What is the lump-sum withdrawal payment that applies to specified skilled workers? Conditions and application procedures explained

What is the lump-sum withdrawal payment system that specified skilled workers can use?

Foreign workers between the ages of 20 and 60 working in Japan are required to join the National Pension System, and those who work for corporations and sole proprietors with five or more regular workers are required to join the Employees' Pension Insurance until they reach the age of 70 in principle.
* Click here for information on joining the specified skilled workers pension system.
specified skilled workers Will I join the pension plan? Explanation of lump-sum withdrawal payment

In many cases, foreigners working in Specified Skills return to their home countries without meeting the 10-year eligibility period for pensions and are unable to receive pensions such as old-age pensions.

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

In 2021, the law was amended to increase the upper limit from three years to five years (60 months).

There is no limit to the number of times you can apply for a lump-sum withdrawal payment.
For example, if a person who has completed technical intern training for three years and returned to Japan and received a lump-sum withdrawal payment, but returns to Japan and works at Specified Skills for two years, he or she can receive another two-year lump-sum withdrawal payment.

Be careful about countries with which you have social security agreements

The Social Security Agreement is a system to prevent double payment of pensions between Japan and certain countries.

Countries that have social security agreements are considered to have paid insurance premiums in their home countries.
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 to see if your specified skilled workers '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 specified skilled workers to receive a lump-sum withdrawal payment

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 the passport (passport) in 2 must have a page that can confirm your name, date of birth, nationality, signature, and status of residence.

Regarding 4, it can be a certificate issued by a financial institution or a bank certificate in the "Bank Proof" column of the invoice.

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

If it is difficult to provide direct support, you can also request a specialist such as a labor and social security attorney.

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 workers, understand the lump-sum withdrawal payment system

In Japan, foreigners working with a status of residence of Specified Skills are also required to pay pension insurance.
Since there are many foreigners who return to their home countries without meeting the 10-year eligibility period for receiving pensions, a lump-sum withdrawal payment system has been established so that they do not lose money.

If you apply for a lump-sum withdrawal payment, a portion of the pension insurance premiums you paid will be paid after about four months.

The lump-sum withdrawal payment will be a considerable amount, but not a single yen will be paid unless the foreigner himself or herself makes a claim after returning to Japan.
When a foreign worker returns to his or her home country, the employer should explain to the foreigner that there is a system called a lump-sum withdrawal payment and how to apply for it, so that he or she does not forget to receive it.

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

If you are a company in the construction industry that is interested in accepting specified skilled workers, please feel free to contact JAC!
We also introduce specified skilled workers.

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