From April 2025, the benefit rate for elderly workers will be changed. This article explains about the Basic Continuous Employment Benefits for the Elderly, which covers a majority of elderly workers, and looks at planned changes.
[1] Basic Continuous Employment Benefits for the Elderly
This benefit is provided to workers aged 60 or older and under 65 and enrolled in the Employment Insurance System, when their wages become lower than 75% of the levels when they were 60.
Workers who satisfy the requirements may file the application with the Public employment security office (Hello Work) and receive benefits of up to 15% of their monthly wages.
[2] Workers entitled to the benefit
Workers aged 60 or older and under 65 who have been insured for a total period of at least 5 years are entitled to the benefit. If a worker, for example, retired at the age of 57, received the basic allowance of the employment insurance system, landed a job again at 58 and continued working until turning 60, the worker cannot receive the benefit until the insured period at the new job reaches 5 years.
[3] Reduction in the benefit rate
From April 1, 2025. the upper limit to the benefit rate will be lowered. Workers whose wages are 75% or higher compared with the levels at the time of age 60 cannot receive the benefit. For workers whose wages are 64% or lower of what they were paid when 60, the benefit rate will be 10%. If the wage is over 64% and less than 75%, the benefit rate will be calculated by a designated formula and determined between 0% and 10%.
[4] Workers affected by the benefit rate reduction
Workers who reach the age of 60 (or whose insured period reaches 5 years) on April 1, 2025, or after will become subject to the benefit rate reduction. Benefit rates will be kept unchanged for workers who became entitled by March 31, 2025.
Since the Continuous Employment Benefit for the Elderly affects the livelihood of workers whose wages decrease after turning 60, companies should provide detailed explanation about the benefit reduction to relevant workers in advance.
[Reference]
The Labour Ministry, “Continuous Employment Benefit for the Elderly benefit rate will be changed from April 2025”
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000160564_00043.html
*The information is based on laws and regulations as of the date of this article.
