Government to Help Firms Keep Aged Workers 

The Yomiuri Shimbun

Japan 

July 30, 2008 

The government on Tuesday released a package of five plans for providing better social security services, including one aimed at extending financial aid to corporations that keep employees aged 65 and older who want to keep working on their payroll. 

The package would incorporate fiscal and other measures to help increase the number of facilities for children that could be used both as educational institutions comparable to nursery schools and as child welfare facilities akin to day care centers. 

The set of plans would consider reforming the state-run pension system in a manner that would better motivate pension recipients to keep working. 

On June 23, Prime Minister Yasuo Fukuda said his Cabinet would put together a set of emergency measures to be taken by the end of fiscal 2009 to improve the quality and quantity of social security services in such a way that people could live without worries about the future, coupled with specific procedures for carrying out such plans. To live up to his promise, the prime minister instructed relevant ministries and agencies to think about what kinds of specific steps could be taken. 

The package incorporates more than 100 items in five categories covering the following: 

-- Addressing issues arising from the sharp increase in the number of elderly people. 

-- Improving the health care system. 

-- Providing assistance for child care. 

-- Tackling problems arising from the rise in the number of nonregular workers.
 
-- Prompting administrative reform of health, labor and welfare services. 

To achieve these goals, the government will order each relevant ministry and agency to ensure its budgetary request for fiscal 2009 reflects plans and programs under its control. This will be complemented by a plan to implement necessary legislative measures, government officials said. 

At present, each corporation is required to create, by the end of fiscal 2013, a system in which employees are kept on the payroll until they are 65. To complement this scheme, the latest policy package would establish a system designed to extend subsidies to companies if they keep employees who want to work past the age of 65 on the payroll. 

Meanwhile, the government, through the package, would consider reforming the current system under which workers in the pensionable-age bracket must take cuts in their pension benefits in proportion to their wages. Critics have said the system could erode the morale of elderly workers. 

The government will consider giving tax breaks to companies whose elderly workers occupy a certain percentage of their total workforce, including favorable treatment in depreciation claims on machinery and other equipment. 

The package would also step up financial assistance aimed at rectifying the slow progress in increasing the number of facilities for children that could function both as educational institutions and as welfare facilities--in what would amount to the mix of nursery schools and day care centers for children. 

Currently, facilities in the former category are supervised by the Education, Science and Technology Ministry, and the other by the Health, Labor and Welfare Ministry. 

The package would create a grant-in-aid system to be financed by relevant education ministry budgetary means combined with funding from the health ministry. 

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