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Income wall for dependents (Social Insurance)

Want to know more about Social Insurance in Japan? Check out our video and get in touch with us at Seventh Sense Group!

The term ‘dependent’ is used for both tax and social insurance purposes, and there are different income thresholds for tax dependents and social insurance dependents. Today we will introduce the income wall for social insurance dependents.

In Japan, everyone, regardless of nationality, is required to enroll in [ National Health Insurance and National Pension Insurance] or [Employees’ Health Insurance and Employees’ Pension Insurance (the latter two systems are collectively known as Social Insurance)]. National Health Insurance and National Pension Insurance are for people who are not covered by Social Insurance, and this includes sole-proprietors and freelancers. Social Insurance is for people who are employed by employers who are obliged to enroll their employees in Social Insurance.

Dependent for Social Insurance

One of the benefits of being enrolled in Social Insurance is that your family member can become your dependent for health insurance and, if they are your spouse, they can become a dependent for pension insurance, although there are certain conditions that must be met in order to become dependent. If they meet the conditions, their health insurance premium will be waived. If the dependent is your spouse, their pension insurance will also be covered.

Income Wall

The income threshold is one of the conditions for being a dependent mentioned above.

The upper limit for the income of dependents is 1.3 million yen in a year, which is called “130 Manen Kabe” in Japan.

If a dependent’s annual income exceeds 1.3 million yen, they must be removed from dependent status and enrolled in their own insurance.

If the dependent hasn’t cancelled their dependent status

If the dependent wasn’t aware of the excess income, they may run into a number of problems, such as paying the premium for periods when they should have been separately insured or, if they received medical services that were partially covered by Social Insurance, the difference between what they paid and what they should have paid in medical fees.

If you wish to know more about Social Insurance in Japan, please do not hesitate to contact us at Seventh Sense Group!

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