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How will a social security system that can be trusted by all generations in the face of the low birth rate and aging population be constructed? A concrete image of reform needs to be shown, including having discussions on increasing the burden on the people.
The government has compiled an interim report at a meeting tasked with building a social security system for all generations. It plans to reflect the report in the Basic Policy on Economic and Fiscal Management and Reform to further deepen relevant discussions.
Around 2040, the population of elderly people is expected to peak at more than 39 million, and social security costs, including pensions and medical care, will likely increase significantly.
In 2040, however, the population of working-age people, which supports the social security system, is estimated to decrease from the current 75 million to 60 million or less.
Many people may feel uneasy about the future of the social security system. It is necessary to improve its sustainability by reviewing the state of pension benefits and the burden, such as by appropriately reducing benefit levels and increasing the burden on high-income elderly people.
The report stressed that “supporting the child-rearing generation and young people is an urgent task.” Noting the circumstances where young people are forced to choose between either work or child-rearing, the report called for creating an environment in which anyone can use childcare leave and shorter working hours among other measures to support their work-life balance.
Even though these measures are available, in reality, their use has not seen an increase among male employees and non-regular workers. It is important to take further steps on how to improve the situation.
Regarding the elderly, it is inevitable to implement reforms that would require able people to shoulder their fair share of the burden, such as by increasing the amount of their out-of-pocket medical expenses, depending on their income. Curbing pension, medical and nursing care benefits is also an urgent task. However, the report did not specify concrete measures relevant to this matter.
If the government is avoiding discussions on reforms that would be painful for the people in the run-up to the House of Councillors election in July, it is merely postponing the issue.
The report also called for strengthening efforts to realize insurance coverage for all workers, a policy advocated by Prime Minister Fumio Kishida.
For people who work shortened hours such as part-timers, mainly those working at companies with at least 501 employees are eligible for the employees’ pension and health insurance systems.
It has been decided that the company size requirements will be lowered in stages, but it is still commendable that the report has asked the government to consider completely abolishing the requirements. This should be steadily implemented after gaining the understanding of the companies, who will be paying the premiums. Increasing the number of people who can support the systems will strengthen the foundation of public finances for insurance.
Social security coverage for freelance workers is also an important issue. The employer’s part of the insurance premium burden will become a problem, but the entity that orders the work should have the same level of responsibility as an employer. It is hoped that the government will further study how to design systems that meet increasingly diverse work styles.
