“Children’s insurance” seen as solution for Japan’s low birth rate

Proposed additional welfare pension premiums will be used to provide parents with additional funds for child-rearing

“Children’s insurance” seen as solution for Japan’s low birth rate

Insurance News

By Gabriel Olano

Japan has long been struggling with a falling birth rate and an increasing number of elderly - a phenomenon known as population ageing. As such, the Japanese government has taken several actions to promote higher fertility among the population.

One solution proposed for the extremely low fertility in Japan is “children’s insurance”, a mechanism which aims to provide parents with additional financial resources for child-rearing. The funds for this will be sourced from a proposed increase in public pension premiums.

According to Shinjiro Koizumi, a member of the House of Representatives under the ruling Liberal Democratic Party and a supporter of the children’s insurance proposal, the party is looking to pass a welfare pension premium increase of 0.1% each for workers and employers. This would generate an additional ¥340 billion (US$3.07 billion) annually, funding a monthly child care allowance hike for children up to three years old from ¥15,000 to ¥20,000 (US$180).

“The goal of children’s insurance is to make preschool education and daycare virtually free from birth until a child turns five,” Koizumi told the Yomiuri Shimbun. He added that they are also looking to increase the premium rate to 0.5% in the future, which will allow the doubling of the monthly childcare allowance.

Opponents of the proposal say that it will unfairly burden people who do not have children.

In response, Koizumi said: “If we do not curb the country’s falling birth rate, we will become a nation with an extremely unbalanced population makeup, unable to maintain the social security services we have now… We want people to understand the benefit it will have on all of society, even if indirectly, if there are more births.”

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