Tell me about “social security agreements”.
★ Explanation ★
1. Defining a “social security agreement”
When an affiliated company outside Japan appoints one of its employees to work in Japan, there are cases where they will have to enroll in both the social insurance systems of Japan and their country of origin ― this results in the doubling of their social security contributions. To eliminate the doubled burden on its citizens, countries may enter into social security agreements with each other. The result of such agreements may vary: some may decide that citizens may be exempted from enrolling under one of the contracting states’ social security system; or, in order not to forfeit any previous payments made to one states’ social security system, both states may calculate premiums depending on joining period.
As such, foreign nationals who are transferred to a Japanese corporation or branch from a state that currently has an effective social security agreement with Japan may be exempted from enrolling in Japan’s social security system depending on certain conditions. The terms of Japan’s social security agreements vary depending on the other contracting state. Generally speaking, the working period of the foreign national concerned should not be more than 5 years to be considered exempted from paying social insurance in Japan.
2. Status of Japan’s social security agreements
As of 2018, the status of the conclusion of Japan’s social security agreements are as follows (Table 7-3)
Table 7-3 Status of Agreements with Other Countries
|Implemented||Germany, United Kingdom, Republic of Korea, Belgium, France, Canada, Australia, the Netherlands, Czech Republic, Spain, Ireland, Brazil, Switzerland, Hungary, India, Luxembourg, Philippines|
|Signed (for Implementation)||Italy, Slovak Republic, China|
As mentioned above, the terms of agreements with Japan may vary. In terms of exemptions, there are cases where only one of either health insurance or pension payments is waived, and other cases where both payments are waived. As such, it is best to confirm what are the details of the social security agreement one’s country of origin has with Japan.
The process of applying for exemption for foreign nationals whose country of origin is a contracting state implementing the social security agreement with Japan is as follows:
① Get a “Certificate of Coverage” from your country of origin prior to departing for Japan.
② Submit the “Certificate of Coverage” obtained in ① to the pension office.
It may take some time before one is issued the Certificate of Coverage, so it is advisable to apply for the certificate from one’s local pension office as soon as the appointment has been finalized.
Take note that foreign nationals hired in Japan (locally-hired) are not covered by social security agreements. They will need to be enrolled under Japan’s social security system.