Academic journal article Social Security Bulletin

Permanent Disability Social Insurance Programs in Japan

Academic journal article Social Security Bulletin

Permanent Disability Social Insurance Programs in Japan

Article excerpt

This article examines Japan's permanent disability social insurance programs. Because there is limited information available about these programs in the literature outside Japan, this analysis helps to further international disability research. Primary public pension systems and their corresponding programs for permanently disabled workers and their families are described, including trends in the number of beneficiaries and benefit expenditures. Importantly, the article analyzes the determination and appeals processes in Japan for claiming permanent social insurance disability pensions.

The study also references the Social Security Disability Insurance program operating in the United States and offers comparisons with the system in Japan, which provides insights about operational procedures to researchers and policymakers in both countries. Permanent disability programs in Japan and the United States share similar characteristics, including aspects of their benefit determination and appeals procedures. However, these country program experiences diverge markedly in several areas, making the comparison worthwhile from a policy perspective.

Introduction

Social insurance permanent disability programs cover over 70 million workers and their dependents from loss of income that is due to accident or illness. These contributory programs serve the permanently disabled population in Japan. Although similar in some respects to the U.S. Social Security Disability Insurance (DI) program, public pension provisions covering the permanently disabled population in Japan and the United States differ significantly in many ways, including eligibility rules, benefit calculation, claims and appeals procedures, and access to short-term disability benefits. These differences span two disability insurance systems that share a common social insurance design. Notwithstanding the common design, data analyzed in this article show that these systems yield quite different outcomes relative to recipiency, claims, appeals, and benefit expenditures.

The primary objective of this study is to examine the experience of Japan's permanent disability programs. There is very little information available about these programs in the disability literature outside Japan, so this research serves to further international disability research. From a U.S. policy perspective, some commentators have noted that much can be learned from cross-national analyses of disability systems in other developed countries (Social Security Advisory Board 1997; U.S. General Accounting Office 2001). Although the focus resides primarily with permanent disability programs in Japan, the article refers to the disability system operating in the United States with the expectation that comparisons with the Japanese system can provide insights about operational procedures to researchers and policymakers in both countries. Such differences cannot be fully understood without reference to sociopolitical factors-which are beyond the scope of this study. However, evidence in this article indicates that certain factors may help to explain some distinctions between disability systems in the United States and Japan.

This article:

* Describes the two primary public pension systems in Japan and their corresponding programs serving permanently disabled workers and their families;

* Outlines trends in the number of Japanese disability program beneficiaries and benefit expenditures;

* Examines the determination and appeals processes in Japan for claiming permanent social insurance disability pensions; and

* Compares permanent disability pension procedures in Japan with the DI program under Social Security in the United States in order to highlight potential lessons for U.S. policy.

Pension Provision under Social Insurance in Japan

Pension benefits under social insurance are provided by a two-tier system in Japan. Any resident in Japan who is aged 20-59, including non-Japanese nationals, is required to enroll in the National Pension (NP) program, which provides flat-rate basic pension benefits and collects flat-rate contributions from the self-employed and nonworking spouses and students. …

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