Issues | THE FOREIGN ELEMENT

Unforgiving system leaves family mired in debt

Couple say that advice from local city officials to defer paying health insurance payments left them owing millions and facing asset seizures

Aside from the fact that they are in an international marriage, there is nothing that really makes Taka Hirano and his American wife, Brandy, stand out from the other families in their suburban neighborhood in Wakayama Prefecture. Like most of their friends, they are just doing their best to juggle work and family commitments and keep their heads above water in the current economic climate.

However, the couple have recently found themselves entangled in a stressful battle with the local city office over health insurance payments. Shell-shocked from the events of the past year, they decided to share their story with The Japan Times in order to draw attention to a system that they say has left them feeling like criminals.

Finances have always been quite tight for the family and they are used to living frugally. Taka is some years older than Brandy and his age has meant that employment options are limited. He currently teaches English and does freelance translation and consulting work. Brandy limited her working hours so that she could be home for her children when they were smaller, but now she too works long days as an English teacher.

Paying their health insurance premiums started to become a problem after the birth of their third child. Since neither Taka nor Brandy are salaried employees, they are enrolled under the national health insurance scheme (kokumin kenkō hoken) for the self-employed and their families. Enrollment in one of the country’s health insurance programs is mandatory for all Japanese citizens, as well as foreign nationals on long-term visas.

“I went down to city office to explain the situation and said we couldn’t pay the full amount each month. It was about ¥25,000 per month at that point as I recall,” explains Taka. “They were understanding, and told me, ‘Just pay whenever you can, hopefully monthly,’ and so we were paying ¥5,000 to ¥10,000 each month.”

As the children grew and Brandy was able to work more hours, the family’s financial situation improved and they gradually increased payments. However, the unexpected arrival of their fourth child, now an elementary school student, threw their family finances into confusion again. Around this time, the family’s health premiums suddenly shot up.

“We were shocked when the health insurance bill more than doubled to almost ¥60,000 a month at one point,” Brandy recalls.

The health insurance bills are a complicated mix, based on both the total residence tax paid by the household and the number of insured members. A “nursing care premium” payment is added once a person turns 40. Calculations vary by municipality.

In 2013, the couple were surprised to receive a rather ominous letter from the Health Insurance Division demanding that they pay the amount owed to date in full.

“I went down to see them yet again.” Taka says. “Every time we got a letter of warning or went in for a consultation if we were having problems, we got the same response: Pay what you can.”

Things carried on in this vein until summer last year, when another letter arrived from city office, notifying the Hiranos that because they had failed to pay the amount owed, their case had been handed over to a debt collection agency. A few weeks later a notice came from the agency informing them they had two weeks to pay up in full or their assets could be taken.

Hiroyuki Shimokusu, manager of the Taxation Department at the Hiranos’ local city office, responded to questions with an emailed statement. He explained that there is no set figure at which delinquent payments are handed to the collection agency.

“It varies by municipality,” he wrote. “In addition, the decision is based on a comprehensive review of the case, and not just the amount in arrears.”

In Taka and Brandy’s case, they were presented with a bill for ¥3.4 million.

“Half of this amount was interest!” says Brandy. “We understand that we have a duty to pay the amount we owe, but charging us interest on top of this?”

The couple say the debt collection agency then tried to put the hard word on them.

“They said, ‘Other people manage to pay up. Why can’t you? Borrow the money from your family or friends,’ ” says Brandy. “However, we weren’t prepared to do that. It was our responsibility and we had to figure it out.”

The agency authorized to deal with the Hiranos’ case is known as the Wakayama Local Tax Collection Organization, one of a network of governmental agencies throughout Japan that are charged with following up on delinquent payments.

The situation took a more serious turn in the autumn when a bank called Taka to inform him that the debt collection agency had come in and cleared all the money out of his two accounts.

“We were told this was legal. It had never crossed our minds they could do this,” Brandy says.

“One of the accounts was for paying our bills, while the other was one in which we tried to set aside money for the children. We had been hoping to use that for when our son entered college. It was like they were saying, ‘Go ahead, have kids and try and raise them — but we’ll keep kicking you.’ ”

The couple’s next step was to seek free legal advice for citizens.

“We got some sense of relief when we were told they could not take any money in my wife’s accounts,” Taka explains. “They would only target me, as the head of the household. And if they did come to our house, they would only take my items, not those belonging to Brandy or the kids.”

Considering there were dependent children in the household, the couple asked the lawyer if there was a system in place to safeguard the family’s income. In fact, tax law stipulates that a family must be left with ¥100,000 as subsistence-level income, plus around ¥45,000 for each member of the household. However, this only applies to income earned as salary (kyūryō). For freelancers like Taka, remuneration is generally categorized as “reward” (hōshū) and there is no such provision, making it fair game.

In separate email statements, representatives from both the Wakayama Prefectural Office and the Hiranos’ local city office confirmed the difference in the law based on income type. However, they declined to comment on the fairness of the situation in relation to the Hirano family on the grounds that they could not discuss a citizen’s personal information.

At the beginning of this year the agency approached Taka’s employers, demanding that any income be sent directly to the agency.

“His employers were sympathetic but it was very stressful, with the workplaces wondering how it would affect their businesses. What if they hadn’t wanted to deal with it and refused to give him more work? Our position would have been made even worse!” Brandy says indignantly.

The couple originally shared their story with The Japan Times in mid-June, at which point they hadn’t heard from the collection agency for several months. They were cautiously hopeful that it was end of the matter, but unfortunately, their ordeal was far from over.

Three weeks ago, six employees from the agency suddenly showed up at the Takanos’ home in two vehicles, brandishing a copy of a law that allows entry to a citizen’s home. The agents then proceeded to search the entire house.

“I had been keeping some money in my pajama drawer — money that I had saved up for my children’s school expenses, and the recent kodomoteate (child-raising allowance) money we had received, as well as some rent money my oldest daughter gave us. They took it all, and claimed there is no way to determine whose money it is, and therefore they were able to claim it,” Brandy says.

“Towards the end of the visit, our daughter came home from her part-time job and asked them why they were taking the money she had given us to help pay the bills, and they again said that because money can’t be labeled as to whom it belongs to, they are allowed to take any cash they find.”

The couple now feel as if they are in limbo.

“We can’t put money in my bank account and I hesitate to look for new work in case the debt collection agency harasses a new employer. This has seriously affected our ability to plan for the future,” Taka says.

“We looked at different options,” Brandy adds. “We couldn’t declare bankruptcy for this kind of public debt. At one point, Taka suggested I should just divorce him and take our youngest back to the USA but ultimately we decided to face this together.”

When asked for advice on what citizens in a similar situation can do, Hiroyuki Kunibe of the General Affairs Department at the Wakayama Prefectural Office says, “If you cannot make payments, we advise prompt consultation with your municipal tax department to plan a course of action to resolve the issue.”

Ironically, this is exactly what the Hiranos have been attempting to do all along. Taka and Brandy reiterate that they never tried to get out of paying what they owe and want to do the right thing as citizens.

“I feel that the root of the problem is the current setup of the national health insurance, which uses the same uniform method of calculating premiums regardless of whether citizens are wealthy or poor,” says Taka.

Brandy adds: “If they could have forgiven us the interest and worked with us, we could have negotiated a payment plan. We can’t pay anything right now.

“I feel like I’ve lost the will to move forward. Knowing that government tipped our lives into disarray like this — it destroys something within you.”

Names have been changed to protect the family’s privacy. Your comments and story ideas: comunity@japantimes.co.jp

Where to go for help

According to figures released in January by the Ministry of Health, Labor and Welfare, some 3.6 million households nationwide, or about 17 percent of the total, fell behind in health insurance payments at some stage last year. Of these, 260,000 (7.2 percent) were subject to seizure of assets, like the Hiranos were, suggesting that it’s a fairly common occurrence.

A spokesperson from the Japan Federation of Labor and Social Security Attorneys Association suggests that foreign residents who find themselves unable to pay their health insurance premiums should first speak with their local city office.

“It may, however, be difficult for the average person to know where to turn,” the spokesperson said. “In this case, the best thing might be to consult with an expert on labor and social insurance laws (sharōshi).”

The federation’s website (Japanese): www.shakaihokenroumushi.jp

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