Cash handouts in Japan: How the financial incentive offered to the whole population in Japan compares to Basic Income
For weeks now, the coronavirus pandemic has affected the livelihoods of people across the world. As the global economy is negatively impacted by the pandemic, governments all around the world have released incentive packages in a bid to counter the economic devastation the virus has brought. In this scenario, universal basic income has gained tremendous attention, as a tool to safeguard the wellbeing of the population in the long-term. Whether we like or not, new crises and epidemics could always emerge. At the same time, many of these government initiatives have been wrongly referred to as universal basic income.
On the 16th of April, Japanese Prime Minister Shinzo Abe announced a state of emergency for all Japan. This announcement included that 100,000-yen ($930) cash handouts would be given to all 120 million Japanese citizens.
Every person listed on Japan’s Basic Resident Register (as of April 27 2020) can receive 100,000 yen, regardless of nationality. In practice, this means that anyone registered as a resident and with a visa of more than three months is eligible for the cash handout. This means adults and children alike
However, the claim itself can only be made by the head of the household, who can also claim the benefit for the rest of the household. It is important to notice that around 90% of the heads of non-single households in Japan are male. After heavy criticism, the government has allowed for victims of domestic violence to apply to the cash handout directly.
The application can be online or by mail. In case of mail, an application form is sent to every household in the country. Any eligible participant is to fill out their bank account details, attach a copy of their ID, and send the form to the municipal office. The money is then transferred to the applicant’s account.
Upon receiving the form, the applicant has three months to return it filled in if they want to keep the right of receiving financial support.
The Universality of the Plan
Originally, only those whose income had fallen sharply due to the emergency policy were eligible to receive the cash handout. However, after much criticism, Prime Minister Abe changed the policy so it could reach every single citizen.
Given that the applicant must fill-up the form, this means that people may or may not apply for it, putting into question how universal the support actually is. Applicants can indeed mark in the application form that they wish to opt-out of the program. Furthermore, since it is up to the head of the household to do the application for the rest of the household, not every person can claim their rights in their own discretion.
Finance Minister Taro Aso has publicly said he hopes wealthy individuals will not claim their rights to receive it. Furthermore, the Liberal Democratic Party of Japan has taken the decision that its parliament members will not receive the money. Politicians of other political parties such as Natsuo Yamaguchi have also declared they will not accept the cash handout. Although saving money to the government, this move from the LDP has been highly criticized as a sign of privilege and lack of solidarity and universality.
Yuichiro Tamaki, leader of the opposition Democratic Party for the People, has declared to receive the money and donate it to the medical field. According to him, “If we create a mood where declining the handout is seen as a noble act, we end up making people in urgent need of help feel embarrassed to receive it.”
How this Policy Relates to UBI
The cash-handouts in Japan differ from UBI in the sense that this is a one-off payment and not a periodic payment. The payment comes from an emergency budget for the relief in this specific coronavirus crisis, and not for long-term social development.
Other than that, the incentive is a cash payment offered to all on an individual basis, regardless of work requirement and without means-test, which has its merits.
Still, there is no discussion of future payments. As it is a one-off payment for economic support punctually for the coronavirus outbreak, it does not qualify as a universal basic income.
In this respect, it is important to remember the definition of UBI according to BIEN: ‘A Basic Income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.’
Reviewed by Toru Yamamori