Attention, short term students: contribution postponement system of NPS

photo by blueprintsforstudentsuccess.com

Contribution payments of the National Pension System is mandatory for all residents residing in Japan. Even so, such regular contribution payments can often be so much pressure on young students’ budgets. Overseas students studying in Japan for less than a year are not eligible to Special Payment System for Students. Therefore they must be seeking for some solutions more than anyone else. If you are one of those students, Contribution Postponement System for Low Income Youth is the right answer for you. If you are approved for this system, you may be entitled to receive benefits from the Disability Basic Pension in case something happened to you. If you are under 30 years of age and fulfil certain conditions, it is worth applying. Let’s have a close look on this system.

Why use Contribution Postponement System for Low Income Youth?

All registered residents of Japan aged 20 to 59 years must be covered by the National Pension system, no matter of their nationalities. There is a payment relief for students including overseas students, Special Payment System for Students, but short term students studying for less than one year are not eligible to this arrangement. However they cannot just leave contributions unpaid as they will lose the entitlement for the Disability Basic Pension. If you are facing this dilemma, think about applying for the Contribution Postponement System for Low Income Youth. This system allows you to postpone your contribution payments once your application is granted, if you are in your twenties and are having difficulty to pay contributions. You may be entitled to receive some money when something unexpected happens to you only if you apply for the arrangement and your application is granted. Benefit payments will continue as long as your disability lasts even after you return to your country.

Who can apply?

Generally, an applicant must be:

under 30 years of age
a low income earner whose annual income in previous financial year was JPY570,000 or less (if he/she has no dependents)

The income level of the mean test varies if the applicant has dependent(s). Also, the statements of the applicants may affect their eligibilities: A disabled person or widow whose annual income in previous financial year was JPY1,250,000 or less, those who can prove they are unemployed or a survivor of a natural disaster, those who receiving financial supports other than benefits under the Public Assistance Act. The first two conditions at the beginning of this section is the basic conditions to be eligible. If you fulfill these two conditions, you will be more than likely to be eligible to apply for Contribution Postponement System for Low Income Youth. In addition, if you are overseas student studying for less than one year, your annual income in previous financial year was more than likely under JPY570,000. In such cases, you only need to meet the age condition.

How to apply

The application for Contribution Postponement System for Low Income Youth can be made at the pension counter in a municipal office in your area. Fill up the form at the counter and present your pension book to the staff. Bring your inkan with you just in case. The application form can be downloaded from the official website of Japan Pension Service. The application form can be sent by post attached with a copy of ID page of your pension book or a notification letter of the basic pension number. Note that Contribution Postponement System for Low Income Youth covers the period from June to July next year. if you wish to be covered for longer than this period, you may need to make multiple applications. Do not confuse with the period covered by Special Payment System for Students, which is April to March next year. Once your application is granted, you will receive a result in writing.

Background of this postponement arrangement

This system was newly introduced in 2005. There had been other income tested payment relief arrangements, however, these existing arrangements were designed to assess “family income”. That means, applicants living with parents whose income exceed the threshold become exempt from the payment relief, even though the applicant’s individual income is low. Under such insufficient systems, many youths end up choosing not to enroll the National Pension System unless their parents pay their contributions. Contribution Postponement System for Low Income Youth was introduced in order to avoid such situations of young residents. This system benefits not just casual workers, NEETs or jobless youths who are in their 20’s, but young students from overseas who are disqualified from Special Payment System for Students for the short term stay in Japan.

Summary

In addition to Contribution Postponement System for Low Income Youth introduced in this column, there are some other exemption and extension arrangements of contribution payments for the National Pension System. It is important you understand your current situation to select the most appropriate arrangement to protect yourself even though your stay in Japan will last for a short period. The National Pension System is a solid social security system which is open to all the registered residents in Japan regardless their nationalities, why not utilize it for better protection.