Photo/Illutration Prime Minister Fumio Kishida responds to questions at the Dec. 13 Lower House Budget Committee session. (Koichi Ueda)

Following weeks of confusion and complaints at the local level, Prime Minister Fumio Kishida compromised further by saying municipalities can distribute the government’s COVID-19 relief handouts for children fully in cash before the year-end.

“I definitely want to add as one option distributing 100,000 yen ($880) totally in cash before the end of the year,” Kishida said at the Dec. 13 Lower House Budget Committee.

The initial government plan was to have local governments distribute 50,000 yen in cash before the year-end and another 50,000 yen in coupons by next spring.

However, criticism arose about the additional administrative costs involved for the coupon program, and many municipalities indicated they would go ahead with cash-only distributions.

Kishida last week said that cash-only handouts would be allowed under certain circumstances, but he did not explain what those conditions were, adding to the confusion among the local governments.

The prime minister on Dec. 13 did not mention any conditions for the cash-only handouts to children aged 18 and younger.

On the same day, Daishiro Yamagiwa, state minister in charge of economic revitalization who is handling the handout program, also said no conditions would be placed on local governments wanting to provide the relief measure in cash only.

Kishida added that local governments that provide the full cash payments before the Diet passes the supplementary budget would be reimbursed with subsidies from that budget.

After the government approved the handout program to help families cope with the novel coronavirus pandemic, various local governments said they would drop the coupon part of the program and distribute only cash.

The central government also insisted that children in households where the main breadwinner has an annual income in excess of 9.6 million yen would be ineligible for the handout program.

But a small number of local governments said they would do away with that income cap as well.

One high-ranking official in the prime minister’s office admitted that doing away with the coupon portion of the handout would negate the primary policy objective of the program—reviving local economies.

The coupon part was included because of the lesson learned from another cash handout program implemented last year. Most of that money was deposited in savings accounts rather than spent at local retail outlets.

With the change in policy, Osaka Mayor Ichiro Matsui, who was one of the first local leaders to say cash-only handouts would be made in his jurisdiction, on Dec. 14 said all eligible children in junior high school and below would receive the entire amount by year-end. About 260,000 children in Osaka will be covered.

Meanwhile, Yamagiwa on Dec. 14 said that local governments that used their own funds to distribute handouts even to households that exceed the income cap would be allowed to do so under the program.

(Yoshitaka Isobe contributed to this article.)

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