Purpose of Funding Child Allowance and Parental Leave Benefits
Included in Health Insurance Premiums for Those Under 74 Years Old in 2 Years
The Japanese government has announced plans to levy a tax of around 500 yen (approximately 4,500 won) per person per month starting in 2026 to secure funding for low birthrate countermeasures.
On the 18th, NHK and others reported that the Japanese government has decided on a cabinet resolution for the "Amendment to the Child and Childcare Support Act," which includes measures to address the low birthrate. For this bill to be enacted, it must first pass parliamentary review. Through this amendment, the government plans to expand the eligibility for child allowances to include high school students and remove income restrictions for parents. The allowance amount will increase starting from the third child, and if parents take childcare leave due to childbirth, the leave pay will be raised to compensate 100% of the actual received amount for a certain period, among various other support measures to actively encourage childbirth.
The issue lies in securing the funding. It is estimated that about 3.6 trillion yen (approximately 320 trillion won) will be needed by 2028 to implement these plans. The Japanese government intends to cover the funding by introducing a "Child and Childcare Support Fund" tax of less than 500 yen per medical insurance subscriber starting in 2026. Prime Minister Fumio Kishida stated, "The amount collected by 2028 is expected to be less than 500 yen per subscriber per month (for public medical insurance)," and added, "Collection will begin gradually from April 2026."
The government announced that all citizens, including elderly people up to 74 years old, will be charged 500 yen monthly as a low birthrate support fee included in their medical insurance premiums. Opposition parties and the Japanese public have protested this as an "unjustified tax increase." While Prime Minister Kishida insists that there will be no real additional burden due to wage increases and expenditure reforms and that this is not a tax hike, opposition parties resist, calling it a "childcare tax that demands a burden from the people," making the bill's passage difficult.
Public opinion is also negative. NHK surveyed 1,215 adults aged 18 and over nationwide, asking whether a monthly low birthrate tax of 500 yen is appropriate. The results showed 20% said "appropriate," while 31% said "inappropriate," with "inappropriate" prevailing. Additionally, 33% opposed the support fund system (tax collection) itself regardless of the amount. Some netizens have also protested, saying, "If they openly declare it as a tax and collect it, public backlash will be strong, so the trick of adding it to medical insurance premiums is obvious." As a result, the hashtag '#500yenTaxIncrease' trended in real-time on social media at one point.
Japan's total fertility rate two years ago was 1.26, higher than South Korea's 0.78.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
