TOKYO -- The Japanese welfare ministry plans not to include the abolition of the "Category III insured persons" system, which makes stay-at-home spouses eligible for basic pensions under their working partners' programs, in a bill on pension system reform to be submitted to next year's ordinary Diet session.

There are three categories of public pension-insured people in Japan. Those in category III are mainly the spouses of company employees and can receive basic pension benefits without having to pay premiums themselves.

Most of the individuals in this category are homemakers and part-time workers. The latter are eligible for category III status if their annual income is less than 1.3 million yen (roughly $8,500) and the company they work for has 50 or fewer employees, or if they earn less than 1.06 million yen ($6,900) and their employer has 51 or more workers.

Under such circumstances, this category has sometimes been criticized as the cause of the so-called "annual income barrier" that leads part-time employees to limit the hours they work. Business lobbies as well as labor unions have called for its abolition in the future. Since many would be disadvantaged if this category were to be abolished immediately, full-scale discussions on this matter are expected to take place in five years, at the time of the next pension reforms or even later.

As for the other two categories, category I is self-employed workers, freelancers and others who pay their own contributions to the national pension system, while category II is company employees, civil servants and others who pay into the employees' pension system on a 50-50 labor-management basis.

Category III, which covers dependent spouses of those in category II, was established in 1985 to allow full-time homemakers in households with a company employee to secure pension rights in their own name. At the time, about 10.93 million people were enrolled in this category, but the number had dropped to 6.76 million as of May this year against the backdrop of an increase in dual-income households. The number of women in this category is less than 10% among those in their 20s, and about 30% among those aged 35 and older.

Since October, the Japanese Trade Union Confederation, the Japan Chamber of Commerce and Industry and the Japan Association of Corporate Executives have released proposals calling for the "future abolition" of the category III amid labor shortages at small- and medium-sized companies. As the number of dual-earners increases, there remains a sense of unfairness in that the system allows some people to receive pensions without working, and critics argue that it also encourages wage disparity between men and women.

A subcommittee of the welfare ministry's social security council, which discusses pension system reform, has touched on the issue regarding category III several times. While some members are in favor of its abolition, saying that it prevents women's employment, others have argued that it should remain in place, claiming its function is to guarantee income, and at this point the debate has not been settled.

Japan's pension system is reviewed every five years, and the ministry intends to begin full-fledged discussions on whether to abolish the category III system after the next review. For the time being, it aims to ease the requirements for part-time workers to join the employees' pension system, so that they will be able to shift from category III.

(Japanese original by Haruka Udagawa, Lifestyle, Science & Environment News Department)