What is the lump sum withdrawal payment applied to Specified Skilled Worker? Explanation of conditions and application methods

What is the lump-sum withdrawal payment system that Specified Skilled Worker can use?

Foreign workers between the ages of 20 and 60 working in Japan are required to enroll in the National Pension, and those who work for corporations and those who work for sole proprietorships with five or more regular workers must also enroll in the Employees' Pension Insurance until they reach the age of 70.
* Click here for information on joining the Specified Skilled Worker pension system.
Specified Skilled Worker Also join the pension system? Explanation of the lump-sum withdrawal payment

In many cases, foreigners working in Specified Skills cannot receive pensions such as old-age pensions if they return home without completing the pension eligibility period of 10 years.

Therefore, a "lump-sum withdrawal payment" system was created so that foreigners would not lose their pension premiums.

There are conditions for receiving the lump-sum withdrawal payment.

Not everyone is eligible, but you must meet the following requirements:

• Not having Japanese nationality
• Not insured under the public pension system (Employees' Pension Insurance or National Pension)
• The total number of months for which insurance premiums have been paid is 6 months or more.
• The period of eligibility for receiving an old-age pension (10 years) has not been met
• Never had the right to receive a basic disability pension or other pension
• Does not have an address in Japan
• More than two years have not passed since you last lost your insured status under the public pension system.

Lump-sum Withdrawal Payment cannot be claimed while a foreign worker is in Japan.
The foreign national making the claim must apply in his or her own country.

Because there is a deadline, it is important to explain things clearly in advance so that claims are not delayed due to busy schedules after returning home.

The maximum period covered by the lump-sum withdrawal payment is 5 years (60 months)

The lump-sum withdrawal payment is calculated based on the premium payment period in Japan.

In 2021, the law was amended, and the upper limit from 3 years to 5 years (60 years).

There is no limit to the number of times you can apply for the lump-sum withdrawal allowance.
For example, if a person who returned to Japan after three years of Technical Intern Training and received a lump-sum withdrawal payment came back to Japan and worked at Specified Skills for two years, he or she could receive another two years' lump-sum withdrawal payment.

Be careful about countries with which you have social security agreements

A social security agreement is a system to prevent double pension payments between Japan and certain countries.

Countries that have a social security agreement are considered to have paid premiums in their home country as well.
Therefore, if you receive a lump-sum withdrawal payment, you may lose the right to receive a pension in your home country.

Before considering applying for a lump-sum withdrawal payment, check if your Specified Skilled Worker 's home country and Japan have a social security agreement.

What is the approximate amount of the lump-sum withdrawal payment (payment amount) that will be returned?

For reference, we will introduce the estimated payment amounts for both the National Pension and Employees' Pension Insurance.

The number used to calculate the payment amount is determined according to the number of months for which insurance premiums have been paid.

What is the amount of the National Pension Lump Sum Withdrawal Payment?

The lump-sum withdrawal amount (for the fiscal year 2024)* for foreigners who were only enrolled in the "National Pension" (for example, those who worked for a self-employed person with fewer than five employees) is as follows:
*Amount paid if the last month of insurance premium payment was between April 2024 and March 2025

What is the amount of the lump-sum withdrawal payment from the Employees' Pension Insurance?

The amount of the lump-sum withdrawal payment for Employees' Pension Insurance is calculated using the following formula.

■ "Average standard remuneration amount" x "Payment rate" (insurance premium rate x 1/2 x number used to calculate the payment rate)

Although it is a little complicated, the "average standard remuneration amount" can be confirmed at the pension office, the "insurance premium rate" is 18.3%, and the number used to calculate the payment rate is roughly the number of months of pension enrollment.

As a concrete example, if you assume that your "average standard remuneration" is 200,000 yen and you have worked in Japan for five years, the calculation will come to a considerable amount, as shown below.

■200,000 × 0.183 × 0.5 × 60 = 1,098,000 yen

By the way, this amount is roughly equivalent to the insurance premiums paid by foreigners over a five-year period.

Please note that 20.42% income tax will be withheld from the lump-sum withdrawal payment, but this can be refunded if you apply for a refund.

How to apply for a lump-sum withdrawal payment for Specified Skilled Worker

To apply for the Lump Sum Withdrawal Payment, you will need the following documents:

1. Lump-sum Withdrawal Payment Application Form
2. Copy of passport
3. Documents that prove you do not have an address in Japan
4. Documents verifying the name of the receiving financial institution, branch name, branch address, account number, and the account holder's name
5. Documents showing your basic pension number (basic pension number notification, pension book, etc.)
6. If a representative is making the request, a power of attorney, etc.

A copy of your passport (passport) in 2 must be a page where you can confirm your name, date of birth, nationality, signature, and status of residence.

Regarding 4, a certificate issued by a financial institution or a bank certificate in the "Bank Certificate" column of the invoice is acceptable.

The application will be made in your home country, but you can prepare your documents while you are in Japan.
Therefore, we recommend that the host company support you in preparing documents for the lump-sum withdrawal payment in the Specified Skilled Worker before returning to your home country.

If it is difficult to provide direct support, you can also ask a professional such as a social insurance and labor consultant.

How to apply for lump-sum withdrawal

Within two years of leaving Japan, the claimant (the person himself/herself or a representative) will submit the documents we have introduced to the Japan Pension Service etc.

Applications can be submitted by mail or electronically, but if you are visiting Japan for purposes other than work (such as travel), you can submit your application in person at a pension office or pension consultation center.

The lump-sum withdrawal payment will be transferred to you after the Japan Pension Service has completed its review.
The payment is expected to be made approximately four months later.

Summary: If you accept Specified Skilled Worker, understand the lump-sum withdrawal payment system

In Japan, foreigners working in Specified Skills status are also required to pay pension insurance.
Since many foreigners return to their home countries before completing the 10-year pension eligibility period, a lump-sum withdrawal payment system is in place to prevent them from losing their payments.

When you apply for a lump-sum withdrawal payment, part of the pension premiums you paid will be paid after about 4 months.

The lump-sum withdrawal allowance is a considerable amount, but not a single yen will be paid unless the foreigner claims it after returning to Japan.
When foreign workers return to their home countries, I think that the employer should explain to the foreigner that there is a system called a lump-sum withdrawal allowance and how to proceed with it, so that they do not forget to receive it.

Companies that accept Specified Skilled Worker should explain in advance that there is a system called a lump-sum withdrawal payment, the details of the procedure, and precautions.

If you are a company that is considering accepting Specified Skilled Worker in the construction industry, please feel free to contact JAC!
We also introduce Specified Skilled Worker.

*This article is based on information as of December 2024.