Entering semi-retirement - what now?

[Kiro]

If you agreed with your employer to make it so it was their decision, rather than you leaving, and you register to hello work for unemployment benefits, you can then bring the paper they give you to the city hall in order to get the health insurance down to 30/100 for about a year.
I’ve used this twice in the past (employer’s decision), and the health insurance ended up being quite cheap.
Well, 30/100 (if think it’s something like your previous year salary is counted at 30% for calculating the amount due).

[hawkmoon99]

If you agreed with your employer to make it so it was their decision, rather than you leaving, and you register to hello work for unemployment benefits, you can then bring the paper they give you to the city hall in order to get the health insurance down to 30/100 for about a year.
I’ve used this twice in the past (employer’s decision), and the health insurance ended up being quite cheap.
Well, 30/100 (if think it’s something like your previous year salary is counted at 30% for calculating the amount due).

Yes, my whole division globally was closed down, so a no fault dismissal.

This is good news on the price negotiation and I hope I can get a reduction on the HC bill.
Unfortunately (fortunately?) my salary was pretty high, so my current responsibility is high

Regarding company vs public insurance, I heard back from my HR rep and my HC costs were as follows:

• Me: 39,370
• Company: 62,230

- so no saving in extending that option.

Not looking forward to 200,000+ per month obligations for tax+HC+nenkin
Fortunately I did save and invest, but this is rather unpleasant.

[Kiro]

It's worth doing the math and checking with your city hall how much it would cost once they take into account the 30/100 calculation.
There are some links here and there should be some on your city's/district's website.
https://www.mhlw.go.jp/stf/houdou/2r98520000004o7v.html

For me it was quite a smooth process: register at Hello work, get the paper showing I'm unemployed and registered, bring paper to city hall and ask they apply the reduction (軽減措置) when billing me.

[Moneymatters]

It's worth doing the math and checking with your city hall how much it would cost once they take into account the 30/100 calculation.
There are some links here and there should be some on your city's/district's website.
https://www.mhlw.go.jp/stf/houdou/2r98520000004o7v.html

For me it was quite a smooth process: register at Hello work, get the paper showing I'm unemployed and registered, bring paper to city hall and ask they apply the reduction (軽減措置) when billing me.

Is this something I just need to do once?
Visit hello work once and get their paper.
Present to ward office and they adjust the health insurance bill. Don’t need to pop back each month getting new evidence. (In my situation I won’t be claiming unemployment benefits).

Also. A tangent question as you seem so knowledgeable on all this.
And excuse my total ignorance here.
Health insurance premiums are based on income for the preceding Jan-Dec. Then split to 9 payments between July-Mar.

Let’s say I get separated in December this year. The ward office will look at my income Jan-Dec of previous year. Calculate what I owe then deduct anything I paid July-Nov? Giving me a bill with the balance owed.(reduced to 30% if I follow the hello work advice here!)

Then by March next year I complete a tax return for Jan-Dec this year, get the hello work stamp again for the reduction to 30%.

Then once my prior year’s income is low enough I dispense with the hello work stamp for the reduction to 30%.
Do I still need to file a tax return each year when income is zero?

[Tkydon]

Thank you! And I greatly appreciate what you have shared about your journey into this time of life as well.

I've heard this more than once, but I think it might be more expensive for me. On my monthly paycheck my portion of HC was 36,800 yen.
I'm estimating my kokumin kenko hoken might be cheaper (?) Is there anyway to find out before going through the routine at city hall?

Maybe you can find some info on the net? For Setagaya-ku for instance, I see that kokumin kenko hoken contribution per month would be higher than 36,800 yen for people earning more than 3,100,000 yen per year.

https://www.city.setagaya.lg.jp/mokuji/ ... mihyou.pdf

I'll have to find out. According to that PDF my responsibility would be over 1,000,000 annually.

I covered this somewhere else in excruciating detail, but

https://www.city.setagaya.lg.jp/mokuji/ ... 32129.html

See the table

NHI Premiums are calculated on three categories, each with 2 or 3 Sub Categories, depending on where you live, to a Household Maximum per category per year, which is a nationwide limit. For Setagaya-ku, the table shows for 2024/5 (Bills will be sent out shortly if you are already enrolled in NHI)

Japan National Health Insurance
Setagaya-ku
- Basic Health Care - Per Insured Person = Y49,100 + 8.69% of Total Household 2023 Taxable Income to Max of 650,000
- Latter Term Care - Per Insured Person = Y16,500 + 2.8% of Total Household 2023 Taxable Income to Max of 240,000
- Long Term Nursing Care - Per Insured Person Over 40 = Y16,500 + 2.36% of Total Household 2023 Taxable Income to Max of 170,000

Some municipalities have a Per Insured Person component, and Per Household component, and the Total Household Taxable Income % component. Al have the same maximum premiums in each category.
So, the absolute maximum Premium if you were in the highest earning brackets tops out at Y1,060,000 per year, divided by 10 = 106,000 per month payable 10 months of the year (May 2024 to Apr 2025)

[Tkydon]

If you agreed with your employer to make it so it was their decision, rather than you leaving, and you register to hello work for unemployment benefits, you can then bring the paper they give you to the city hall in order to get the health insurance down to 30/100 for about a year.
I’ve used this twice in the past (employer’s decision), and the health insurance ended up being quite cheap.
Well, 30/100 (if think it’s something like your previous year salary is counted at 30% for calculating the amount due).

Yes, my whole division globally was closed down, so a no fault dismissal.

This is good news on the price negotiation and I hope I can get a reduction on the HC bill.
Unfortunately (fortunately?) my salary was pretty high, so my current responsibility is high

Regarding company vs public insurance, I heard back from my HR rep and my HC costs were as follows:

• Me: 39,370
• Company: 62,230

- so no saving in extending that option.

Not looking forward to 200,000+ per month obligations for tax+HC+nenkin
Fortunately I did save and invest, but this is rather unpleasant.

The reduction of the NHI bill is really for economically impoverished persons.

This sounds about right.

Y39,370 + Y62,230 = 101,600 payable 12 months of the year

Y101,600 = 1,219,200 per year

But the benefits are better; probably a 10% Co-Pay vs a 30% NHI Co-Pay, better Annual Health Checkup, better hospitalization benefits, and some other benefits. Be sure to compare apples to apples.

Your premium would be reassessed about now, for the next full year (June 2024 to May 2025), so you should get the new quote from the Insurer.

2024/5 Kiso Nenkin Basic Pension Premium has gone up to Y16,980 per person per month - Bills are arriving now for people on Kiso Nenkin Basic Pension. You could also add an additional Y400 per month for the Fuka (Additional) Nenkin premium.
You could also claim a partial or full exemption under certain circumstances, but that would reduce your benefits in retirement.

Residents' Taxes, as stated before, for June 2024 to May 2025 are actually 10% of you 2023 Total Taxable Income, payable monthly (divided by 12) if in employment, or quarterly (divided by 4) or in one lump-sum, if not in employment.

If still unemployed a year from now, you should then see your costs drop significantly, based on only 4 to 5 months of income in 2024 (about 18 months in arrears).

[Tkydon]

Also. A tangent question as you seem so knowledgeable on all this.
And excuse my total ignorance here.
Health insurance premiums are based on income for the preceding Jan-Dec. Then split to 9 payments between July-Mar.

Let’s say I get separated in December this year. The ward office will look at my income Jan-Dec of previous year. Calculate what I owe then deduct anything I paid July-Nov? Giving me a bill with the balance owed.(reduced to 30% if I follow the hello work advice here!)

Then by March next year I complete a tax return for Jan-Dec this year, get the hello work stamp again for the reduction to 30%.

Then once my prior year’s income is low enough I dispense with the hello work stamp for the reduction to 30%.
Do I still need to file a tax return each year when income is zero?

Health insurance premiums are based on income for the preceding preceding Jan-Dec for the months of Jan/Feb, and then the preceding Jan-Dec for the months from May onwards, about 18 months in arrears.

If you leave in Dec 2024, then sign on for NHI, the premiums will be calculated on Total Household 2023 Taxable income, and divided by 10, and then applied for the remaining months; (Dec), Jan and Feb 2025.
Then you get March and Apr off - no premium...
Then they will calculate the Premiums for 2025/6 based on your 2024 Total Taxable Income, in which you worked basically the whole year, so it will be the Household Maximum Premium Y1,060,000, and divide that by 10 = Y106,000 per month payable from May 2025 to Feb 2026.
Then they will calculate the Premiums for 2026/7 based on your 2025 Total Taxable Income (probably close to zero), so it will be the Household Minimum Premium, and divide that by 10... payable from May 2026 to Feb 2027.

If you negotiate deductions, they will apply those deductions to these calculated premiums.

[Tkydon]

(In my situation I won’t be claiming unemployment benefits).

Why not? It is your money. You are entitled to unemployment benefits, as detailed above.

But say you qualify for 300 Days at 7,000 per calendar day (not the right numbers):

You can collect 21 days' benefit after the first 28 days, followed by 28 days' benefit every 28 days (the same day every 4 weeks), until the remaining number of days gets down to zero. All you have to do is show up and show a minimum of 2 Job Hunting activities in the 28 day period and certify that you are open and able to work.

If you find a job in the mean time, after say 100 days of unemployment, you are entitled to a Hello Work Hiring Bonus of 70% of the outstanding unused balance; say 200 Days x 7000 x 0.7 = Y980,000 Hiring Bonus.

You have paid for it all the time you have been working in your monthly Unemployment Insurance Premium directly from Payroll, and calculated based on your monthly gross income amount.

It'll help with the rent/mortgage and/or the NHI and other bills...

[Kiro]

It's worth doing the math and checking with your city hall how much it would cost once they take into account the 30/100 calculation.
There are some links here and there should be some on your city's/district's website.
https://www.mhlw.go.jp/stf/houdou/2r98520000004o7v.html

For me it was quite a smooth process: register at Hello work, get the paper showing I'm unemployed and registered, bring paper to city hall and ask they apply the reduction (軽減措置) when billing me.

Is this something I just need to do once?
Visit hello work once and get their paper.
Present to ward office and they adjust the health insurance bill. Don’t need to pop back each month getting new evidence. (In my situation I won’t be claiming unemployment benefits).

Also. A tangent question as you seem so knowledgeable on all this.
And excuse my total ignorance here.
Health insurance premiums are based on income for the preceding Jan-Dec. Then split to 9 payments between July-Mar.

Let’s say I get separated in December this year. The ward office will look at my income Jan-Dec of previous year. Calculate what I owe then deduct anything I paid July-Nov? Giving me a bill with the balance owed.(reduced to 30% if I follow the hello work advice here!)

Then by March next year I complete a tax return for Jan-Dec this year, get the hello work stamp again for the reduction to 30%.

Then once my prior year’s income is low enough I dispense with the hello work stamp for the reduction to 30%.
Do I still need to file a tax return each year when income is zero?

Yes, only once. And it's valid until the end of the next fiscal year.

You can go the city hall, register for insurance at full price (previous year salary 100/100), then go back a few days later with the hello work paper proving you're unemployed and registered and get the amount amended using the 30/100 multiplier (they'll refund you if you already paid the first month).
I did go to hello work first as I didn't want to do the back and forth to get it amended (it does take a few days to get this paper though).
Keep in mind that this is not a reduction for low income households, it's a reduction for the unemployed (by company's decision). I had a fairly good salary the last time I used this, and was still able to use it, no questions asked. The hello work staff during the seminar told us "you're entitled to get this" and the city hall staff looked at the papers, confirmed it was a no fault dismissal, and applied the reduced rate.

You can get this multiplier applied starting from the following day you lost your job, until march of the next fiscal year. By that time, either you will have found another job and moved under the new company insurance, or if still unemployed then your previous year income would be 0 (unemployment benefits do not count).
I can't answer whether you have other things to file for during the following year (capital gains? dividends?) but you don't need to file for unemployment benefits (if you get them).

[Moneymatters]

I did go to hello work first as I didn't want to do the back and forth to get it amended (it does take a few days to get this paper though).
Keep in mind that this is not a reduction for low income households, it's a reduction for the unemployed (by company's decision). I had a fairly good salary the last time I used this, and was still able to use it, no questions asked. The hello work staff during the seminar told us "you're entitled to get this" and the city hall staff looked at the papers, confirmed it was a no fault dismissal, and applied the reduced rate.

You can get this multiplier applied starting from the following day you lost your job, until march of the next fiscal year. By that time, either you will have found another job and moved under the new company insurance, or if still unemployed then your previous year income would be 0 (unemployment benefits do not count).

thanks for responding! I was planning to just extend with my employer and bite the bullet on the costs but this does seem worth pursuing!

Health insurance premiums are based on income for the preceding preceding Jan-Dec for the months of Jan/Feb, and then the preceding Jan-Dec for the months from May onwards, about 18 months in arrears.

If you leave in Dec 2024, then sign on for NHI, the premiums will be calculated on Total Household 2023 Taxable income, and divided by 10, and then applied for the remaining months; (Dec), Jan and Feb 2025.
Then you get March and Apr off - no premium...
Then they will calculate the Premiums for 2025/6 based on your 2024 Total Taxable Income, in which you worked basically the whole year, so it will be the Household Maximum Premium Y1,060,000, and divide that by 10 = Y106,000 per month payable from May 2025 to Feb 2026.
Then they will calculate the Premiums for 2026/7 based on your 2025 Total Taxable Income (probably close to zero), so it will be the Household Minimum Premium, and divide that by 10... payable from May 2026 to Feb 2027.
...

"preceding preceding" I had to read that twice before it made sense.
thanks for the clear information and confirmation.
Knowing when payments will be due and what they are based on is most useful.

for your other question. I'm not paying into the employment insurance system due to my role as Rep Director.. so I won't be eligible to receive it.
I've got a verbal from my employer that they'll make an allowance for this in any severance. I had already been paying in for a very long time.
I'll likely need to negotiate on that amount..
Of course, this is all predicated on them actually offering me a package rather than their currently preferred method of working me to death..