A welfare ministry expert panel on Monday broadly approved a draft revision to the reduction rate for basic welfare payments, following a Supreme Court ruling that found the government's cuts to welfare benefits unlawful.

The panel calls for lowering livelihood assistance, which is designed to cover food and other basic expenses, by at least 2.49% from the level before the benefits were reduced during 2013-2015, when the government cut them by an average of 6.5%.

The government plans to finalize the benefit amounts by the end of this month based on the panel's proposal.

The plaintiffs had demanded that the reduced amount be paid in full, but the government plans to provide only partial compensation, arguing that full payment would exceed the consumption level of low-income households not receiving welfare benefits.

The total amount of retroactive benefit payments is expected to reach hundreds of billions of yen. The ministry is considering earmarking the necessary funds in its request under a proposed fiscal 2025 supplementary budget.

From 2013 to 2015, the government reduced livelihood assistance in response to deflation in Japan and in a bid to correct the gap between welfare recipients and low-income households without benefits.

Meanwhile, the panel's proposal also includes options to set different benefit amounts for plaintiffs and nonplaintiffs, and to provide the reduced amount in full.

The Supreme Court ruling in June deemed the deflation adjustment illegal, finding that the benefit cuts went beyond the scope of the welfare minister's discretion, thereby voiding the benefit reductions for 2013-2015. However, the top court upheld the distortion adjustment as lawful.