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Wednesday, July 11, 2012

25% on pension plan lack income

Staff writer

About one out of four participants in the government-run basic pension program had no income in 2009, underlining the growing number of poor households among people of working age, according to a survey by the Health, Labor and Welfare Ministry.

Including those with no income, 38 percent earned less than ¥500,000 and 54.7 percent took in less than ¥1 million in 2009, according to the survey released Monday. Many of the holders are believed to have applied for pension premium exemptions.

The basic pension program is mainly for people who are not eligible to be covered by the public pension systems for corporate and government workers. They are mainly students, the self-employed and part-time workers.

As of March 2011, some 19 million people were covered by the basic pension program.

The survey, conducted on about 60,000 households between November 2010 and February 2011, was the first on the annual incomes of both public pension policyholders paying premiums and pensioners receiving benefits.

The survey found that many of the people paying premiums are poorer than the older pensioners whom they now support.

The average annual income of the basic pension policyholders was ¥1.59 million in 2009, compared with the ¥1.89 million average income of all public pensioners, including those of public pension systems for corporate and government workers.

The monthly premium this year for the basic pension is ¥14,980. Those who have difficulty paying can be exempted from some or all of the premiums in accordance with their incomes. The downside is that the benefits they can receive in the future will be reduced.

According to another report by the welfare ministry, the percentage of people who paid basic pension premiums in fiscal 2011 hit a record low 58.6 percent. About 64 percent of the nonpayers said the premium was too high to afford, the ministry said.

Of all people insured under the basic pension, part-time workers accounted for 16.6 percent in 1999 and increased to 26.1 percent by 2008.

Self-employed participants declined from 22.6 percent in 1999 to 15.6 percent in 2008, the ministry said.

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The Japan Times

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