Japan social security: Pension adjustments and elderly healthcare finances

Japan's social security and pension systems face complex dynamics for the elderly. Under the current rules, individuals aged 70 and older generally cease paying employees' pension insurance premiums. However, those continuing to work at covered workplaces are classified as ‘employees aged 70 or older.’ Consequently, high salary levels can trigger a reduction or suspension of their old-age employees' pension through the ‘earnings-related pension’ mechanism, even if they are no longer paying premiums.

For the 2026 fiscal year, if the combined total of an individual's old-age employees' pension and monthly salary exceeds 650,000 yen, a portion of the pension may be suspended. It is important to note that this suspension applies only to the employees' pension; the old-age basic pension remains unaffected by income levels.

Regarding healthcare, the medical system for the elderly (aged 75 and older) reported a single-year revenue of 18.35 trillion yen for fiscal year 2024. Insured premiums account for only 9.5% of this total, with the largest portion—39.4%—coming from subsidies from the working-age population. The system recorded a single-year deficit of 35 billion yen after settlements, though it maintains a surplus when including carried-over funds.