Everything You Wanted To Know About Not Paying Pension

pension attack 00As three wise monkeys once said: "See no pension, speak no pension, pay no pension"

The topic of pension (and pension contributions) is one that tends to attract strong opinions - much to the dismay of people who would rather not think about it at all.

However, like it or not, the pension system is here to stay - so here's everything you ever wanted to know about not paying (kokumin!) pensionbad time


Please note that, as stated, this Q&A specifically refers to Kokumin Nenkin (National Pension). 

It should not be confused with Kosei Nenkin (Employee Pension - included as part of Shakai Hoken/Shigaku Kyosai).

Kokumin Nenkin was basically established to cover small business owners and the unemployed.

However, in these days of increasing non-regular employment, it also covers a lot of employees who work fewer than 20 hours per week in bigger companies and 30 hours per week in smaller companies.


Data from the Statistics Bureau of the Ministry of Internal Affairs and Communication (.xls) put the rate of contribution for National Pension for FY2005 at 67.1%, FY2010 at 59.3%, FY2012 at 59.0%, and FY2013 at 60.9%.

As for FY2017, according to ZUU online, additional information from the Ministry of Health, Labor, and Welfare (MHLW) put the rate of contribution at 63.2%.


- ZUU Online

However, as Zuu online points out, once exemptions and students are considered, the actual contribution rate might be closer to just 40%!


There are two primary factors that help to explain the recent uptick in pension awareness and the potential consequences of non-payment:

The income criteria for forced collection of pension arrears has been reduced.

Prior to FY2015, the income criteria for forced collection was that an individual had to earn at least 4.0 million yen per year.

In FY2016, the criteria was reduced to those earning at least 3.5 million yen per year.

In FY2017, it was lowered once again to those earning at least 3.0 million yen per year - but even those who earn below 3.0 million yen per year may still find themselves in the Japan Pension Service's sights.

The amount of time an individual can remain in arrears was reduced.

Prior to FY2014, a grace period of seven months was given to people earning at least 4.0 million yen per year, while a grace period of thirteen months was given to those earning at least 3.0 million yen per year.

However, as of FY2018, the grace period for those earning at least 3.0 million yen was reduced to seven months, essentially making seven months the standard for everyone.


The implementation of the "My Number" system is thought to have had some impact on the increased awareness of pension contributions (or, rather, the consequences of not contributing).

However, it's estimated that only 10% of the population currently use the system, so how much "My Number" is assisting the Japan Pension Service in reality (versus perception) is somewhat questionable.

On the other hand, 10% of 69,675,000 (the 20-65 demographic) is still 6,967,500 people.

From a political and/or economic angle, Japan's "aging population" issue may also be an impetus for the Japan Pension Service's increased determination to collect pension arrears.

As the median age of the population increases, so too does the burden of keeping the pension system ticking over - and an increasingly older population means that more and more people will be drawing pension than other before - and that means that the younger generations have to pay for it.

Therefore, it's easy to see why the government might be keep to make sure that those who should be contributing to the system are actually doing so.

It's also important to consider the role of social media in raising awareness of pension issues and consequences.

Perhaps little more than ten years ago, pension misadventures might be something you'd only hear from a friend (of a friend of a friend).

Thanks to the power of the Internet, now everyone and their dog can tell the world about how the Japan Pension Service took all of their money.


We all know someone (who knows someone who knows someone) who has been living in Japan for years or decades, but who has never contributed anything to the pension system without facing any consequences.

The tales often vary: some people get reminders but ignore them; other people claim that they've never heard anything from the Japan Pension Service at all.

However, on social media websites such as Facebook and Reddit, more and more people are writing about receiving reminders and final notice letters from the Japan Pension Service, or even having assets and property seized, are becoming more and more common. 

pension attack 02

As we've already mentioned, a major part of this is that the income criteria and grace period for arrears were reduced, meaning that people who may have previously gone unnoticed (including some dispatch company ALTs and eikaiwa teachers, for example) are now appearing on the Japan Pension Service's radar, even though their individual circumstances may not have changed compared to previous years of residence.

Just how many people per year does the Japan Pension Service pursue, though?

On May 5th, 2017, the MHLW issued a press release (.pdf) that tells us exactly how many Final Notice Letters (最終催告状), Collection Notices (督促状), and Property Seizure Notices (財産差押) were sent out in FY2015 and FY2016:

Collection Notices 43,757 50,423
Final Notices 84,801 85,342
Property Seizure Notices 7,310 13,962

While the number of final notices has remained relatively stable, we can see that the number of collection notices sent between FY2015 and FY2016 increased by 6669, whereas the number of property seizure notices more than doubled.


Yes, they are.

Whenever the issue of pension is raised, there are often a few dissenting voices within the crowd who claim that there's no actual law that says that anyone has to pay into the system.

As much as people would like to pretend that pension is optional, the National Pension Act (1959) is a real law which states that all registered residents of Japan aged 20 to 59 years, regardless of their nationality, must be covered by the National Pension system.

Those enrolled by their employer in Shakai Hoken/Shigaku Kyosai are, by default, already enrolled in the National Pension.

Pensions for those enrolled in Shakai Hoken/Shigaku Kyosai are made up of two parts: (1) National Pension and (2) Kosei Nenkin).

However, if you're not enrolled in Shakai Hoken/Shigaju Kyosai, the responsibility of paying pension is on you alone.


As of FY2018, the contribution amount for the National Pension is ¥16,340 per month.

Payment of the contribution is only voluntary for (registered) residents of Japan aged 60 to 64, and Japanese citizens (aged 20 to 64) who reside in a foreign country.

It's possible to get exemption from having to pay pension contributions, but that's beyond the scope of this article and (often) not easily attainable.

If you're interested in pension contribution exemptions, however, please refer to the Japanese Pension Service's English pamphlet about the Japanese National Pension System at the following link: Japanese National Pension System (.pdf).

Alternatively, please see the General Union's own articles on the topic: General Union Pension Articles


We've heard it said that, even though national pension contributions are mandatory, there's no actual consequence for not paying into the system.

In these cases, the Japan Pension Service is often likened to NHK - all bark, but no real bite.

While it's true that there are no fines issued against people for non-payment per se, the Japan Pension Sevice will absolutely seize assets - financial and property alike - in order to recover arrears.

pension attack 01

If you woke up one morning to find that ¥400,000 was missing from your bank account, you would probably consider that to be a fairly serious penalty.

Suffice to say, while you're unlikely to be arrested over the issue, there absolutely is a penalty for non-payment - even if the hammer never personally falls on you.


According to statistics from e-Stat, "the portal site for Japanese Government Statistics", the number of people in Japan aged 20 and 65 (the pension paying demographic) in FY2017 is around 69,675,000.

As previously noted, the Japan Pension Service issued a combined 149,727 pension notices to people who were in arrears in FY2016.

Considering the MHLW statistics, only 44,545,000 (63.2%) of those people are contributing to the National Pension system - meaning that 25,640,400 (36.8%) "defaulters" aren't paying anything at all.

Assuming that the Japan Pension Service doesn't follow a set notice progression (i.e. reminder notice -> final notice -> seizure notice), if you're among those 36.8% of defaulters, you have about a 1 in 171 chance (per year) of being sent any kind of notice at all.

If, however, the Japan Pension Service does follow a set notice progression, you have about a 1 in 508 chance (per year) of being sent the initial reminder notice.


Generally speaking, the Japan Pension Service will demand up to two years of arrears from people.

Therefore, in theory, no matter how long you've evaded paying pension contributions, the most that they will demand in back-payment is around ¥392,160 (¥16,340 x 24, using the FY2018 rate).

However, it's important to note that this is only an anecdotal estimate - the Japan Pension Service may levy additional fees against you.

In addition, the Japan Pension Service may inform your place of work of your pension delinquency in an effort to pressure you into paying what you owe, and may even send collectors to your home.


It should be noted that, if the Japan Pension Services finally catches up with you and demands (or seizes) two-years of back-payment, any debt that you owe above those two-years of arrears will not go away.

For example, if you have lived in Japan for ten years and are forced to pay two years of arrears at the end of the tenth year, you will still have eight years of debt logged in your overall pension history.

The consequence of this debt are as follows:

・Should you retire in Japan, you will only be eligible to receive a fraction of the pension benefits that you would have otherwise been eligible to receive had you been fully paying into the system.

・Should you leave Japan and wish to take advantage of the lump-sum pension withdrawal payment, you may find that the Japan Pension Service will seize that lump-sum payment to offset any previous gaps in pension contribution.

・If your country of origin has an International Social Security Agreement with Japan, your non-payment of pension in Japan will affect your coverage in your native country.

If you're worried about previous gaps in pension payment affecting your future, you do have the option of retroactively paying off those arrears.


The postcard that the Japan Pension Office sends out from time to time will usually tell you which months (and which years) you haven't contributed anything to the pension system on.

Failing that, if you register on the Japan Pension Service website (www.nenkin.go.jp), there is a service that will let you see which months you've contributed on, which months have been exempted, and which months are in arrears.

However, as the service is entirely in Japanese, some knowledge of the language is required.


From what we understand, the Japan Pension Service will allow retroactive exemptions to months that are in arrears if you can prove that you qualified for an exemption during that period.

You will more than likely need bank statements and/or salary information to be able to demonstrate your income level during that time, however.


Here's a quick guide that you should follow whenever the topic of pension comes up.

Whenever anyone says that you don't have to pay into the pension system (for whatever reason), they're either:

a) ignorant
b) a liar
c) all of the above

We've heard of people being told...

・that there are no laws that say that foreigners have to pay pension;
・that pension is only for Japanese citizens;
・that people "don't qualify" for pension;
・that people are exempt from pension if their company doesn't enrol them;
・many other variations on these themes.

These are all lies.

As we've mentioned, pension contributions are mandatory by law, and - no matter what anyone else has told you - the ultimate responsibility for pension contributions rests with you alone.

pension attack 03

We need to stress this because, if you were to seek exemption from pension contributions (past or present) or if you find yourself attempting to negotiate a payment plan in order to avoid having assets seized, saying "I didn't know" is one of the absolute worst things that you could do.

It is far better to admit that you didn't pay pension contributions because of financial difficulties, a misleading employer, or a general lack of knowledge about who to turn to to deal with this issue.


The General Union recommends that you should pay your pension contributions.

Even if you don't plan on staying in the country forever, you can apply for the "Lump-sum Withdrawal Payment" (.pdf) within two years of leaving Japan.

If Japan has an "International Social Security Agreement" with your country of origin, then pension contributions in Japan will also count towards your pension in your home country (e.g. one year of pension in Japan = one year of pension in the United Kingdom).

If you can't contribute to National Pension due to low income, we encourage you to apply for an exemption at your local municipal office.

If you haven't been paying pension and the Japan Pension Service has sent you a reminder notice, we also encourage you to settle things with the Japan Pension Service as soon as possible, instead of betting your bank balance on the idea that "it'll never happen to me".

Of course, there are many personal reasons (be they financial or political) as to why someone might not want to contribute to the pension service.

We also understand that, for some people, ¥16,340 might mean the difference between breaking-even for the month or not having money to buy food for a week until you get paid.

Your reasons for not paying are your own, and you don't have to justify them to anyone (except the Japan Pension Service); but it's important to admit responsibility for those reasons if you find yourself in trouble with the government.

Of course, if companies actually paid a livable wage so that people could afford pension, and if the government decided to crack down on shakai hoken non-enrollment so that pension was automatically deducted from people's salaries, then Japan would find its pension burden easier to manage.

However, that's a rant for another day...

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