Japan’s Cabinet Greenlit Expanded Child Allowance
Japan’s Cabinet, led by Prime Minister Fumio Kishida, made a move to counter its plummeting birthrate. On Friday, they greenlit expanded child allowance. The reform aims to extend these benefits to high school-aged (16+) children. This is another step forward the slow march of the nation’s approach to family support.
Key Points:
Elimination of Income Limits: The new bill scraps the existing income threshold for benefit eligibility, ensuring broader access to the allowances.
Increased Contributions: Starting fiscal 2026, Japanese residents will contribute an extra 300 to 500 yen ($2 to $3.3) monthly through health insurance premiums to fund the initiative.
Expanded Eligibility: From October 2024, teenagers aged 16 to 18 will be eligible for a 10,000 yen monthly allowance, broadening the scope of support.
Enhanced Support for Larger Families: The allowance for the third child onwards will see a two-fold increase from 15,000 yen to 30,000 yen per month.
Behind the Move:
Ayuko Kato, minister in charge of child policy, emphasized the government’s commitment to providing “seamless support” and enhancing family support & benefits. This policy shift comes as Japan faces a critical juncture. Late marriages, rise of contract work, and economic concerns are driving down birth rates. The Kishida administration views the upcoming years as a crucial window to reverse the downward trend.
Financial Implications:
Despite Japan’s fiscal challenges and an aging population, the government is set to boost its child care spending to 16% of GDP, aligning with Sweden’s high standard of child support. This ambitious plan involves creating a “child support fund.” It aims to collect 600 billion yen initially and hopes to increase this to 1 trillion yen by fiscal 2028.
Additional Measures:
The overhaul also includes increased benefits for low-income single parents with three or more children, and enhanced support for those on child care leave. Furthermore, the government plans to expand access to daycare for children aged 6 months to 2 years by April 2026. They aim to make it available to all, regardless of employment status.
The Bigger Picture:
The stark drop from 2.09 million newborns in 1973 to under 800,000 in 2022 underscores Japan’s struggle with declining birthrates. This comprehensive package aims to ease the financial burden on families. Additionally, it seeks to revitalize the nation’s demographic landscape.
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