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Pension reforms target women
Daily Yomiuri, May 21, 2003
Japan - The Health, Labor and Welfare Ministry is currently debating ways to reform part of the national pension system in which full-time homemakers can receive pension payments without having paid premiums.
As the pension program is facing financial difficulties, there is growing public concern that it is unfair for full-time homemakers to receive basic pensions as they have not contributed to the pension fund through premium payments.
The ministry is to propose four revision plans and draw a conclusion by the end of this year. But analysts expect the ministry will face difficulties in coordinating the revisions as a possible change in the pension system may affect women's future plans.
Among three categories of those insured under the government's basic pension system, full-time homemakers at households of salaried workers are categorized as Type III subscribers. Housewives with part-time jobs who earn less than 1.3 million yen are also included in Type III and are exempted from paying pension contributions.
The ministry asked the Social Security Council's pension fund committee, headed by Waseda University Prof. Hiroshi Miyajima, to study the four revised plans at a meeting on May 13.
Among the four revised proposals are plans to entitle both husbands and wives to receive half of the combined total payments allowable under the current system; to require housewives to pay pension premiums; to reduce the amount of benefits of basic pensions from housewives who do not pay premiums; and to reduce the number in the Type III category.
Under the proposal to divide pension benefits between husbands and wives, the premiums are regarded as being paid in by them equally.
This plan is expected to satisfy homemakers who claim it is necessary to take into consideration household management duties and full-time child-raising responsibilities. The revision is also expected to allay the concerns of divorced women who are worried that they are not entitled to receive benefits under their former husbands' pensions.
The system will, therefore, neither require housewives to pay pension contributions nor decrease their benefits, and is expected to be widely supported.
Contrary to the ministry's expectation, however, the plan provoked heated debate within the council's committee. "The proposal does not resolve the sense of unfairness as full-time housewives are still able to receive pensions without having paid pension contributions, NTT DoCoMo Inc.'s branch manager Akiko Ide said.
Other council's members pointed out that the system allowed full-time homemakers to receive larger pensions than homemakers who work on a part-time basis and contribute to the employee's pension scheme.
"Whenever there is a disincentive for homemakers to work, the number of full-time homemakers increases," Japan Research Institute Ltd. researcher Yuri Okina said.
Meanwhile, the second and third proposals--requiring full-time homemakers to pay pension premiums, or reduce basic pension benefits--are aimed at addressing the disparity.
The second plan requires full-time housewives to pay half the amount of national pension premiums that self-employed individuals pay--which is currently 13,300 yen a month.
Sophia University Prof. Katsuhiro Hori, however, deemed the proposal unfair as pension premiums for double-income families would be higher than those of single-income families.
The third proposal suggests a reduction in the amount of basic pension benefits of full-time homemakers from the current 66,000 yen per month to 33,000 yen or 22,000 yen.
However, such a proposal is certain to provoke a backlash among women who are concerned about their lives in their twilight years.
"I see many problems in the system when considering the role of public pension," said Shigeru Ojima, the head of the welfare department of the Japanese Trade Union Confederation (Rengo).
The plan to reduce benefits is expected to increase the number of part-time workers contributing to the pension fund, which will decrease the number of people eligible in the Type III category.
The ministry presented a proposal in April to require part-time employees who work more than 20 hours a week to enroll in a corporate employee pension plan to expand the range of subscribers to such plans. Currently part-time employees who work more than 30 hours per week are required to enroll in the national pension plan.
But there are strong oppositions in financial circles over this proposal. "This will increase the labor budget and could cause a hiring slowdown," Japan Business Federation executive Hironori Yano said.
Type III category problems are linked to the employment of females and lifestyle changes.
The issue raises several areas of contention, such as between females working at enterprises and full-time homemakers, or between males who mainly pay pension premiums and women who do not.
Most homemakers favor the system of dividing the right to receive pensions between spouses, as their premiums and benefits do not change, and it recognizes their contribution to household affairs.