As mention in the article of 2025-06-26 デイリー新潮, the Lump-sum Withdrawal Payment System is a scheme under Japan’s public pension system that allows certain individuals who leave the system to receive a one-time payment based on the pension contributions they made during their period of enrollment. This system primarily benefits foreign workers who have paid into the Japanese pension system during a temporary stay in Japan but are not eligible to receive old-age pension benefits due to insufficient contribution periods.
1. Overview of the System
This system enables non-Japanese nationals who were enrolled in the National Pension (Kokumin Nenkin) or Employees’ Pension Insurance (Kōsei Nenkin) schemes for a short period to claim a lump-sum refund of part of their contributions when they permanently leave Japan.
Since Japan’s public pension system generally assumes long-term participation leading to future pension benefits, this system is designed to address the unfairness that may arise when someone pays into the system but cannot receive any pension due to early departure.
2. Purpose of the System
The key purposes of the lump-sum withdrawal payment system include:
- Compensation for short-term contributors: Provides partial refunds for those who paid into the system but are ineligible for pension benefits.
- Support for foreign workers: Addresses the needs of temporary foreign workers such as technical trainees and those under the specified skilled worker visa.
- Maintaining fairness and trust in the pension system: Helps reduce concerns of “contributing without return,” which may erode trust in the system.
3. Eligibility Requirements
To receive a lump-sum withdrawal payment, applicants must meet the following conditions:
For the National Pension:
- Must not be a Japanese national.
- Must have been a National Pension insured person.
- Must have paid premiums for at least 6 months.
- Must not meet the minimum eligibility for old-age pension (generally 10 years of contributions).
- Must apply within 2 years after leaving Japan.
For the Employees’ Pension Insurance:
- Must not be a Japanese national.
- Must have been enrolled in the system for at least 6 months.
- Must not qualify for old-age pension benefits.
- Must apply within 2 years of leaving Japan.
Note: Japanese citizens are not eligible for this benefit. It is intended primarily for foreign nationals who are no longer residents and do not intend to receive pension benefits in Japan.
4. Payment Amount
The payment amount is calculated based on the number of months of participation and, in the case of Employees’ Pension, the insured person’s salary.
For the National Pension, as of FY2024:
- 6 to 11 months of contribution: approx. ¥49,770
- 12 to 17 months: approx. ¥99,540
- 18 to 23 months: approx. ¥149,310
(Amounts increase based on contribution periods)
For the Employees’ Pension, the amount depends on the average monthly salary and contribution period, but only the employee’s portion of contributions is refunded—not the employer’s.
5. Application Procedure
To apply, the following documents must be submitted to the Japan Pension Service:
- Application form (Lump-sum Withdrawal Payment Request)
- Copy of passport (including identity and exit stamp pages)
- Bank account information for international remittance
- Documentation of your pension number
The application must be made within two years of your final departure from Japan. Claims filed after this period are not accepted.
6. Challenges and Issues
Despite its benefits, the system has several notable drawbacks:
(1) Low Refund Amount
The lump-sum payment covers only a fraction of the total contributions made, particularly for Employees’ Pension, which involves higher contributions.
(2) Complicated Procedures
Application forms are in Japanese, and the process requires overseas mailing and understanding of the pension system, posing a barrier for many applicants.
(3) Lack of Awareness
Many foreign workers are unaware of the system due to insufficient guidance or communication, and often miss the opportunity to claim the payment.
7. System Revisions and Outlook
As the number of foreign workers in Japan increases, criticism has grown regarding the fairness and transparency of the system. International organizations such as the OECD have pointed out the limited benefits provided to foreigners from countries that do not have a Social Security Agreement with Japan.
Japan has signed bilateral agreements with some countries to allow for totalization of coverage periods, which helps foreign workers meet eligibility for future pension benefits. In such cases, the lump-sum payment system may not be necessary.
8. Conclusion
The Lump-sum Withdrawal Payment System plays an important role in compensating foreign nationals who temporarily paid into Japan’s pension system but do not meet the eligibility criteria for pension benefits. While it serves as a partial safeguard against losing all contributions, issues such as low refund amounts, procedural complexity, and lack of awareness remain.
As Japan continues to accept more foreign workers, ensuring fairness and transparency in the pension system—including through potential expansion of social security agreements and improvement of this lump-sum system—will become increasingly important.
Although seemingly minor, this system is a crucial mechanism in maintaining equity and trust in Japan’s broader pension framework, especially in a globally connected labor market.