Aug 012005

The Japanese system and what it means.

Recently there’s been much discussion here about Japanese Social Insurance, and Pension. Especially for those of us who don’t have it. Under Japanese law, everyone working full time is supposed to pay money into the Insurance and Pension system. Unlike Australia, the system is maintained by the government, and is essentially bankrupt.

In Australia if I earn, for example, $50,000 a year, then my company contributes an extra 9% to my superannuation fund ($4,500 a year) on top of that $50,000. That money goes into a private fund that I have some control over. From the $50,000, I pay a Medicare Levy of 1.5% ($750.) Tax is calculated at a sliding scale, so the rich pay more. So, my total tax would be $11,922. This assume nothing weird like HECS, share dividends, long overseas stays or whatever.

In Japan, the tax is also a sliding scale, but much, much lower. There is a component for National Tax, and for Local Tax. It’s not much overall. About 6% of one’s income on average.

Shakai Hoken is an extra component for both hospital insurance (about 15%) and for the pension (about 85%.) Most Americans don’t like socialised health insurance. They don’t have it, if you get sick in America and you’re poor – well, you die. However, the rest of us understand it. However, it’s a large slab of cash each month from your salary.

However, many of my fellow teachers don’t want Shakai Hoken because they are greedy. The monthly payment is usually about 35,000yen/month on average. Which seems quite high. But they seem to forget that they can get most of the pension portion back when they leave Japan (if they leave within 3 years.) And the health insurance part is quite good. Better than the alternatives.

So, really, those who are whinging about not wanting to pay what they are supposed to pay, by law, seem to be missing the point. Back home, in Australia, I’d be paying the same amount. And I wouldn’t be able to get any of it back, ever. Not with Shakai Hoken.