In recent years, due to the continuous declining birthrate, increasing longevity rate, and decreasing labor force population in Japan, the burdens of social security (including pension system) have been escalating. As such, the social security system has been affected considerably. The participation of females in the Japan domestic labor market had been increasing gradually. The expectation of female labor force shall be raised amid foreseeable continuous declining birthrate and aging population.
In addition, the ratio of double-income households has exceeded the ratio of single-income households in this modern society. Also, the way females participate in the labor market is diversified; the female’s self-actualization opportunity is increased. It is expected to have more female labor force participating in the job market when the employment environment is improved to support female employment. To encourage the willingness of female employment, however, the current tax system should be reformed. And this is the moment.
Almost all the insured persons need to pay contributions, including dependent spouse of self-employers, professional women in double-income households, single mothers, and students aged above 20 as well. When they are granted full or partial exemption from contribution payments, the future pension benefits will be deducted accordingly. However, it is unfair that the Category III insured persons, who are not obliged to pay contributions, are entitled to enjoy the protection of basic pension benefits.
Finally, as the National Pension system does not categorize the insured persons when the contribution comes from consumption tax, the solution to the Category III insured persons problem mentioned above is also explored.