The Ministry of Health, Labour and Welfare proposes revisions to employment insurance

The Ministry of Health, Labour and Welfare have submitted to the Labor Policy Council's Employment Insurance Sectional Committee a proposal to reexamine employment insurance benefits. This is because the insurance program's reserves are anticipated to be depleted by the end of FY2003.

The proposed revisions focus on lowering the rates of unemployment allowance benefits applicable to high income earners; unifying the number of benefit days between regular and part-time workers to help create a society where diverse working styles are possible; and establishing employment promotion allowances (provisional name); among other programs.

With regard to reexamining unemployment insurance benefits, the minimum benefit rate will be reduced by 10%, from the existing 60% of wages at the time of leaving one's employment, to 50%. The minimum benefit rate for individuals aged 60 to 64 will be reduced from 50% to 45%. Similarly, the maximum daily unemployment allowance benefit will be roughly divided into two categories: (1) 7,310 yen for individuals under the age of 60, and (2) 7,011 yen for individuals 60 years and older. With the unemployment allowances for individuals under the age of 60 being unified to 7,310 yen, the current maximum allowance of 10,608 yen applicable to individuals aged 45 to 59 will also be reduced to 7,310 yen. The maximum rate of reduction is about 30%.

At present, a lump sum is paid, as employment promotion allowance, to individuals who are re-hired early as full-time employees, leaving behind more than one-third of the days they are eligible for receiving unemployment benefits. The plan calls for providing this lump sum even to those individuals who are re-hired under different working setups, including part-time, temporarily dispatched, and/or contract workers.

Both of these programs aim at promoting early reemployment of workers. Although welcoming parts of the proposal as being positive, Rengo feels that the plan overly concentrates on the financial aspect, and lacks any fundamental policy on how employment insurance can be used as a safety net for workers. Rengo also criticizes the lowering of benefit rates, which would drastically impair the function of employment insurance: namely, of assisting a worker in finding a new job while sustaining his or her immediate livelihood.
(Reference: JLF Vol. 24, Special Issue)