Japan considers early payment of part of benefits in 2029 — The Japan Times
The Japanese government is considering paying part of the assistance under a planned income-linked program as early as April 2029 instead of September. The move is intended to reduce the financial burden on households after the planned restoration of the consumption tax rate on food products to 8%, The Japan Times reports, citing informed sources.
Two payments in 2029
The financial assistance program is planned to be launched in fiscal 2029. A payment in April could become part of the assistance for the entire fiscal year, which begins in the same month. According to the sources, the government intends to transfer the remaining funds around September 2029.
Normally, payments under the program are planned for around September each year, after calculations of recipients’ income for the previous year have been completed. However, in fiscal 2029, households would have had to wait for assistance until autumn after the food tax rate returned to 8%, so authorities are studying the option of a partial early payment.
Restoration of the tax rate
Starting in fiscal 2027, Japan plans to reduce the consumption tax rate on food products from 8% to 1% for two years. In April 2029, the rate is to be restored to its previous level.
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Implementing a two-tier payment schedule requires the consent of local authorities, as it would increase the administrative burden. If it is obtained, the central government and the ruling coalition plan to include the relevant decision in the tax reform package concerning the reduction of the food tax rate.
Last month, the government decided to introduce a full-fledged assistance program for low- and middle-income workers after the two-year tax reduction ends. The size of the payments and income thresholds for participation in the program have not yet been determined.
Prime Minister Sanae Takaichi said she takes responsibility for restoring the rate to 8% in two years. She also believes that the assistance program will have a greater effect than reducing the consumption tax.
