How to Claim Your Pension Refund

Recently there have been a lot of people who are considering their current and future situation here in Japan. For those foreigners who have decided to relocate overseas from Japan here are a few key points if you are looking to make a Pension Refund claim.

 

Who is eligible and what are the criteria?

1. The Pension refund is for non-Japanese only.

If your home country has a coverage totalization agreement with Japan then you may qualify for benefits in your home country, (and vice versa). As of October 2019, 15 countries signed the totalization agreement. Finland and Sweden are joining the list soon.

  • Australia
  • Belgium
  • Canada
  • Czech Republic
  • France
  • Germany
  • Hungary
  • India
  • Ireland
  • Luxembourg
  • Netherlands
  • Philippines
  • Slovak Republic
  • Spain
  • Switzerland

For details please refer to your home country’s pension website.

https://www.nenkin.go.jp/international/english/international/usefullinks.html

 

2. You made pension contributions for 6 months – 9 years 11 months.

It does not matter whether you paid national pension (kokumin nenkin) or employee pension (kosei nenkin). If the total is 6 months or more (up to 9 years 11 months), you can claim the refund. You can check your contribution record at “NENKIN NET” website. (Japanese Only). If you have contributed for 10 years or more, you can claim the Japan pension from Japan or abroad when you turn 60 years old.

https://www.nenkin.go.jp/n_net/

3. You left Japan permanently

You have no intention of coming back to Japan. You filed an overseas departure notice (kaigai tenshutsu todoke) at your local Ward office. Please note you can NOT reverse the refund even if you return to Japan and re-enroll in the Japanese Pension. After receiving the refund, your pension history will be erased and if you return to Japan you will need to start over again.

 

What do you need to apply for your refund?

  • Refund Application Form (page 13 – 14)

https://www.nenkin.go.jp/international/english/lumpsum/lumpsum.files/A.pdf

  • Copy of passport (photo page)
  • Copy of residence card (front & back)
  • Copy of the bank book (inside 1st page)
    • It needs to be YOUR account. The name needs to match the pension record. Refunds can’t be processed to your family, friend, or Tax Representative’s account. For Japanese banks, the registered account holders name (koza meigi) must be in katakana
    • You can’t receive your pension refund at a Japan Post Bank (yucho ginko)
    • For foreign banks, please provide a statement issued by the bank with the following information.
      • Bank name
      • Branch name
      • Branch address
      • Account number
      • Registered account holders name

 

 

How much is the refund?

It depends on how much you have contributed via your monthly pension contribution. The formula is as follows:

 

(Your average gross wage over the time period * Pension Rate * Enrollment Period) MINUS (20.42% non resident income tax)

 

 

As an example, if your gross wage is (560,000 JPY * 8 mth) + (620,000 JPY * 22 mth) + (additional bonus 1,100,000 JPY) = 19,220,000 JPY

Your average gross wage is 19,220,000 / 30 mth = 640,667 JPY

FAQ

Q1. I did not make any pension contributions when I was unemployed for 3 months. How will it affect the refund calculation?
A1. Any months you did not pay into the Pension scheme are not included in the calculation.

Q2. How long does it take to receive a refund?
A2. According to the Pension Office website, it takes 4 months.

Q3. I was enrolled in the pension scheme for 5 years. What is my enrollment period multiplier?
A3. 36 months is the maximum enrollment period for refunds.

Q4. Why is income tax withheld?
A4. Your pension refund is treated as income. After you leave Japan, you are classified as a non-resident (hikyojusha) and 20.42% income tax is applied. If you register a tax representative (nouzei kanrinin) before leaving Japan, you can file a tax return (kakutei shinkoku) and get 20.42% income tax refunded after you have received your Pension Refund.

Q5.  Who can be a tax representative (nozei kanrinin)?
A5.  Tax representative can be your friend, family, colleague, employer, or a Certified Tax Accountant (zeirishi) if he or she:

  • Lives in Japan
  • Has a Japan bank account
  • Can read and write Japanese
  • Understands he or she is the point of contact between you and the Tax Office if any issues arise

 

* If you are not sure about your particular situation and would like further clarification please feel free to contact us. We will be happy to put you in contact with the appropriate professionals.