1. Timing and contents of the amendment
As of April 1, 2022, the rate of the premium allocated to the “two designated projects” has been raised from 0.3% to 0.35%, while the rate of the premium allocated to unemployment benefits is scheduled to be increased from 0.2% to 0.6% from October 1, 2022.
The “two designated projects” refer to job security programs and ability development programs, which are entirely funded by the designated portion of premiums paid by employers. In principle, treasury fund and premiums paid by workers are not spent for these projects. The table below shows the percentages before and after the amendment.
| Category | Employment insurance premium rates | ||
| Until March 2022 | From April 2022 | From October 2022 | |
| Expense allocated for unemployment benefits, etc. |
0.20% | 0.20% | 0.60% |
| Expenses allocated for childcare leave benefits, etc. |
0.40% | 0.40% | 0.40% |
| Expenses allocated for the two designated projects |
0.30% | 0.35% | 0.35% |
| Total | 0.90% | 0.95% | 0.35% |
*The new rates after the amendment are indicated in red.
2. Background of the amendment
The latest amendment is in line with the bill approved by the cabinet on February 1, 2022, and submitted to the Diet.
Behind the change is the severe impact of the coronavirus pandemic on the status of employment insurance system. Due to a state of emergency and other government measures to contain the spread of coronavirus, many firms have reduced or suspended operations, resulting in an increase in the unemployment rate.
Expenses for the measures to rescue businesses and workers, such as the Employment Adjustment Subsidy and other benefits have snowballed, aggravating the employment insurance program’s fiscal status.
3. Annual renewal
While the premium rates for both employers and employees are due to be increased from October 2022, the authorities are not planning to change the format for annual renewal in this fiscal year.
[Reference]
What are job security programs and ability development programs?
Job security programs are the measures implemented for the stability and improvement of employment, such as the Employment Adjustment Subsidy.
Ability development programs are the measures aimed to promote the development and enhancement of insured workers’ abilities. Support for occupational training is provided in this scheme.
The information in this article is valid as of March 2022.
The contents will be updated with latest information.
