Japan Agreement and foreign pension information 106-04038000

In Japan, national legislation requires the compulsory payment of social security contributions, usually through deductions from paid employment.

Contributions insure individuals against unemployment, disability and death and provides for income in the form of a pension once the person reaches retirement age.

The public pension system covers residents, most workers and some self-employed.

The legislation is the responsibility of the Japanese government but administration and payment of insurance pensions is the responsibility of the central pension service and the various employee pension funds.

Public assistance programs provide benefits for those with low incomes, generally managed by regional governments.

The Agreement with Japan started 1 January 2009. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Japan:

厚生労働大臣 - Ministry of Health, Labour and Welfare

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Japan:

日本年金機構 - Japan Pension Service

Note: funds for public servants, local officials and private school employees are also included.

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Japan:

日本年金機構 - Japan Pension Service.

Under the Agreement with Japan, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement (Article 23.2).

To allow broader information exchange, the Japanese claim form includes an authorisation for the Japanese liaison agency to notify Australia in all cases. A mail-out for customers in receipt of Japanese pension was undertaken at the start of the Agreement. The authority to exchange information must be recorded at the time claims are sent to Japan. See the Claims, forms and processes.

For more information on bulk data exchange, see International Data Exchange Program and auto-indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to Japan:

• AUS187JP - Australia/Japan Agreement on Social

For help with creating and completing the liaison form, see: Agreement liaisons, NZ CICs and exchange of information.

The following liaison form is completed by Japan and sent to Centrelink International Services (CIS).

日本の連絡票 - Liaison Form from Japan (J/AU3)

This form is used in all communication from Japan.

• Section I - Information about the claim: provides information about the claim and claimant
• Section II - Confirmation of Data: certifies personal details of the claimant
• Section III - Information provided: details information provided by Japan
• Section IV - Information Needed: details information requested by Japan
• Section V - Remarks: free text and certification by Japanese liaison agency
• Section VI - Certificate for Periods of Coverage: certifies Japanese periods of coverage in months and total
• Section VII - Information on result of claim: provides details of the decision on Japanese claims.

Note:

• The Japanese Liaison Form provides annual rates during the arrears period and 2-monthly rates for the ongoing pension but must be coded as annual
• The Japanese liaison agency will not respond to requests for Japanese periods of coverage unless the customer has completed the Japanese Claim for Verifying Periods of Coverage (AUS/J4) form, which gives the Japanese liaison agency express permission to release information to Services Australia

Australian Disability Support Pension (DSP) is not covered by the Agreement.

Although Japanese invalidity pension may be claimed in Australia, it is not covered by the Agreement. Policy advice is that there is no requirement to pursue a claim.

The Agreement with Japan includes double coverage provisions. Certificates of coverage are used to confirm exceptions.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in the other country
• In Australia - the Australian Taxation Office (ATO) website

See general information on taxation, including issuing Australian payment summaries.

Tax treaty

Australia has a double tax agreement with Japan, which avoids the need for the customer to pay tax in both countries.

A person who is 'resident' in one country (according to the definition in the tax agreement) generally only pays tax on pensions in that country.

Tax deductions from income by one country may be used as a credit against tax payable in the other country.

Tax deduction

Japanese pensions may be taxed at the source (源泉徴収票 / 税額).

The gross rate of Japanese pension, before any deduction, is maintained.

Japanese tax year

Japan uses the calendar year (1 January - 31 December) as the tax year.

Australia does not have a Reciprocal Health Care Agreement (RHCA) with Japan.

See general information on health insurance and Medicare coverage.

Any queries about:

• Health insurance coverage in the other country – tell the customer to contact the health insurance authority in the other country, and
• Medicare coverage - direct them to Medicare

Pensioners in Japan may have a health insurance deduction (介護保険 / 医療保険) taken out of their Japanese pension.

The gross rate of Japanese pension, before any deduction, is maintained.

The official language of Japan is Japanese.

See Japanese naming conventions and pronunciation.

Telephone country code is + 81

Street address

Title FirstName Surname [Addressee]

10–23, Mitsugi 1–chome [Block number + Premise number + District name and block number]

Musashi-Murayama-shi [Prefecture, Municipality]

TOKYO 231–0012 [Locality, postcode]

JAPAN

Rural address

Title FirstName Surname [Addressee]

2338 Magatake [Premise number + District name]

Zaou-machi, Katta-gun [Town, village]

MIYAGI 989–0851 [Locality, postcode]

JAPAN

Note: in Japan, the address is generally written on a single line, beginning with the largest geographical area and ending with the smallest one. This is reversed from what is typically used in Australia and many parts of the world.

Japan has adopted the western style calendar in the form of year/month/day but some notices may use the traditional Imperial calendar where the year reflects the reign of the emperor.

The current era, Reiwa (令和) began on 1 May 2019 so 2019 is the first year of the period. Using this format, the date 1 May 2019 may be written as 1/5/1, R1/5/1, or 令1/5/1.

Note:

• The previous era, Hesei (平成), lasted for approximately 30 years from 08 January 1989 to 30 April 2019. For reference, 7 January 2000 may be written as 12/1/7, H12/1/7 or 平12/1/7
• If necessary, the, Shōwa (昭和), lasted for 64 years from 25 December 1926. For reference, 7 January 1989 may be written as 64/1/7, S64/1/7 or 昭64/1/7.
• It is not appropriate to refer to a current emperor by this name as it technically only applies posthumously.

Japan does not recognise same sex relationships.

For Australia, the Agreement with Japan (Article 2.1) covers:

• Age Pension

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in Japan can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the Japanese authorities

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140JP - Australian Pension Claim – Social Security Agreement between Australia and Japan
• Mod(IA)JP - Income and Assets - Japan

Forms can be lodged at any Japanese social security office.

Under Section 2 of the Administrative Arrangements, the Japanese liaison agency will:

• accept and date stamp the AUS140 form
• not verify the customer’s identity and personal details
• send the form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of coverage in Japan and information regarding Japanese pensions

Note:

• The Japanese liaison agency will not verify the customer’s identity, however, if the Japanese liaison agency provide confirmation the customer is in receipt of a Japanese pension, their identity is considered to be confirmed
• Where the identity is not confirmed in this manner, Australian claims lodged in Japan will need to have identity verified using the legacy Proof of Birth/Proof of Arrival and 100 points of identity documentation model.

See Exchange of information and liaison forms.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident, a resident of Japan or another Agreement country that accepts claims for Australian pension under another agreement (Article 14(a)), and
• physically present in Australia, Japan or that third country (Article 14(b))

Note:

• Although a customer may be able to claim a payment while resident or present in a third country, they cannot be paid unless the Agreement also allows them to be portable
• For example, the Agreement with Chile allows the same as normal portability so, as Disability Support Pension (DSP) is generally only portable for limited temporary absences, a person who is not resident in Chile is not portable. This means the DSP claim would be rejected

Claims under the Japanese Agreement

Claims for Australian payments under the Japanese Agreement may be lodged in certain other Australian Agreement countries.

See the Claim lodgement matrix.

Accepting other Agreement claims

Japan will not accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

There are no specific considerations under the Japanese Agreement.

The normal rules for working out the date a claim is ‘made’ and the start day apply to a claims under the Agreement with Japan. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Japan to be used as the date of lodgement in Australia (Article 20.1)

For coding help, see:

• Claims for Australian payments under International Agreements) and
• Start Day (CLK)

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of coverage in Japan to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 15.1)
• the total of any non-continuous periods of coverage in Japan to be considered to be continuous to meet any continuous residence requirement to qualify for an Australian pension (Article 15.2)

Note:

• Overlapping Australian residence and Japanese periods of coverage are only counted once (Article 15.3)
• Adjoining periods of Australian qualifying residence and Japanese periods of coverage, with a break of up to 3 months in between, can also be considered to be continuous (Policy)

See Resources in International Social Security Agreements for examples of totalisation.

Japanese period of coverage:

• means a period of contributions, for example, a period during which contributions were paid, or any equivalent period, as defined in the Japanese legislation
• where equivalent periods may include deemed periods such as for child rearing
• where both actual and deemed periods may be used when totalising for Australian qualification purposes, as long as they are certified, and don’t overlap
• must be certified by the Japanese Competent Institution

The Japanese liaison agency will not respond to requests for Japanese periods of coverage unless the customer has completed the Japanese Claim for Verifying Periods of Coverage (AUS/J4) form, which gives the Japanese liaison agency express permission to release information to Services Australia.

Where a customer has provided a completed and signed AUS140 form, permission is implied for a Japanese resident claiming an Australian payment. For all other cases, information may be obtained directly from the customer.

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) in Australia of which 6 months must be continuous (Article 15.4(a)).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is required if the person is an Australian resident at the date of lodgement (Article 15.4(b)).

Customers residing in Japan do not meet the ongoing residence requirement for DSP.

For customers outside Australia, the Agreement with Japan (Article 16.1) refers to the overall rate calculation contained in section 12(1) of the Social Security (International Agreements) Act 1999.

This means customers paid under the Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied
• additional child amounts (s14a SS(IA) 1999) included, if eligible
• their Japanese pension proportionalised (Randisi concession) for use in the income test using denominator of 300 (Article 16.1).

Note:

• In some circumstances their partner’s WLR may be used. See Working Life Residence (WLR)
• Autonomous customers who are paid a proportional rate and in receipt of a Japanese pension will also have the Randisi concession applied to their Japanese pension (Article 16.2)

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia.

Returns to Australia

The proportional rate continues to apply for the first 26 weeks of a temporary return to Australia (Article 16.3).

• For returns to Australia before 9 June 2018, manually code the Temporary Return to Aust Ind on the Residence Savings (RSS) screen.

Customers in Australia under the Agreement are paid a direct deduction rate (Article 16.4).

The Agreement does not include a comparison rate in Australia.

Departures from Australia

The inside Australia rate continues to be paid for the first 26 weeks of a temporary departure from Australia (Article 16.5).

Payments under the Agreement

Under the Agreement, provided the customer remains qualified, Australian Age Pension is payable indefinitely in Japan (Article 5.1).

Third country portability under the Agreement

Portability to third countries for a customer paid under the Agreement is the same as for an autonomous Age Pension customer leaving Australia (Article 5.2). See Portability of payments.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement, and
• the customer is able to meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfers to international social security agreements.

A person who has sufficient Australian qualifying residence (or an exemption) can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer to from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia.

Customers who transfer to autonomous may be affected by the former resident provisions if they leave Australia again within 2 years of becoming an Australian resident.

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country.
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks.

See Delivery of payments to Centrelink customers outside Australia.

For Japan, the Agreement covers the National Pension (国民年金), Employees’ Pension (厚生年金) and other insurance for public servants, local officials and private school employees.

Main payment

• 老齢年金 - Old Age Pension (AGE)
• Includes Basic Pension and Employees’ Pension but does not include Old Age Welfare Pension (老齢厚生年金)

The following known payments are paid by the Japanese authorities but are not covered under the Agreement:

• 障害年金 - Disability pension
• 遺族年金 - Survivor pension
• 死亡一時金 - Japanese Death benefits
• Assessable lump sums

For help with:

• Assessment of Japanese pensions, see Assessment
• Coding of Japanese pensions, see Eligibility and Coding

The requirement to claim Japanese pensions applies to Japanese AGE.

Note:

• Customers may claim Japanese INV or SUR voluntarily
• Customers who wish to voluntarily claim Japanese INV or SUR must be directed to the Japanese liaison agency. See Exchange of Information and liaison forms

See Foreign pension claims.

Eligibility and coding of foreign pensions tab contains detailed information on Japanese payments that are subject to CFP legislation.

Claim pack is available: AGE.

Claim packs are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Note: customers who wish to voluntarily claim Japanese INV or SUR must be directed to the Japanese liaison agency. See Exchange of Information and liaison forms.

Specific requirements for Japanese claims

The customer is to complete and provide the following:

All claims:

• 国民年金・厚生年金保険裁定請求書（を支給事由とする年金給付）(共済年金決定請求書兼用) - Claim for National Pension/Employees' Pension Insurance (For Old Age Pension) (Also for use for the Mutual Aid Pension) (AUS/J1)

The customer must complete the declaration in the claim form that authorises exchange of information between the two institutions.

Requests for additional information

If information provided with the claim for Japanese pension is incomplete, Japan will send requests for information in Japanese direct to customers.

Employment periods

Under the Agreement with Japan ((Article 1.1(g)), periods of employment or self-employment in Australia during periods of working life residence (WLR) must be confirmed. See Working Life Residence (WLR).

The Verification of working life residence and periods of employment in Australia (AUS027JP) form is included in the foreign pension claim pack for the customer to provide employment details.

Receipt of foreign pension claim by Services Australia

Under the Administrative Arrangements, Japanese forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• All foreign pension claims and supporting documentation must be scanned, and
• The original foreign claim form and copies of supporting documentation must be sent in paper form to Centrelink International Services (CIS). See Processing a foreign pension claim

Centrelink International Services (CIS) only:

CIS will complete the following or arrange for the following to be completed as necessary and attach the documents to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

All claims:

• AUS187JP - Australia/Japan Agreement on Social Security

For assistance with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

Enquiries regarding claims for Japanese payments in Japan or a third country should be directed to the Japanese social security authorities.

Japanese payments may be paid by direct deposit in Australia.

Any queries about the non-payment of Japanese pension should be directed to the Japanese pension authorities..

Agreement pension is paid every 2 months. Statements may provide either 2-monthly or annual lump sum amounts.

Othe benefits or private pensions are paid monthly.

Japanese pensions must be recorded in the source currency – Japanese Yen (JPY). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollar amount.

Note: payments onto Australia are made in Australian dollars.

Japanese payments are generally increased for Consumer Price Index (CPI, or cost of living) from 1 April each year but are only received in the June payment.

For more information on bulk exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 16.4) and ignored in the income test for customers paid by virtue of the Japan Agreement who are in Australia
• proportionalised and assessed as ordinary income (Article 16.1) for customers paid:
• under the Japanese agreement who are outside Australia
• autonomously who are on a long-term outside Australia rate
• ordinary income (not proportionalised) for customers paid:
• autonomously who are inside Australia
• under another agreement other than Japan or New Zealand who are inside or outside Australia

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note:

• Each member of a couple is deemed to receive half of the total amount received by the couple (Article 16.6)
• Whilst Disability and Survivor pensions are not covered under the agreement for totalisation or CFP purposes, it is affected by agreement rate calculations

• 障害年金 - Disability pension
• 遺族年金 - Survivor pension
• Assessable lump sums payments

Japan may pay lump sums in lieu of pension.

Foreign non-remunerative lump sums are assessed as ordinary income for 12 months from date of receipt (s1073 Social Security Act 1991). See Treatment of lump sums.

Where a customer is granted a lump sum payment in lieu of an on-going pension payment: If the customer has a claim in progress on the FGS screen, FGD screen must be updated to FIN-NOM when FID coding is completed.

These payments are exempt income for customers paid under the Agreement or autonomously

• 死亡一時金 - Japanese Death benefits

Death benefit may be exempt from the income test if payable as a reimbursement to the person who incurred expenses associated with the bereavement.

Otherwise, the amount is assessed as ordinary income for 12 months from date of receipt (s1073 Social Security Act 1991). See Treatment of Lump Sums.

The Agreement does not include embargo provisions.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable Foreign Payment (CFP) lump sum arrears debts.

A contravention debt may also occur if the customer does not advise of the grant of their Austrian payment within their notification period. See Foreign pension coding.

The Japanese liaison form provides annual rates during the arrears period and 2-monthly rates for the ongoing pension but must be coded as annual.

When an arrears period is not provided, the arrears period end date may be assumed to be the end of the month prior to the period for which the first regular 2-monthly payment is paid.

Note:

• Care must be taken with other statements as these are remittances and may reflect a lump sum, ongoing amount or combination of both
• See assessable lump sums payments for lump sum amounts that are not considered to be foreign pension, for example, refunds of contributions

Life certificates are not used by Japan.

The Japanese pension authority does not authorise Australian proof of life certificates.

Customers in Australia are sent notices at grant and will receive an annual statement each year.