9 Ways to Get Financial Aid in Japan During the Coronavirus Pandemic 2020

Must-read article if you're unemployed and in need of living expenses.

With the number of cases rising in Japan, many are worried about their financial situation. Though the government decided to hand over a 100,000 subsidy to every resident in Japan, including foreigners, there are over means to receive support if you are experiencing a loss of income. This list is not exhaustive, but will give you some place to start should you need help.

For individuals

There are several support programs, loans or tax payment assistance that were introduced for individuals who faced a reduction of their income due to the Covid-19 pandemic.

100,000 yen handout
Most of Japan’s residents, including foreigners, already received it. But just in case we recap the main information: any foreigner registered on the resident list as of April 27th, and have carried a visa for more than three months are eligible for the 100,000 yen handout.

The municipality where you are registered should have already sent by mail an application form that you need to fill out and send it back with a copy of the ID and bank information. Those who have a My Number card can also apply online. If you have not received anything yet, please contact your local municipality.

Social Welfare Center Loan
Social Welfare Center can be found everywhere in Japan, and are here to assist people who have problems with welfare or living, whether financially or by giving some advices. With the COVID-19 pandemic, the conditions to apply for a loan were eased to include people who saw a reduction in their income.

There are two types of loans available:

1: Emergency fund
Households that are facing a decrease in income due to the Covid-19 are entitled to up to 200,000 yen. To apply, you need to go to your local social welfare center with a Residence Certificate (juminhyo), your residence card and bank information. You will then need to explain your situation to the receptionist, who will ask basic questions regarding the percentage of income lost during the Covid-19, your employer’s name, the amount of rent you have to pay every month, etc. A loan request will then be sent to the prefectural council. If approved, it will be forwarded directly to your bank account within 2 to 3 weeks

2: General support fund
This loan is for households who have seen a drastic reduction in their income. The amount that can be borrowed is:
Households of two or more people: up to 200.000 yen/month, up to 3 months.
One person: 150.000 yen/month, up to 3 months.

For both types of loans, repayment will be explained during the consultation. In principle, the deferment period for both loans will be one year, and the repayment deadline will be within 2 years for the emergency fund, and within 10 years for the general support fund, to be taken automatically from your bank account. The interest rate is in both cases 0%.

Municipal Welfare Council in Tokyo (in Japanese): https://www.tcsw.tvac.or.jp/shikuchoson/shakyo.html

Welfare Council in other parts of Japan (in Japanese): https://www.shakyo.or.jp/network/kenshakyo/index.html

Housing Security Benefits
An alternative to government-sponsored loans, people who have lost their job or saw a decrease in their income are eligible. A few things to keep in mind:

  • An assessment will be conducted on the household income and savings.
  • This does not cover housing loan repayment, only rent.
  • If approved, from 3 to 9 months of rent will be covered.
  • The city-hall will pay the rent directly to your landlord.
  • A phone consultation, in Japanese, is required. List of call centers.
  • Freelancers and self-employed people are eligible.
  • If you are an employee, you will need documents that prove your current work conditions (hours reduction, changes in shift, etc.).

To benefit from it, contact directly your city hall who will guide you to the necessary procedure.

Electricity / Gas payment extension
Electric and gas companies are extending payment deadlines by one month, and are required to be flexible if payments are delayed. If you cannot pay on time, contact your provider directly.

Injury and sickness allowance
If you work in a company and are infected with the new coronavirus, you can receive a “sickness and injury allowance” to cover medical treatment and losses in income.

You can receive it from the public medical insurance if you are out of work for at least 4 days due to injury or illness, and if your income is reduced during that time.
You are also eligible if you are suspected of being infected and are treated at home, even if it is not confirmed by a test.

To apply:
The allowance will be provided by the Ministry of Health, Labor and Welfare if there is a document of your employer certifying that you could not work for medical treatment.

However, this does not apply if you cannot go to work because other people are being infected at your workplace.
Applications are usually made via your human resources department. For more information about the system and procedures, please contact your employer or your public health insurance.

Residence tax payment assistance
Foreigners living in Japan since more than one year usually need to pay their Residence Tax in the municipality where they have submitted a moving-in notification. You can choose to pay it as a lump sum in June or in 4 installments in June, August, October, and January. It is possible for employees to have the residence tax withheld from their monthly salary, in the same way as income tax, or to pay the tax directly at the municipal office.

However, for those who are having trouble paying it, you can ask to pay monthly or/and to have an extension of the last payment deadline from March to May 2021. Another option is to ask for a 1 year grace period. In that latter case, your payments will be reported but will have to pay two years’ worth of taxes in 2021.

In any case, if you cannot pay your residence tax on time, do not wait and contact your city hall immediately. Failure in making a payment will lead to reminders and, ultimately, to a seizure of your assets. Inquiries can be made directly at your city hall tax information counter.

List of municipal offices in Tokyo: https://www.tokyo-icc.jp/guide_eng/gov/01.html

For companies

Financial aids were also implemented for individual business owners and freelancers. Some of the most popular ones are the following.

Sustainable benefits for freelancers and business owners
There is a “sustaining benefit” when individual business owners, including freelancers, were affected by the number of people refraining from going out, resulting in a significant drop in sales.

With this system, you can receive benefits without the need to repay. You can apply if during any month from January to December sales have decreased by more than half compared to the same month last year. The amount received will be determined according to the decrease in sales. The upper limits are:

  • For individual business owners including freelancers: 1 million yen.
  • For small and medium enterprises and small businesses: 2 million yen.

To apply, you will need to access the dedicated website, enter your e-mail address, and create an account. Then, in addition to basic information such as the company name and bank account information, enter the amount of sales for the month concerned.

Additional documents will be required for application:

  • Documents for last year tax return.
  • A copy of the document certifying the amount of sales for the month concerned.
  • Copy of passbook
  • Copy of my number card and driver’s license

The above documents need to be attached when applying, so images taken with a smartphone are also acceptable.

Inquiries: “Sustainable Benefit Business Call Center
03-6831-0613 (VoIP only)

Only weekdays in August 8:30-17:00

Interest-free and unsecured loans
Interest-free and unsecured loans are available for individual business owners, including freelancers, who suffered a large drop in income. You can borrow money without interest and collateral.

Up to 30 million yen: It is a system to support the cash flow of small and medium-sized enterprises. The target is sole proprietorships including freelancers.

Apart from this, since May, private financial institutions have been able to receive loans with virtually no interest and no collateral by utilizing the system loans of local governments. The upper limit is the same: 30 million yen.

SME finance/benefit consultation counter: 03-3501-1544
Japan Policy Finance Corporation: 0120-154-505 (weekdays), 0120-112-476 (Saturdays, Sundays, and holidays)
Okinawa Development Finance Corporation: 098-941-1785 (weekdays), 098-941-1795 (Saturdays, Sundays, and holidays)

Tax grace and exemption
The government’s emergency economic measures also include tax measures, and in some cases, tax grace and tax exemption may be available.

Grace of tax payment:
For sole proprietorships, including freelancers whose income has decreased significantly, the payment of national taxes such as income tax and consumption tax, and the collection of local taxes such as property tax are postponed for one year.

This applies to cases where revenues has decreased by 20% or more over the past month since February, compared to the same period in the previous year.

In general, when you postpone tax payment or collection, it is necessary to provide collateral, and late taxes and payments are also imposed. However, as a special exception, this is exempted. If grace is granted, social insurance premiums such as pensions and health insurance will also be graced.

Property tax reduction:
For sole proprietors whose sales continue to decline, property taxes and city planning taxes on facilities and buildings will be exempted only for one year in the next fiscal year (Reiwa 3).

From February to October, if the amount of decrease in sales for three months is 30% or more, and less than 50% compared to the same period of the previous year, half will be exempted. In the case of more than 50% decrease in sales, the “full amount” will be exempted.

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