Young parliamentary members belonging to the Liberal Democratic Party have proposed to create a children’s insurance plan so that caring and educating infants and young children could be served free of charge. The Abe government has approved it to be incorporated in its policy package. Tax money should be used to administrative services, like caring and educating children. An insurance system is not a right solution.


CHILD CARE AND EARLY CHILDHOOD EDUCATION SHOULD NOT RELY ON INSURANCE MONEY


The Sub-Committee on Economic and Financial Initiatives to Cope with Years after 2020 (chaired by Tachibana Keiichiro) has proposed a children’s insurance program. It held a press meeting where Acting Chairman Koizumi Shin’ichiro explained the project.


Decreasing Population and Aging Society


The sub-committee advises to reform the social service systems like, those of pension plans, health and elderly care schemes and so on. It illustrates how the Japanese society may look like in the future. The panel focuses on issues of decreasing population and aging society on the ground that the government’s roadmap of the ‘Integrated Reform Policy of Social Services and Taxation’ foresees only processes up to the year 2020. The Children’s Insurance Plan is assumed as one of the reforms.


The proposal says to raise a fund amounting 340 billion Yen annually in order to extend practically free-of-charge care and education services of children up to five years of age: the finance should rely on the pension plans. That is, for those registered by employees’ pension plans they should pay premiums increased by 0.1%, which should be imposed, respectively, both on employers and employees, and for those of the government-managed pension plan they should pay 160 Yen monthly as premiums.


According to the proposal, the childcare benefit should be increased by 5,000 Yen monthly for a while. In the near future a fund of 1.7 trillion Yen would be ready from the employees’ insurance plans by surging premiums by 0.5% evenly on the sides of employers and employees and from the government pension plans in which subscribers should pay 830 Yen monthly. The child care benefit should be increased by 25,000 monthly. No limit should be set for incomes of beneficiaries.


Currently the child care benefit amounts 15,000 per month for a child up to three years of age, 10,000 Yen for a child between 3 years old up to the 6th grade elementary school children’s age who is a first and/or a second sibling of the family, and 15,000 Yen for a third sibling. For a junior high school student it amounts 10,000 Yen. The income limit of a family is set up (approximately 9.6 million Yen) and the benefit is 5,000 Yen a month.


Employers Accumulate Internal Reserves


If the proposal is implemented as policies, a pre-school age child would be paid a benefit of 40,000 Yen a month in the future. It is good to increase the sum without setting any income limit of a family. But questions arise; why would children of pre-school age be benefitted? Why should a social insurance plan cover childcare?


Insurance plans cover risks. Childcare and education are not categorized as risks to be covered by insurance. Incidentally, premiums of pension plans will be fixed from the coming autumn month, while premiums of insurance plans of health and elderly care are to surge. If a children’s insurance system enters, people will pay a bigger amount of money every month.


Minister of Health, Labor and Social Welfare Shiozaki Yasuhisa says that ‘a smaller baby grows to be a bigger child’, but the new insurance system would develop to give people a bigger blow.


Sumi Shuzo, Chairman of the Population Panel of the Keidanren, or the Japan Business Federation, told: ‘I believe that costs necessary for childbirth, his/her care and compulsory education should be practically free to be ensured publicly’ and ‘if all people are ready to support, a financial source should come from tax money’. His view is reasonable.


The Japan’s GDP remains at a level of 500 trillion Yen for these 20 years. Meanwhile, internal reserves of business entities keep growing, amounting over 400 trillion Yen as of March 2017. Employers should have a responsibility to owe higher taxes instead of piling up internal reserves in order to educate new generations of workers.




June 20, 2017