Japan Boosts Social Security Benefits and Sets New Minimum Wage Proposal

Japan's total social security benefits for fiscal 2024 rose 2.0% year‑on‑year to ¥138.3 trillion, marking the first increase in three years. Pension spending grew 2.6% to ¥57.85 trillion, welfare and elderly‑care costs climbed 6.2% to ¥35.64 trillion, while medical benefits fell 1.9% to ¥44.81 trillion. Per‑capita benefits reached ¥1.117 million, representing 21.53% of GDP. The government plans to revise out‑of‑pocket medical costs for those aged 70 and older by year‑end to curb rising insurance premiums.

A Japanese government panel has recommended a modest average increase of 55 yen (4.9%) in the minimum hourly wage for fiscal 2026, lifting it to ¥1,176 from ¥1,121. The Central Minimum Wages Council suggested 54 yen hikes for affluent prefectures such as Tokyo and Osaka (Group A) and 56 yen hikes for the remaining regions (Groups B and C), aiming to narrow regional wage gaps and address labor shortages. The proposal reflects a slowdown in consumer‑price growth and follows smaller hikes than in the previous fiscal year.