More than a year after a consumption tax increase tipped Japan into a recession, efforts to clamp down on soaring pension payments are suppressing a recovery in consumer spending.
The problem highlights how difficult it has been for Prime Minister Shinzo Abe to generate a sustained economic rebound for an economy with an aging and shrinking population — amid efforts to rein in a world-record debt load.
Welfare payments have become an increasingly important part of people's incomes and pensions comprise about 80 percent of cash social security benefits in Japan.