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The government and the ruling coalition adopted a proposal Friday for reforming the social security system, covering pension and medical insurance and centering on having well-off elderly people shoulder a greater burden of social security costs.

The outline stipulates, “People capable of shouldering the burden will share the burden evenly regardless of their age.”

The government and the ruling camp — the Liberal Democratic Party, New Komeito and the New Conservative Party — will soon set up a task force to discuss details of the reform, with the intention of putting the measures into effect in fiscal 2002.

Prime Minister Yoshiro Mori told Friday’s meeting, “Difficulties will accompany the reform process, but we must carry out reform that is truly necessary.”

It is not certain that the reform proposals will be approved without a hitch because the Japan Medical Association, a nationwide doctor group and a major support group for the LDP, has objected to increasing the financial burden on elderly people.

The outline says the medical insurance system will require elderly people to shoulder a burden in accordance with their ability to pay.

It also states that payments to elderly people from the pension system will be reviewed based on those individuals’ economic potential.

The draft suggests the government may increase the tax on pension income. Currently, income tax is not generally imposed on the pension income of elderly people. It also says the government should increase pension premiums at an early date. The proposal, however, is cautious about using more public funds for the financially strained social security system.

The government’s National Institute of Population and Social Security Research said in December that the state paid out more than 72.1 trillion yen for the social security system in fiscal 1998, up 3.9 percent from a year earlier and topping 70 trillion yen for the first time.

Allowances for the elderly, including pensions and medical payments, came to 47.8 trillion yen, up 5.9 percent.

Of the social security spending, 32.1 percent was covered by contributions collected from companies and associations of civil servants, 29.5 percent by social security contributions of company employees, the self-employed and public-sector workers, and 24.6 percent financed by the central and local governments.

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