25/04 Need-based welfare reforms eyed

The Yomiuri Shimbun

The Health, Labor and Welfare Ministry is drafting a social security reform plan that would cap out-of-pocket medical, nursing care and child care payments by low-income earners, according to government sources.

Another main pillar of the plan would curb pension benefits paid to members of high-income groups.

The reforms seek to ensure the social security system is based on the three principles of a sense of security, mutual aid and fairness, the sources said.

After coordinating opinions with the ruling Democratic Party of Japan, the ministry aims to submit a final plan to a government social security reform panel chaired by Prime Minister Naoto Kan, as soon as early May.

The draft plan stipulates that the government will consider adopting a package of comprehensive measures to reduce out-of-pocket expenses for low-income earners who receive medical and nursing care services.

One measure being considered is a refund system under which any amount exceeding new caps on out-of-pocket payments made to hospitals by low income-earners would be returned. Public funds would be used to pay the difference.

Because each household's income would have to be tracked under the system, a precondition for its introduction is establishment of a common ID numbering system for social security and taxation, which is to be introduced in January 2015.

The ministry's draft calls for the postponement of the DPJ's pension reform plans. The DPJ has proposed integrating national, employees' and mutual pension schemes into one scheme that would guarantee a minimum pension to all people.

The ministry said a postponement of the plan is necessary because it will take time to gain a public consensus, introduce the common ID numbering system and create a national revenue agency.

The ministry said pension reforms would be handled under the current systems for the time being.

Under the reforms, the employees' pension scheme would also cover part-time workers, temp staff and other types of nonregular contract workers.

The ministry also plans to integrate employees' and mutual pension schemes to beef up public pension schemes' functions. It aims to guarantee minimum postretirement income and eliminate current problems of being unable to receive any pension or pensions that are too small.

The ministry says in its draft plan that people should shoulder burdens in accordance with their financial capabilities. In this vein, it aims to cap pension payouts to wealthy people to secure sustainability of the public pension system.

The ministry aims to implement each of the reform measures between 2015 and 2025, when the nation's first postwar babyboomers become elderly, the sources said.

(Apr. 25, 2011)