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Understanding Japanese Unemployment Insurance

Something everyone working in Japan should know about but hope they never have to use.

By 9 min read

For many foreigners, working in Japan is a dream come true. Experiencing the culture first-hand by living here and participating in daily life rather than just observing it in passing. But what happens when the grim realities of working life creep into your amazing Japanese experience? What happens if the company work for goes bankrupt, issues layoffs, moves or merges and you lose your job while living here without a follow-up gig on the horizon?

Luckily, the social benefits that are deducted from your pay can help. For anyone who quits or is downsized or otherwise loses their job and has no secondary source of income to support themselves there is a temporary fallback — koyou hoken (雇用保険), or unemployment insurance.

What is it?

The koyou hoken benefit — also known as shitsugyou hoken (失業保険) — is a kind of safety net for those who have lost their job in Japan and are yet to find a new one. The scheme helps recently unemployed people to support themselves until they find their next job. It’s run by the Japanese Ministry of Health, Labour and Welfare but anyone who wants to use the system will have to go through Hello Work (Japanese), the government organization that helps anybody in Japan find employment.

Who can enroll?

To claim unemployment insurance benefits, you must, of course, have first paid into the system. Anyone who has worked in Japan for six months and made insurance payments is eligible to apply.

Unemployment insurance payments are wrapped up with pensions and health insurance as part of shakai hoken (社会保険), or social insurance benefits. These are all paid together and appear as deductions on your payslip if you are a full-time employee. Part-time or freelance workers will have to pay their insurance independently as part of their kokumin kenko (国民健康) hoken, or national health insurance.

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If you’ve paid enough into the system to benefit from it, you then have to prove that your circumstances warrant these payments. At the Hello Work office, they want applicants to prove that they are looking for work and are sending out job applications. It’s important to remember that the insurance is designed to help those who are between jobs and not those who are unemployed for long stretches of time.

It’s important to remember that the insurance is designed to help those who are between jobs and not those who are unemployed for long stretches of time.

If you’re injured while at work and can’t work for an extended period of time because of this, you might be eligible for Workers’ Accident Compensation Insurance (労働者災害補償保険 rousai hoken) that is also organized by Hello Work. If you can’t work for a long time due to unrelated health problems then this is not the system for you. Anyone in this position should check out our guide to understanding the Japanese health insurance system.

How do you collect?

First, you will need to go to your local Hello Work office and let them know you are unemployed. They will want you to prove that you are eligible to enroll so make sure to bring along the following items:

  • Rishoku-hyo (“letter of separation,” or official document from your previous employer showing your salary, how long you’ve worked there and the reason for leaving your job)
  • Residence card
  • Bank book
  • My Number card
  • Hanko
  • Two passport-sized photos, 3 cm x 2.5 cm each

All of these will be used to fill out the paperwork needed to process your claim. You also need to bring along documents that show why you are now unemployed. This can be an email stating why you were let go or other informal communication from your company. Your previous employer should provide you with a rishoku-hyo that states the true reason for your leaving. Sometimes companies will add different reasons to this form if it’s easier for them, such as saying that you quit rather than that they fired you (a rather large discrepancy). Watch out for dodgy business practices like this as it can change how long you have to wait before collecting any benefits.

If your contract came to an end and a new contract was never offered, then you need to show them an email or a letter showing that you asked to be re-contracted to prove that you wanted to continue working. If you quit your job, then it will take longer to process your claim as you chose not to work. The length of time seems to vary depending on circumstance but it can be up to an extra three months.

In exchange for your unemployment insurance payments, you will have to show proof of application to at least two jobs per month…

Once you have sorted out all of the paperwork, there is a seven-day waiting period where you are expected to support yourself. After this, benefit payments will start to be calculated. Twenty-eight days after your first meeting, you will be expected to return to discuss how you have been looking for work. This appointment is very difficult to reschedule, so make sure you pick a day of the week that you are always free because this is now your Hello Work meeting day until you get a job. If you miss a meeting without calling ahead, your application will be held back — potentially for a month.

In exchange for your unemployment insurance payments, you will need to show proof of application to at least two jobs per month, meet with a Hello Work staffer every 28 days or enroll in some form of education.

In order to fulfill these obligations, when you meet with your caseworker, you will need to fill out a form indicating what jobs you have sent applications for and to which companies you have gone for job interviews. The Hello Work staff will follow up from there by contacting the companies you have listed.

How much can you collect?

It very difficult to tell how much you will get before your first consultation with Hello Work. Payments are calculated from your previous salary but they are also influenced by your age, career, and reason for leaving.

Usually, you will receive from 50 to 80 percent of your previous salary. If you were earning a high salary before being unemployed then that number will be closer to 50 percent because Hello Work will assume that you should have savings to support you. Those who had a smaller salary will be closer to 80 percent.

Usually, you will receive from 50 to 80 percent of your previous salary.

The length of time that you can receive benefits is also variable. The standard length is 90 days but this can be lengthened depending on the amount that you paid into the system when you were working.

What might stop payments?

Payments are made until you find a job, so obviously once you find one they will stop. If there is a lengthy period between getting the job and your first day of work then the insurance will continue to payout until your first wages come in.

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If the job you are doing is part-time or temporary, this may reduce the amount of insurance that you are entitled to receive  and could even cancel it. According to the Hello Work offices we contacted in Ikebukuro, Shibuya and Shinagawa; if the job you accept is more than 20 hours per week and you could possibly be working there for than one year, they will deem it an “employed” situation and the unemployment  insurance benefits could be stopped (we say “could” because they will look at it on a case-by-case basis).

If the wage at your interim or new job is deemed too small to live off, then the insurance benefits can be provided to help make ends meet.

What about my visa?

Losing your job does not cancel your work visa for Japan — at least not immediately. You have three months to look for a new job in the same field after telling Hello Work that you have lost your job. At the end of this time, however, your visa will be revoked.

Permanent residents and those married to Japanese citizens need not worry about their visas as being unemployed doesn’t affect your ability to stay in the country either.

The unemployment benefits that foreign workers in Japan are entitled to are the same as those afforded to Japanese nationals.

Other options

Higher Education and Studying Japanese

If you can’t find a job within the three months, then there are other ways to continue living in Japan. Many people who can’t work go back into education.

Universities and private vocational schools (such as Japanese language institutes) provide visas to students and often help support them financially through bursaries and help organizing part-time jobs

If you can’t afford to go into private education, the Japanese government does offer basic vocational training courses that least three months to a year, depending on the type of training. Unemployed people are often trained in agriculture, nursing or other areas that have a current shortage of workers.

Unemployment insurance is a fall back for those unlucky enough to find themselves without a source of income.

People can receive a government stipend while on the course but they are very difficult to join for foreigners since they are all conducted in Japanese and often take more than a year from signing up to actual completion. This option is only for those who live in Japan long term and understand the language to an exceptionally high level.

Unemployment insurance is a fall back for those unlucky enough to find themselves without a source of income. Hopefully, none of our readers will ever have to use the system and will remain gainfully employed, but sometimes the world can be unpredictable and it’s good to know that all is not over if the situation ever arises that you lose your job.

If you have any further questions, let us know in the comments. Also check out our previous series on understanding Japanese health insurance and understanding the Japanese pension system to really get a grasp of the  Japanese social security program that you pay into via the deductions from your paycheck.

Jeff W. Richards contributed to this article.

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