Studying in Japan for over a year? Apply for Special Payment System for Students

Foreign students studying in Japan, have you enrolled in the National Pension System of Japan? All residents residing in Japan, including students from other countries, are required to participate the National Pension System. But if you are a student, you may be entitled to apply for Special Payment System for Students to postpone the contribution payments. This is a great arrangement that enable you to receive the full benefit of the crucial social security system while you are exempt from contribution payments. Let’s have a close look at who is entitled to this system and what conditions apply.

Why apply for Special Payment System for Students?

Under the National Pension System of Japan, all residents aged 20 to 59 years who have an address in Japan must enroll in the system no matter of their nationality. Even foreign students are not exempt. However, squeezing out the cost of contributions from a tight budget of student is not an easy job. Often students end up just leaving it unpaid and forget. Also, foreign students tend to be reluctant to pay the contributions, because they are going home before they start receiving the Old-age Basic Pension. But except for the Old-age Basic Pension, what if you get involved in a traffic accident or become disabled due to an illness? In cases of such unexpected incidents, you are entitled to receive the Disability Basic Pension only if you have enrolled in the National Pension System. In addition, it offers Special Payment System for Students, which postpones the contribution payments, to all students including foreign ones as long as they meet the conditions. That is, you can receive a sufficient protection when something happened to you without paying the contribution, only if you are diligent enough to lodge a request to exempt from the contribution payments as you are a student.

Who is eligible to Special Payment System for Students?

Students whose annual income is less than a certain amount are entitled to Special Payment System for Students. A student defines a person studying at a university, two-year college, high school, institute of technology, specialized training college, miscellaneous school, Japan campus of specific foreign universities(※). Students of evening courses, part time courses, and distance learning courses are also eligible. That means most of students are covered, but students who is going to stay in japan for less than a year, for example non-degree students, research students or exchange students, are excluded. They might be eligible to Contribution Postponement System for Low Income Youth.

※Specific courses of Temple University Japan Campus, Lakeland College Japan Campus, Far Eastern Federal University Hakodate, Tianjin University of Traditional Chinese Medicine Japan Campus, United Nations University, Alliant International University CSPP Japan Campus, specific courses of Beijing Language and Culture University and McGill University Japan.

Income test for Special Payment System for Students

Majority of students who earn income from a part time job or other sources should be aware that Special Payment System for Students is income tested. For example, a student who has no independents must earn less than JPY1,180,000 in the previous financial year to be eligible to the system. In the first year in Japan, students practically earn zero income within Japan in the previous financial year, so everyone can automatically meet the condition. After second year, it is recommended to revise the previous year’s income. Also note that “income” does not mean the net income you actually receive as a wage for the casual employment. Generally, your “taxable income” is calculated by deducting related expenses from your gross income. For casual workers, JPY650,000 can be deducted as approximate related expenses from their gross income, therefore their gross income can be somewhere around JPY1,940,000. If you are not sure your income meets this income test, take a proof of your income such as an income tax withholding slip with you and ask the staff when you apply for Special Payment System for Students. Also, the amount of your family member’s income is irrelevant with your eligibility to this system.

How to apply

First of all, you need to obtain an application form. The application form is available from the national pension counter in a municipal office of your area or a Japan Pension Service branch office and their website. Fill up the form and submit it at the national pension counter in the local municipal office. You can also send it by post and this is a lot easier and save your time if you have no queries about the contents. You will also be required to present your national pension book, student card or the certificate of enrollment showing an expiry date. A photocopy is accepted only for a student card. You will need to present an original copy of the certificate of enrollment. If any information about yourself including the expiry date, grade or the date of enrollment is printed on the pack of your student card, make sure to take a photocopy of both side of your student card. The eligibility assessment for Special Payment System for Students covers the period from April to March next year regardless of the date your application is submitted. If your application is submitted between January and March, the assessed period starts April previous year and ends March this year. Only when you submit the application in April, you can apply for both previous financial year and current financial year. To apply for two financial years, you will need to two different applications. Once an assessment is complete, you will receive a letter of approval or a letter of decline.

If you don’t apply for Special Payment System for Students

Benefits you may entitled from the National Pension System is not limited to the Old-age Basic Pension. If you become disabled due to diseases or accidents, you may be entitled to receive the Disability Basic Pension. The followings are the benefit amount of the Disability Basic Pension.

Grade 1: requires a constant care on a daily basis
JPY975,100

Grade 2: has a disability interfering with everyday activities, but no need of a constant care on a daily basis
JPY780,100

Under the Disability Basic Pension, you receive benefits from the government 6 times every year even after you returns to your country as long as your disability continues, in addition to the period you are staying in Japan. Also, in case you lose your life in an unexpected accident, your family will receive the Survivors’ Basic Pension. You may enjoy these entitlements only if you apply for Special Payment System for Students. If you don’t know about this exemption system or simply ignore the contribution payment, you will lose all the entitlements you might have. You don’t pay the contributions in both cases, but the results will be very different.

Summary

Sorting out your insurance or pensions is the last thing that becomes the top priority in your busy life. But you definitely don’t want to miss such an advantage of this system if just a one piece of paper makes this huge difference. If you have left your contributions unpaid, or don’t even know if you have enrolled in the National Pension System, visit a Japan Pension Service branch office as soon as possible to check your status. If it turns out you are entitled to Special Payment System for Students, make sure to apply for the system in case something happens.