Terrie's Take 534 -- Social Insurance/Visa Controversy, ebiz news from Japan

Mon Sep 21 10:21:20 JST 2009

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, September 20, 2009 Issue No. 534

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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+++ WHAT'S NEW

A revision to the immigration law passed in the Diet
earlier this year has caused the Ministry of Justice to
instruct the Immigration Bureau to start checking that
foreigner residents in Japan are enrolled in one of the
nation's health insurance programs. Although not stated
explicitly, the implication is that those without such
enrollment may be denied a visa renewal. This will start
happening from April 1st, 2010 and has a lot of foreigners
concerned.

The reason for this concern is that although all residents
of Japan, including foreigners, are supposed to be enrolled
in one of the health insurance programs, and indeed,
in one of the overall social insurance programs, the
reality is that many people are not. Most such people are
typically either self-employed, contractors, students,
part-timers, unemployed people between jobs, or housewives
(i.e., all outside the regular employee situation).

We have been following the various media and chat boards
about the topic, and the conversations seem to follow three
main threads: that the Japanese insurance program is
unwanted and unfair to foreigners, that it is
discriminatory vis-a-vis Japanese non-payers, and that come
April 1st, what can people do about it?

We try to answer some of these questions below.

[Continued below...]

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[...Article continues]

Most of us know the health insurance program through a
collective social insurance package that most private
companies are enrolled in, called Shakai Hoken. This refers
to health (kenko hoken), pension (kosei nenkin),
unemployment (koyo hoken), and nursing (kaigo hoken -- for
those over 40) insurances. Effectively for most of us,
these insurances function as a 16% tax, and result in us
getting that much less in our take-home pay packets every
month. Our employers also pay out the same 16% to the
government as their contribution.

Thus, for those of us on lower-to-medium salaries (say,
JPY300,000 a month), while you may think you're only paying
out 20% or so for your payroll taxes (being 10%-12% average
for national tax and 10% or so for your local inhabitance
tax), in actual fact the real number is more like 38%. If
you're in the higher tax brackets, then this number goes
much higher -- into the 45%+ range.

As many readers will know, there are four main social
insurance programs of which health insurance is part: the
Shakai Hoken program which most private companies are
subscribed to, the Kokumin Hoken program, which is for
people not in regular employment or who are self-employed,
private insurance programs which are run by a few major
Japanese conglomerates, and a government employee program.
For most of us, getting a visa renewal will mean being
enrolled in either the Shakai Hoken or Kokumin Hoken
programs.

Come April 1st next year, what can you do if you are not
currently a contributor to social insurance? We contacted
the Immigration Bureau to ask this question, and from what
we can tell, they themselves have not yet settled on a
policy of how to handle non-compliant people. They did say
that they will only be checking for health insurance
certificates, not pension and other insurances. So we
suppose that the simplest answer is to go get yourself
enrolled now in the Kokumin Kenko Hoken program. However,
since there are a number of exemption categories for kenko
hoken (working in a company of less than 5 people, for
example), we suppose it might be possible to present
yourself as being an exempt person, with, we think, some
chance of being able to convince the interviewing officer
that your visa should be renewed.

But is it really worth all the risk and hassle?

So how is it that people have been allowed to get away with
not paying in health and other social welfare taxes until
now? There doesn't seem to be an official reason, however,
we believe it is because the government for the longest
time held that the social insurance package was NOT a tax
but rather a benefit, which is why it has not been
administrated by the National Tax Agency. This duality of
positioning caused the Social Insurance Agency (SIA) to be
run differently, and unlike the Tax Agency, has for many
decades decided for itself whether to make people pay or
not. As we all know, this has changed over the last 5
years, as it came to light that the SIA not only let people
off having to pay, but also themselves lost 50MM or so
contributor records.

It seems that the new government position is that the SIA
once it has been reorganized into a new agency next year,
will function more like the National Tax Agency. Indeed,
we think that within 5-10 years, the two will be merged,
and then the Japanese public will be faced with the reality
that Social Insurance really is a tax, not just a pretend
one.

So you're stuck with having to pay at least something. The
good news is that if you're self-employed, a contractor,
or a student, you can pay directly to the government, and
the rates are not all that unreasonable -- certainly the
overall cost of social insurance is significantly cheaper
than if you're a regular salaryperson. As a general guide:
* Kokumin Nenkin (National Pension) -- JPY14,660/month
currently
* Kokumin Kenko Hoken (National Health Insurance) --
roughly about 9%. Actual premium is based on your previous
year’s taxable income and number of dependents. Annual
premiums range up to JPY530,000/year (JPY44,166/month)
* Kaigo Hoken -- only paid by those over 40. Levied as
portion of previous year's taxable income, up to
JPY90,000/year

Lastly, is the threat of withholding a foreigner's visa
renewal if they don't pay their social insurance fair? Our
guess is that this point may eventually be taken to court
by someone caught by the new rule. It is clear that Social
Insurance is NOT a tax yet, and in June this year the
Nikkei ran an article saying that the Social Insurance
Agency had a contributor compliance rate for Japanese
citizens for National Pension of just 62.1% (no word on the
health rate) -- so obviously there are plenty of Japanese
not paying in to the system. Yet, we don't hear of anyone
being punished for that. In fact, just the opposite, the
Agency allows people who are on low wages to only pay a
portion of their obligations, and so the real non-full
compliance rate for social insurance is just 45.6%!

Bad luck if you're a foreigner... you don't get to choose.

**************

For over 20 years we have watched the good works of The
Japan Helpline, run by Ken Joseph. Always there 24 hours a
day, 365 days a year, they have been there for the
International Community with help ranging from emergency
assistance to help with day to day problems.

Ken regularly copies us on the many appeals they get from
foreigners all over the country, having personal crises and
begging for help. Ken selflessly responds to each person
and works through their problems -- seeing the police,
talking to immigration, landlords, and embassies, arranging
repatriation of coffins and belongings, and much more
besides.

It's a thankless task, and recently with the financial
crisis the donations to The Japan Helpline have fallen
dramatically. In times like these when things are tough, we
need The Japan Helpline even more. But they rely 100% on
private donations to keep going.

So we appeal to our readers to join us in being one of
their "One Hundred Club" members. If just 100 people sign
up to give 3,000 yen per month to Ken's team, they will be
able to cover their costs.

To donate:
https://www.lincmedia.co.jp/jhelp?lang=en
Your support keeps The Japan Helpline going.

...The information janitors/

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+++ NEWS

- Carlyle consortium buys major office building
- Number of centenarians jumps 10%
- Chinese firm buys photovoltaic maker
- Solar-powered apartments

-> Carlyle consortium buys major office building

The commercial real estate market appears to be suffering
a crisis, with buildings that are providing perfectly good
yields being placed on the market at large discounts due
to their owners being over-leveraged. As a result,
commercial property prices fell 8.9% in Tokyo last year.
One such case is the 10-story KDX Toyosu Grandsquare in
Shiodome, which has just been purchased by U.S. fund
Carlyle in collaboration with the South Korean National
Pension Service fund. The large 50,000 sq. m. building is
believed to have been sold for JPY35bn, well below its
normal market value. ***Ed: Realtors fear that another
1.5MM sq. m. of prime new office space coming on the market
over the next 24 months will cause a glut next year and
hurt valuations even further.**
(Source: TT commentary from nikkei.co.jp, Sep 18, 2009)

http://www.nni.nikkei.co.jp/e/fr/tnks/Nni20090918D18HH216.htm

-> Number of centenarians jumps 10%

They'd better stop being so darned healthy, because the
population of Japanese aged 100 or more rose by a
surprising 10% last year, to 40,399 people. Apparently 87%
of the oldsters are women. Interestingly, Japan does not
top the world for centenarians, that honor goes to the USA,
which has 96,000 really, really old people. (Source: TT
commentary from reuters.com, Sep 11, 2009)

http://www.reuters.com/article/latestCrisis/idUSSP443665

-> Chinese firm buys photovoltaic maker

Shenyang, China-based power generation systems company,
A-Power, has signed an agreement to purchase 100% of
Kyoto-based thin-film photovoltaic (PV) maker, Evatech,
for US49.9MM in cash. The transaction will close in
November this year. Evatech has developed a low-cost,
high-efficiency thin-film technology to make PV glass
curtain walls. ***Ed: Makes us wonder why they weren't
snapped up by a U.S. or European firm.** (Source: TT
commentary from rttnews.com, Sep 16, 2009)

http://tinyurl.com/njdnv2

-> Solar-powered apartments

Sekisui House says it will start selling apartments fitted
with solar cell systems from next month. The firm is
planning to piggyback on changing government legislation,
which will require power companies to pay JPY48 per kW/hr
for sustainable micro power generators (i.e., home-based
solar cell and wind turbine owners) feeding to the national
grid, from November. Right now, the utilities pay just JPY8
per kW/hr. According to Sekisui, the new power systems will
add about JPY5.6MM to the price of a typical four-room
apartment, but amortized, this works out to just
JPY5,000/month. (Source: TT commentary from nikkei.co.jp,
Sep 19, 2009)

http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090918D18JFA05.htm

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of
bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS has a new and exciting opening for an energetic and
bilingual professional to enter the dynamic and fast-moving
BiOS internal sales team. Tasked with bringing new
customers to BiOS and taking ownership of the growth of
your new accounts, you will be dealing with different
companies and people every day, and meeting potential
clients all over the city of Tokyo to demonstrate BiOS’s
service offerings to decision makers and executives in a
variety of leading foreign organizations.

This role requires drive, ambition and energy, and the will
to bring success to everything you do. As the face of BiOS
you will need to have excellent interpersonal skills, a
positive outlook in the face of any situation, and a good
understanding of business in Japan, coupled with your
polished language abilities. For an energetic and driven
person this role can be both profitable and exciting, so
submit your resume to BiOS today!

Remuneration is competitive, with excellent opportunities
for commission

** POSITIONS VACANT

- Country Manager, telecoms provider, JPY15m + incentives
- Procurement Officer, foreign bank, JPY4.5m – JPY5m+ comm.
- IT Support Analyst, Tokyo Law Firm – JPY3.5m – JPY5m
- Apps Support Engr, European Insurance co, JPY6m – JPY7.5m
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Interested individuals may e-mail resumes to:
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-----------------------------------------------------------

----------- Editor-in-chief/Entrepreneur position ---------

For interested candidates, this is your last opportunity to
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Japan Inc. Communications is seeking an Editor-in-Chief
with strong business sense and an entrepreneurial spirit to
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The applicant should have experience in business reporting
and possess strong writing and editing skills and news
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The business of print and web-based publications is
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To apply, please send your resume, cover letter and any
relevant clippings to: michael at japaninc.com
-----------------------------------------------------------

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Through continual and positive programs across such
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This is a unique opportunity to join a dynamic team who
share a common passion: making a difference for these kids.
There is a lot of freedom and trailblazing involved which
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+++ UPCOMING EVENTS/ANNOUNCEMENTS

-------------- ACCJ Event – Green Marketplace -------------

The Green Marketplace Forum (GMF) is an interactive event
building on the great success of last year's CSR Forum.
With the help of star speakers and experts, the forum will
explore future trends and business opportunities of Green
Design/Building and Green Mobility/Transportation.

Speakers:
• Mayor Hiroshi Nakada of Yokohama
• Paul Sands, General Manager of Virgin Airlines
• Kiyotaka Fujii, President of Better Place Japan
• U.S. Govt. Experts on emerging GOJ policy around carbon
reduction targets

DATE: Wednesday, September 30, 9:00 to 18:30
VENUE: Four Seasons at Chinzan-so in Tokyo
COST: (All fees include a buffet lunch)
Morning Session: Members: 7,000 yen; Guests: 8,000 yen
Afternoon Session: Members: 7,000 yen; Guests: 8,000 yen
Full Day: Members: 10,000 yen; Guests: 11,000 yen

Contact ACCJ Programs: (programs at accj.or.jp)  or 03-3433-8543
REGISTRATION AND CANCELLATION DEADLINE: 5 p.m., Friday,
September 25
-----------------------------------------------------------

-------------- JMEC for Budding Entrepreneurs -------------

Do you want to get hands-on experience learning how to do
business in Japan? Then, attend one of the Japan Market
Expansion Competition (JMEC) information sessions listed
below and find out how. All sessions are free, but
registration is required.

Register online at
http://www.jmec.gr.jp/participants/upcoming-information-sessions

The deadline to apply for the program is October 23, 2009.
For more information, please visit www.jmec.gr.jp.

- Thursday, September 17th, 7:30-9:00pm,
American Chamber of Commerce in Japan

- Tuesday, September 29th, 7:30pm-9:00pm,
Temple University Japan Campus, Azabu Hall, room 212

- Wednesday, October 7th, 7:30pm-9:00pm,
American Chamber of Commerce in Japan

- Thursday, October 15th, 7:30-9:00pm,
Temple University Japan Campus, Mita Hall room 503

- Tuesday, October 20th, 8:15-9:15am*,
Temple University Japan Campus, Azabu Hall, room 212
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------------ Japan Inc. Entrepreneur Seminar --------------

Entrepreneur's Handbook Seminar 17th of Oct, 2009

The next in our highly popular business start-up seminars
is just around the corner. If you have been considering
setting up your own company, find out what it takes to
make it successful. Terrie Lloyd, founder of over 13
start-up companies in Japan, will be giving an
English-language seminar and Q&A on starting up a company
in Japan. This is an ideal opportunity to find out what is
involved, and to ask specific questions that are not
normally answered in business books. All materials are in
English and are Japan-focused.

For more details:
http://www.japaninc.com/entrepreneur_handbook_seminar
-----------------------------------------------------------

----------- Entrepreneur Association of Tokyo -------------

Seminar - Tuesday, October 6th
Speaker: Caroline Pover,
Founder and President of Alexandra Press

Seminar Title: 'Overcoming Adversity to Survive and Prosper'

While teaching by day, Caroline launched her own magazine
for foreign women in Japan, 'Being A Broad', and
interviewed 250 foreign women as she wrote her first book,
'Being A Broad in Japan: everything a Western woman needs
to survive and thrive' which became a best seller within
months.

Establishing Alexandra Press under which to self-publish
her book led to further publishing projects and in 2004,
she took over the 'Weekender' magazine publishing two
issues per month and revamping the business until she sold
it in 2008.

Caroline Pover will speak on the scaling up and down of her
business activities and how to handle a business when the
unexpected occurs based on her personal experience in
overcoming health issues to write the Guide to
International Schools in Japan.

Please sign up early while seats are available.

Date/Time: Tuesday, October 6th - Doors open at 6:30,
Seminar starts at 7:00
Location: The Foreign Correspondents' Club of Japan
Language: English
Website: http://www.ea-tokyo.com
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors at terrie.com.

*** No feedback this week.

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Contact: marketing at japaninc.com for more details.
-----------------------------------------------------------

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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------------ Japan Inc is worth every penny! --------------

J at pan Inc is Japan's only publicly sold English-language
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trends in Japan, each beautifully designed full-color issue
brings you in-depth analysis of business, people and
technology in the world's second largest economy.

Visit www.japaninc.com for more information
-----------------------------------------------------------