An advisory panel to Prime Minister Yoshiro Mori wants rich elderly people to contribute to social security again to contain the rise in costs being paid by working people, the panel’s final report says.
The panel of social security experts, led by Keimei Kaizuka, a professor at Chuo University, was tasked with revamping a social security system that will have to serve a rapidly aging population amid a declining birthrate. The report is expected to be submitted to Mori by the end of next week.
While an overall rise in social security costs is inevitable, the report says the burden assigned to the working population should be kept as light as possible while maintaining the current system of premium payments.
The report’s three major recommendations are:
* Increase the number of contributors to the national social security system.
* Spread the financial burden from working people to retirees.
* Conduct a review of benefit payments.
To make rich elderly retirees contribute again, the report suggests taxing their pension income.
It also recommends introducing a “reverse mortgage system,” in which elderly people would be able to take out loans by putting up their assets as collateral. The loans would be repaid by selling the assets after they die, assuming the assets have not been bequeathed to other parties.
The national insurance premiums are used to fund pensions, health care programs and employment benefits. The age at which one can receive pension payments is 60.
However, the panel members failed to reach agreement on such controversial issues as lowering pension benefits and reforming the elderly health-care system.
The report also fails to provide specific proposals on funding social security programs, although it indicates the government will have to raise its level of contribution.
In addition, scant mention was made of how to increase the government’s contribution to the basic portion of the pension plan. The government’s contribution is scheduled to rise from the current one-third to half by 2004.
The panel apparently prefers to continue relying on insurance premiums rather than consumption tax revenues to fund the social security system.
As a way to increase the number of contributors to social security, the panel said an environment must be created to employ more female, elderly and disabled workers.
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