other instances, such as for Japanese citizens living and working overseas between 1981 and 1986, when they weren’t required to pay into the pension fund while abroad. After 1986 this law changed, and kara kikan no longer applied, unless a citizen working overseas no longer held a registered address within Japan.

This rule still generally applies today for Japanese citizens and permanent residents, although other specific requirements must be met for kara kikan to apply.

So, in summary, kara kikan may or may not apply in JM’s case, but we do not have enough information about his circumstances to make that call.

However, this is where reciprocal social security country agreements come in. Japan has different agreements with certain countries that allow residents who work abroad to still qualify for a pension in Japan (or the other country, depending on their nationality and time abroad, among other factors) and not pay into both countries’ social security programs at the same time. The rules vary for each country agreement, as I mentioned in the April 19 article, so it would be best to contact your country’s embassy and/or a local pension office in Japan for more specific information. According to the Japan Pension Service website, the government currently has agreements with Australia, Belgium, Canada, the Czech Republic, Germany, France, Ireland, the Netherlands, South Korea, Spain, the United Kingdom and the United States.

KW also mentioned an option that may apply if you’ve missed some pension payments. If you miss a payment and have not applied for an exemption from pension contributions, you are entitled to a two-year grace period to make the missed payment. However, this also would not have applied in JM’s case, as more than two years had passed since his “missed” payments (there’s a greater possibility instead that a country agreement may apply in his case).

One final note regarding the pension system in Japan and information via the Social Insurance Agency website: In the wake of the scandal over lost pension records, the Social Insurance Agency in Japan was abolished and replaced with the Japan Pension Service in January 2010. While most pension laws are likely still the same, when looking up information online via the Social Insurance Agency’s website (which is still online), you’ll want to confirm the validity of the information with the Japan Pension Service or your country’s social security office as applicable. Or, safer still, avoid the SIA website altogether.

Finally, if you have very specific pension questions, the best way to understand your options is to visit your local pension office with your pension book. If you don’t speak Japanese, bring along a friend or someone who can help translate. As the pension office confirmed, employees at the local pension office will best be able to help and determine your options by examining the information in your pension book and hearing your specific case.

To locate the nearest pension office, visit www.nenkin.go.jp/office/map4.html.

Thanks to David Thompson for his research assistance. Ashley Thompson writes survival tips and unique how-tos about living in Japan at www.survivingnjapan.com. Send all your questions to lifelines@japantimes.co.jp