Photo/Illutration Plaintiffs in the welfare benefit reduction lawsuit protest in front of the welfare ministry building in Tokyo on Oct. 28, calling for “an apology first.” (Takashi Kiyokawa)

Following a Supreme Court ruling that welfare cuts made a decade ago were illegal, the welfare ministry announced on Nov. 21 that it will institute a new, smaller reduction and make retroactive payments to all affected recipients.

The previous deflation adjustment reduction rate was 4.78 percent and will be lowered to 2.49 percent.

The ministry will pay the difference to plaintiffs and other welfare recipients from the period starting in 2013 when livelihood assistance benefits were illegally reduced.

Plaintiffs will also receive a special compensation payment, the ministry said.

The necessary funds will be included in the supplementary budget proposal scheduled for submission to the current extraordinary Diet session.

The additional welfare payments are expected to total around 200 billion yen ($1.3 billion).

The plaintiffs are demanding full reimbursement of all welfare benefits reduced between 2013 and 2015, including for non-plaintiff welfare recipients at the time.

HOW CUTS WERE MADE

In 2013, the ministry reduced the standard amount for livelihood assistance—covering daily living expenses such as food and utilities—by an average of 6.5 percent overall, with a maximum reduction of 10 percent.

Two methods were used: “deflation adjustment,” which reflected price declines based on the ministry’s own index; and “distortion adjustment,” aimed at comparing living costs among welfare recipients with low-income households not on welfare.

The Supreme Court ruling in June this year did not find the distortion adjustment illegal but ruled the deflation adjustment unlawful, canceling the reduction imposed on plaintiffs.

As a result, plaintiffs’ livelihood assistance standards have reverted to pre-2013 levels.

GOVERNMENT’S NEXT STEPS

In response to the ruling, the ministry set up an expert committee to review measures.

Based on committee discussions, it decided to reapply the legally approved distortion adjustment and redo part of the deflation adjustment reduction using a method based on actual consumer consumption patterns.

The ministry will establish new welfare standards and pay the difference to plaintiffs and other welfare recipients from that period.

The amount per household is expected to drop from about 200,000 yen to about 100,000 yen compared to if the reductions were not redone.

For plaintiffs whose reduction orders have been canceled, the amount they should have originally received will decrease. The ministry will provide an additional special payment to cover the entire amount reduced by the deflation adjustment.

(This article was written by Ayami Ko and senior staff writer Takashi Kiyokawa.)

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