Pension in Japan

Continuing on with my posts about things you have to do once you first come to Japan, next on the list we have pension. Regardless of nationality, everyone has to pay pension in Japan, a fact that many people still not know (myself included when I first came to Japan). 

Starting from the time you legally become an adult (age 20 in Japan), every resident of Japan (no matter if they are Japanese or not) is obliged to pay into the pension fund in one form or another. You can apply for exemption from this, but only if you are a student or otherwise can prove that you only have limited income.

There are two major forms of pension in Japan. The first one is the “social pension” (kousei nenkin, 厚生年金), usually reserved for people that are employed at a company (shain, 社員). Then there is the “national pension” (kokumin nenkin, 国民年金) for people that do not qualify for the social pension (part-timers, housewives etc.). For the social pension, contributions are calculated based on your salary, deducted straight away and your employer will take care of the payment. For the national pension there is a set contribution of around 16.000 JPY that you have to pay every month. You can either pay via payment slip, that you will receive in the mail, pay by credit card or set up a bank transfer.

Especially in the case of national pension it is good to make sure whether you have to pay or not because the Japanese bureaucracy is not very good at sharing information. For example, if you go to city hall and register your address with a student or working holiday visa, the local pension division will only receive the information that you registered, but not that you are a student or on a working holiday. If you do not specifically go to their counter and complete the application for exemption from pension contributions, you may suddenly receive a letter asking you to pay over 100,000 JPY in missed contributions. You can still do the exemption procedure even If you received the letter, but you save yourself a lot of stress and anguish by simply going to the pension division when you first register your address in Japan and sorting things out in advance with them.

If you are planning to return to your home country, the pension contributions you made in Japan might seem like a waste. But not to worry, in that case, you can apply to get the money back in full. I have not done this yet, but from what I hear the process is very long and bureaucratic, so if you are wishing to go this route, I recommend you bring someone who can speak Japanese and help you through the process. If you have any experience regarding this, let me know in the comments how it went for you.

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