The Social Security Council, an advisory body for the health and welfare minister, has issued an interim report on reform of the nation’s pension system, on the assumption that pensions, in principle, will be paid out of social insurance funds. The main pillars of the eight-point report are proposals aimed at helping low-income people.
The council members felt a sense of crisis over a decline in people’s trust in the pension system, especially due to the pension-records fiasco. They thought, quite reasonably, that to restore trust, it was indispensable to strengthen supportive measures for low-income people and pensioners.
Their thinking is embodied in two proposals. The council calls for reducing pension premiums paid by low-income people and using public money to make up the shortfall. This proposal would enable low-income people to pay premiums in accordance with their income levels and in the end, receive the full basic pension.
The council also proposed providing additional money to low-income pensioners, especially single pensioners. The second proposal is based on findings by the health and welfare ministry. While a married pensioner couple receives the basic pension of ¥132,000 a month, enough to cover basic needs, a single pensioner, whose basic pension is ¥66,000, can experience difficulty making ends meet.
The problem with these proposals is that each measure will require quite a lot of money — about ¥1 trillion each year, according to experts. There is also another problem with the second proposal. Providing additional money to a person whose pension is low may result in giving preferential treatment to some individuals who have failed to pay premiums in full and punishing those who have paid premiums in full. Well-informed public discussions should be held on these two proposals.
The government should promptly carry out other proposals that do not require additional funds, such as shortening the mandatory premiums payment period and covering part-time workers under kosei nenkin, a pension system for company employees.
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