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HOME  > Past issues  > 2022 June 8 - 14  > Pension cut amid price surge will negatively impact many pensioners’ livelihoods
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2022 June 8 - 14 [POLITICS]

Pension cut amid price surge will negatively impact many pensioners’ livelihoods

June 11, 2022

Akahata editorial (excerpts)

Ahead of pension payment day on June 15, pensioners in Japan all received a notice about a 0.4% cut in their pension benefits. Amid a jump in food prices and utility bills, the pension cut will be a blow to many elderly people.

According to the Welfare Ministry, as a common case, the amount of national pension benefits will be reduced by 3,108 yen a year and 10,836 yen will be cut from the annual employee pension benefits for married couples.

Pension benefits are a kind of lifeline for many elderly people to survive. A Cabinet Office survey shows that 67% of people aged 60 and over responded that public pension benefits are their main source of income. The most common reason given in the survey for still working was that pension benefits are not enough to make ends meet. In the first place, most people cannot survive on pension benefits alone in Japan.

In contrast, in Germany, the government will increase its payments of pension benefits in July by 6.12% in former East Germany areas and by 5.35% in former West Germany areas in reflection of nationwide wage hikes last year.

Pensions are a major pillar supporting local economies. The Welfare Ministry calculated the ratio of pension benefits to household consumption expenditures in each prefecture. The ministry found that it was more than 10% in 46 prefectures, and that more than 20% in 13 of the 46 prefectures. The ministry itself admitted to the fact that pensions underpin stable consumption activities in regional economies.

Cuts in pension benefits will decrease private consumption which could end up having a negative impact on the wage levels of the working population. The government should review the present pension-premium mechanism which tends to benefit high-income earners and should utilize a portion of pension reserves for an increase in its payments of pension benefits. It is necessary to reform the pension system so that pensions can be reliable for both elderly people and the working population.

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