Japan Govt, Ruling Bloc Set Income Cap for Benefit Program

Jiji Press

November 10, 2021

Tokyo, Nov. 10 (Jiji Press)—Japan’s government and ruling coalition decided Wednesday to introduce an annual household income cap for a 100,000-yen benefit program for people aged 18 or under, planned as a centerpiece of an envisaged economic stimulus package.

The Liberal Democratic Party proposed the income limit, which was accepted by its coalition partner, Komeito. The decision was made at a meeting between Prime Minister Fumio Kishida, who doubles as LDP president, and Komeito chief Natsuo Yamaguchi.

A family comprising parents and two children will be ineligible for the benefits if its annual income totals ¥9.6 million or more. For a family with both parents working, decisions on the benefits will be based on the income level of the higher-earning parent.

The agreed cap is intended to fend off criticism of pork-barrel spending and wealthy people getting the benefits as well. Komeito had demanded that the benefits be paid without a household income cap.

Yamaguchi told reporters after the meeting that about 90 pct of families with children aged up to 18 in Japan will be eligible for the benefits if the income threshold is set at ¥9.6 million.

Of the 100,000-yen benefits, ¥50,000 in cash will be given per child by the end of this year. The other ¥50,000 will be distributed in the form of shopping vouchers by next spring on condition that these are used for goods and services related to child raising.

LDP Secretary-General Toshimitsu Motegi said that the cash portion will be distributed swiftly using the state’s reserve funds.

Also as part of the economic package, partly aimed at cushioning the fallout of the novel coronavirus crisis, the government will provide reward points worth up to ¥20,000 in three stages to new holders of the My Number social security and taxation identification card.

Specifically, points worth 25 pct of the value of cashless shopping will be granted per holder, with a limit of ¥5,000. People who register their My Number cards as health insurance cards will receive additional points worth ¥7,500, and if they link their cards with their deposit accounts, they will be given more points, worth ¥7,500.

Komeito initially called for giving points worth ¥30,000, but it backed down on the proposal.

The LDP and Komeito have already agreed to grant ¥100,000 in cash to poor households that are exempted from residential tax payments.

The government is slated to finalize the economic package Nov. 19.