I. The Scope of Social Security Expenditure

The scope of social security expenditure is based on the ILO (International Labor Organization) standards for international comparison.

The ILO defines Social Security Expenditure as all schemes or services which meet the following three criteria:

( i ) The objectives of the schemes must be to grant benefits for at least one of the following risks and needs: (1) Old age; (2) Survivor; (3) Invalidity; (4) Employment injury; (5) Sickness and health; (6) Family; (7) Unemployment; (8) Housing; (9) Public assistance and others.
( ii ) The system must have been set up by legislation which attributes specific individual rights to, or which imposes specified obligations on, a public, semi-public or autonomous body.
( iii ) The system should be administered by a public, semi-public or autonomous body founded by legislation; or by a private body which has been granted rights to perform legal obligations.
Specifically, the schemes for employment injury compensation are conducted by a private body as the case may be, though it should be included in the scope of Social Security Expenditure.

On the basis of the criteria listed above, the following schemes are included in these statistics: social insurance (including unemployment insurance and employment injury compensation insurance), family allowances, special schemes for public employees, public health service, public assistance, social welfare schemes and aid for war victims.

Social Security Expenditure is based on the above ILO standards and is estimated in each fiscal year budget for expenditure in each system of social security in Japan. The costs shared exclusively by the local authorities such as cities and towns for child and elderly welfare services should be included only if they match with the ILO definitions above. However, they are not necessarily included, due to lack of data from the local governments. Since 1949, the ILO has conducted 19 international inquiries on the cost of social security, and provides social security expenses data submitted by various countries in “The Cost of Social Security” on its Internet homepage.

Social Security Expenditure is divided into “Medical care,” “Pensions” and “Welfare & Others:”

( i ) Medical care” includes costs for medical insurance, the medical care system for latter-stage elderly, medical aid for public assistance, medical services for Workmen's Accident Compensation Insurance, as well as costs related to government-financed special medical services, such as the treatment of tuberculosis and mental disorders.
( ii ) Pensions” includes payments by public pension schemes such as National Pensions and Employee's Pension Insurance. It also includes some cash benefits paid in the form of pensions within the scheme of gratuities for retired public employees, and the scheme for Workmen's Accident Compensation Insurance.
( iii ) Welfare & Others” includes expenses for social welfare services or long-term care, public assistances other than medical services, cash benefits for child allowance, sickness and injury cash benefits within the health insurance schemes, leave compensation benefits paid by the Workmen's Accident Compensation Insurance and unemployment benefits from Employment Insurance. In addition, Long-term care includes long-term care insurance benefits and public assistance long-term care services, atomic bomb victim long-term care insurance system co-payments, partial cost sharing and family-care leave benefits.

The functional classification of Social Security Expenditure sums up benefits for each of the risks and needs included in 1(i) of the above Scope of Social Security Expenditure.

Return to the Contents

Return to the top page of The Cost of Social Security in Japan

Go back to the IPSS top page