1. Overview of Japan’s Pension System
1.1 What is the Lump-Sum Withdrawal Payment?
The Lump-Sum Withdrawal Payment (脱退一時金, dattai ichijikin) is a refund system for foreign nationals who have contributed to the Japanese pension system but leave Japan before qualifying for pension benefits. Since receiving a Japanese pension requires at least 10 years of contributions, many short-term foreign workers are unable to benefit from the system. This payment allows them to reclaim a portion of their contributions upon leaving Japan.
1.2 Challenges Faced by Foreigners
Foreign workers in Japan often face two main issues regarding the pension system:
- Short Contribution Period – Since eligibility for a Japanese pension requires at least 10 years of contributions, many foreign workers do not stay long enough to qualify.
- Double Payment of Social Security – Workers from countries without a Social Security Agreement (社会保障協定, shakai hoshou kyoutei) with Japan may be required to contribute to both Japan’s pension system and their home country’s system, leading to financial inefficiencies.
To mitigate these challenges, Japan offers two solutions:
- The Lump-Sum Withdrawal Payment, which allows short-term foreign workers to reclaim a portion of their contributions.
- Social Security Agreements, which enable workers from participating countries to avoid double payments and potentially combine their contribution periods.
2. Eligibility for the Lump-Sum Withdrawal Payment
To qualify for the Lump-Sum Withdrawal Payment, foreign nationals must meet the following conditions:
✅ Not hold Japanese nationality
✅ Have contributed to the Japanese pension system for at least six months
✅ Not have qualified for pension benefits (less than 10 years of contributions)
✅ Have already left Japan and no longer hold a registered address in the country
✅ Apply within two years of leaving Japan
✅ Not be receiving disability pension benefits
3. How to Apply for the Lump-Sum Withdrawal Payment
3.1 Required Documents
To apply for the Lump-Sum Withdrawal Payment, you must prepare the following documents:
📌 Lump-Sum Withdrawal Payment Application Form (脱退一時金裁定請求書, dattai ichijikin saitei seikyuu-sho) – Available in multiple languages from the Japan Pension Service (日本年金機構, Nihon Nenkin Kiko) website.
📌 Copy of your passport – Ensure the following pages are included:
- Name, date of birth, and nationality
- Signature page
- Japanese visa/stamp showing your final departure date
📌 Proof of leaving Japan – A copy of your Residence Deregistration Certificate (住民票の除票, juuminhyou no jokyou) or passport entry stamp proving you have left Japan.
📌 Bank account information – A document showing your account details (account name, number, bank address, and SWIFT/BIC code).
📌 Pension book or notification letter (if applicable) – Any document showing your Basic Pension Number (基礎年金番号, kiso nenkin bangou).
3.2 Submission Process
📝 Step 1: Download and complete the Lump-Sum Withdrawal Payment Application Form from the Japan Pension Service website.
📩 Step 2: Send the completed application and required documents to the following address by international mail:
Japan Pension Service (日本年金機構, Nihon Nenkin Kiko) 3-5-24, Takaido-Nishi, Suginami-ku, Tokyo 168-8505, Japan
⏳ Step 3: Wait for processing, which typically takes 3-4 months.
💰 Step 4: Receive payment in your specified foreign bank account.
4. Important Considerations
4.1 Tax Deduction and Refund
⚠ 20.42% Income Tax Deduction: When receiving the Lump-Sum Withdrawal Payment, 20.42% is automatically deducted as tax. However, this tax can be refunded by filing a Tax Return (確定申告, kakutei shinkoku) in Japan.
📝 Steps for Tax Refund
- Appoint a Tax Representative (納税管理人, nouzei kanrinin) before leaving Japan.
- File for a tax refund through the Japanese tax office after receiving the Lump-Sum Payment.
See also : How Can I Get a Tax Refund for My Lump-Sum Withdrawal Payment in Japan?
4.2 Social Security Agreements
Japan has Social Security Agreements (社会保障協定, shakai hoshou kyoutei) with several countries, allowing workers to combine contribution periods in both countries to qualify for pension benefits.
🔹 Countries with Social Security Agreements with Japan: 🇩🇪 Germany, 🇬🇧 UK, 🇰🇷 South Korea, 🇺🇸 USA, 🇫🇷 France, 🇪🇸 Spain, 🇨🇦 Canada, 🇧🇷 Brazil, 🇨🇭 Switzerland, 🇮🇪 Ireland, 🇮🇹 Italy, 🇳🇱 Netherlands, 🇨🇿 Czech Republic, 🇦🇺 Australia, 🇱🇺 Luxembourg, 🇸🇰 Slovakia, 🇫🇮 Finland, 🇸🇪 Sweden, 🇮🇳 India, 🇵🇭 Philippines, 🇨🇳 China
📌 Important: If you receive the Lump-Sum Withdrawal Payment, you will lose the ability to combine your contribution periods under a Social Security Agreement.
5. Conclusion
The Lump-Sum Withdrawal Payment is an essential option for foreign workers who leave Japan without qualifying for a pension. However, if your home country has a Social Security Agreement with Japan, it is crucial to weigh the benefits of claiming the Lump-Sum Payment versus combining contribution periods for future pension benefits.
💡 Need Assistance? Navigating Japan’s pension system can be complex. If you need guidance on applying for the Lump-Sum Withdrawal Payment or determining whether to utilize a Social Security Agreement, feel free to contact our expert consultants for personalized advice.
📞 Contact us today for a consultation!
