Social Security in this blog
Social security in this blog refers to public health insurance and public pension in Japan.
Framework of Japan’s Social Security – Three Tier System
First of all, you have to understand framework of Japan’s social insurance systems. There are three tiers within the framework as follows:
- Tier 1: Public social security for all of residents, who are not an employee, in Japan
- Tier 2: Public social security for employees in Japan
- Tier 3: Private social security as add-on to the Tier 1 and 2, often provided by large corporations for their employees
In the following, let us focus on the first two tiers, Tier 1 and 2, that are applicable to all of resident and employees in Japan.
Difference in Payment for Social Security between Tier 1 and 2
Tier 1 and 2 are different in how you have to pay for social insurance, which are summarized as follows.
- Tier 1: You, an insured person, pay for social insurance by yourself.
- Tier 2: Your employer pays for social insurance of you as an employee, while the amount is deducted from your salary.
Difference in Unit of Enrollment Period
Unit of enrollment period is different between pension and health insurance. Pension enrollment is monthly basis. And employment status on the last day of a month determines which tier you are in and which employer takes care of deduction from your salary for enrollment for the month in case of Tier 2.
Unlike pension, health insurance enrollment is daily basis not monthly. So that employment status for each day determines which tier you are in and which employer takes care of your health insurance. Even though the enrollment is daily basis, payment for health insurance premium is monthly basis. You have to pay for a full monthly premium even if you are enrolled only for a part of the month. This full monthly premium is required: for Tier 1 health insurance if you are enrolled on the last day of a month, for Tier 2 you have to pay for a full month premium regardless of your enrollment on the last day of the month.
Transition between Tier 1 and 2
Because employment status dictates which Tier 1 or 2 you are enrolled with, your enrollment is transitioned from Tier 1 to 2 when you change your employment status from being unemployed or an independent business owner to being employed. Your enrollment is transitioned from Tier 2 to 1 when your chnage your employment status in an opposite direction.
The three scenarios when you change your job
Now, with understanding of the tiers, payment and unit of enrollment period, the three scenarios in the previous blog post (see below for summary) are illustrated in the slide show below.
- The most preferred scenario: No interruption at all, even for a day.
- Less preferred scenario: Interruption not going beyond month-end.
- The least preferred scenario: Interruption going beyond month-end.
What to do when you have interruption?
In spite of the preference order among the three scenarios, you may end up inevitably having interruption between two employments when you change jobs. The next blog post describes what you have to do under such circumstances.