Photo/Illutration Prime Minister Fumio Kishida speaks at a meeting on the Children’s Future Strategy Policy on Dec. 11. (Takeshi Iwashita)

The Kishida Cabinet plans to approve a package of “different dimensions” measures to stem the nation’s declining birthrate, which will call for annual outlays of 3.6 trillion yen ($24.7 billion), by year-end.

A draft of the package, dubbed the Children’s Future Strategy Policy, was presented at a government meeting on Dec. 11.

The package features an expansion of child allowances, “free” university education for families with three or more children and regulatory changes to improve services at day care centers, among other policy measures.

The expansion of child allowances for families with younger children consists of three pillars: elimination of income restrictions; extension of the benefit period to high school-age children; and doubling of the monthly payment to 30,000 yen for third and subsequent children.

The expanded portions will be paid from December 2024.

For households with three or more children, tuition and enrollment fees for universities, junior colleges and technical colleges will be made “free of charge” without income restrictions from fiscal 2025.

In the area of child care, the number of 4- to 5-year-old children to be supervised by one child care worker that is stipulated in the government's staffing standards will be reduced from fiscal 2024, allowing those workers to take better care of the children.

The government plans to secure about 1 trillion yen by collecting a new “child and child care support fee” with medical insurance premiums, about 1.1 trillion yen by reducing social welfare expenditures and about 1.5 trillion yen by diverting existing budget funds.

The child and child care support fee will be introduced in fiscal 2026, and the amount will be gradually increased to secure 1 trillion yen annually by fiscal 2028.

Government officials said that the additional public financial burden from the new fee system will be “virtually zero” because the total amount to be collected will be below the amount of social insurance premiums that will be reduced under the overall program.

But they said changes will be made in medical and nursing care insurance programs to have elderly people pay more for these services if they have income comparable to that of working-age people.

The government plans to issue bridging bonds to cover a shortfall in revenues from the child and child care support fee until fiscal 2028.

At an Upper House Budget Committee session in November, Prime Minister Fumio Kishida said the “national burden ratio for social security” will be used as a benchmark to achieve a net zero public financial burden for the Children’s Future Strategy Policy package.

This refers to the ratio of social security contributions to national income, or the sum of individual and corporate income.

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