The government should cover out-of-pocket childbirth fees, an expert panel said, as Japan seeks to reverse its declining population and shrinking pool of tax-paying workers.

The government should "design a specific system by around fiscal 2026 to make standard childbirth expenses free of charge,” according to a proposal adopted on Wednesday by an expert panel tasked with investigating how to ease the financial burden of giving birth.

Following the proposal, the health ministry will look into how to realize such a system, according to public broadcaster NHK. Officials at the ministry weren’t immediately available for comment.

Childbirth isn’t covered by national health insurance in Japan. The government gives a subsidy of up to ¥500,000 ($3,402) to women giving birth, but those outlays didn’t cover the full cost in about 45% of cases, according to data collected from May 2023 to September 2024.

While the cost of giving birth can vary, it averaged about ¥518,000 in the first half of 2024, up from around ¥417,000 in 2012, the panel said, citing data provided by the health ministry.

The proposal follows a child care policy package adopted in 2023 to reverse Japan’s declining birthrate by supporting families with young children and helping to boost their finances.

Births in Japan reached a record low in 2024, a worrying sign for the government as it tries to fund increasing social security costs for an aging population with a shrinking cohort of taxpayers and less tax revenue.

The number of newborns fell to 720,988 last year, reaching a historical low in records going back to 1899 and extending a nine-year streak of declines, according to the health ministry.