Photo/Illutration Executives of the ruling Liberal Democratic Party and junior coalition partner Komeito speak to reporters after proposing a financial relief measure for pensioners in a meeting with Prime Minister Fumio Kishida on March 15. (Koichi Ueda)

The ruling coalition is considering providing a lump sum payment for pensioners who face a cut in pension benefits from April to help tide them over during the pandemic.

The financial relief measure, tentatively dubbed “extraordinary benefits for pensioners,” comes across as a blatant political ploy that makes a mockery of a system to protect the pension benefits for future generations that the ruling camp itself introduced. Low-income pensioner households would be ineligible for the program, according to the proposal. This further obscures the objective of the measure. The ruling camp should drop the idea immediately.

Under the proposed plan, the government would dole out a lump sum payment of 5,000 yen ($42) to around 26 million pension recipients excluding the low-income pensioners exempted from residential taxes, who have already received 100,000 yen under a government COVID-19 relief program.

Executives of the ruling Liberal Democratic Party and its junior coalition partner, Komeito, proposed the plan to Prime Minister Fumio Kishida. They argue that falling wages for the working population are affecting pension benefits.

But pension benefits are set to fall because they are linked to price and wage trends. The wage trends used for this pension adjustment system are based on average wage data for the past three years. That means the effects of the pandemic are not the only factor behind the planned pension cuts. In fact, workers have been hit harder than pensioners. It is hard to understand why the money should be provided only to elderly people if it is intended as COVID-19 relief.

Some ruling party politicians contend the measure is basically designed to help people deal with expected inflation. If so, it should cover all those who are financially struggling.

There is no convincing case for excluding low-income pensioners from the measure simply because they have already received 100,000 yen. It is also highly questionable how much financial support the 5,000 yen will provide to people.

Many people are bound to view this proposal as a politically motivated giveaway to elderly voters prior to the Upper House election this summer.

It was the same ruling coalition that enacted a revision to the law six years ago to link pension benefits to wages. The revision was necessary, the ruling camp argued at that time, to prevent declines in future pension benefits today’s young generations will receive unless pension payouts are adjusted in response to changes in wage levels.

Has the ruling camp forgotten that it promoted the initiative as a bill to “ensure equality between generations” in response to criticism from opposition parties that it was a “pension cutting bill?”

Speaking at the Diet, Kishida said it is important to have a system to secure a long-term balance between benefits and burdens without imposing an excessive burden on future generations. But some opposition parties have called for a fundamental review of the system. The ruling coalition should recognize how its nonsensical proposal is undermining public trust in the pension program.

The current levels of pension benefits are higher than they should be. That means they will not increase even if prices rise for years to come. Cuts in benefits or falls in their real value deliver a heavy blow to people living on small amounts of pension income.

How to stop declines in basic pension levels and how to support low-income elderly people are key challenges facing policymakers working on reforming the pension program.

Lawmakers need to confront these challenges and try to find sensible answers through tough-minded debate. No ad-hoc measure to garner votes through cash payments will allay people’s anxieties about their financial future.

--The Asahi Shimbun, March 18

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