Social security benefits as a share of GDP Japan FY 1980-2022
In the fiscal year 2022, social security benefits accounted for 24.3 percent of the gross domestic product (GDP) of Japan, down from 25.06 percent in the previous year, the highest point in the past four decades.
Social security benefits in Japan
Social security benefits, consisting of medical care, pension, and welfare and other benefits, amounted to over 137 trillion Japanese yen in the fiscal year 2022. Pension benefits made up the largest category of social benefits available in Japan at around 55.8 trillion yen, followed by medical care benefits. Amid the aging population and shrinking workforce, which will cause a declining number of contributors to support a growing number of retirees in the future, Japan’s public pension system is under pressure and the government has scheduled reforms to the system for 2025.
Japan’s public pension system
Japan’s public pension system offers universal coverage to all residents since 1961. Like most public pension schemes, it partly finances pension benefits of current retirees with contributions made by current workers as a pay-as-you-go (PAYG) system. The public pension system consists of two pillars; a flat rate basic pension scheme mandatory for every resident aged 20 to 59 (National Pension) and an income-related Employees’ Pension Insurance for employees and public servants.
