[2024]Japan’s Pension Refund How to Apply and Common Issues: Expert explanation

As you know, foreign workers employed in Japan have their pension insurance premiums deducted from their salary.

These premiums can be refunded after you return to your home country.

This refund is called a “Withdrawal Lump Sum Payment.”(脱退一時金“dattai-ichijikin”)

Today, we have an expert (certified labor and social security attorney) who has processed over 20,000 Withdrawal Lump Sum Payment applications to explain the application process.

Labor and social security attorneys hold a national qualification in Japan and specialize in personnel labor, social insurance, and pension matters.

They are the only ones authorized to handle pension application services for a fee.

In this article, the expert will provide important points to consider when applying on your own.

1.Conditions for the Pension refund in Japan

The eligibility criteria are as follows:

・You are not a Japanese citizen

・You don’t have a Japanese home address

・You have resigned from your company

・You paid pension insurance more than six months

・You are not entitled to receive a nenkin

As you can see, you cannot apply while residing in Japan.

Once you have decided on your return date, prepare your application.

You must submit the application within two years after losing your Japanese address.

Failure to do so will result in the loss of your right to receive the lump sum payment.

This can be a significant loss, so please be careful.

1-2 Old age pension

Note that if you have lived in Japan for more than 10 years, you become eligible to receive the Japanese old-age pension.

In that case, you cannot apply for the Withdrawal Lump Sum Payment.

However, once you reach the age of 60, you can receive the Japanese pension, even if you live overseas.

Old-Age Pension

2.How much can you receive?

The amount depends on the period for which you have paid premiums and your salary.

Here is the formula for calculating the pension (in the case of Employees’ Pension Insurance):

For example, if your average monthly salary over three years is 300,000 yen and you have worked for three years, the calculation would be as follows:

300,000 yen × 3.3 (payment rate) = 990,000 yen

2-1 National Pension

Most people are enrolled in Employees’ Pension Insurance as employees of companies, but for National Pension (self-employed individuals or freelancers), the lump sum payment amount is fixed, as shown in the table below.

Also, on our website, you can try a simple simulation. Please give it a try.

3.Application process for the pension refund.

Please submit a notification of moving out to the municipal office.

As mentioned earlier, you cannot apply while you have an address in Japan.

Before returning, be sure to submit a notification of moving out to your local municipality.

You can submit the notification of moving out about 10 days before your return date (depending on the municipality).

And, You have resigned from your company, you can apply for the Withdrawal Lump Sum Payment.

Therefore, the fastest way to apply for the pension is to mail the application form just before returning.

In that case, it would be advisable to include a copy of the notification of moving out.

4. Fill out the pension application form.

Please enter the information on the Withdrawal Lump Sum Payment application form provided below.

You can download the application form from the official website of the Japan Pension Service (JPS).

pension refund claim form

Applications are generally submitted by postal mail.

Please fill in all the information accurately In capital letters of the alphabet.

Also, provide an address where you can receive postal mail as your current address.

If there are any errors in your name or account number, JPS will send a confirmation letter to the address you provided.

It is common for this letter to not reach many people. Unless the information in the letter is corrected, the examination process will be halted.

Communication with JPS is done only by postal mail.

Although phone calls are possible, they usually provide general answers, and email addresses are not disclosed.

Therefore, please provide your accurate address, which will serve as the contact information from JPS.

5. Gather the necessary documents.

In addition to the application form, please enclose the following required documents.

1.Passport (page with the photo)

2.Bank account certificate for the transfer destination

3.Pension number (copy of pension book)

If available, it is recommended to include a “moving out notification.”

5-1.What is a Bank certificate?

The bank account certificate is a document that verifies the bank name, account holder’s name, and account number.

It is referred to as a bank statement in Western countries.

Bank certificate sample

If specifying a Japanese bank, the first page of the bank passbook corresponds to it.

(Note that you cannot specify Japan Post Bank. JPS can not transfer money to Yucho bank.)

For Japanese accounts, the payment will be in Japanese yen, while for overseas accounts, it will be in foreign currency.

6. Sending to JPS by postal mail

Put the above documents in an envelope and mail them to JPS.

The address is stated at the bottom of the application form.

Please note that even if there are no issues, the review process will take 5-6 months.

Once the application is approved, 80% of the pension will be directly paid to your account by JPS. (20% will be deducted as income tax in Japan.)

You will also receive a pension determination notice by mail to the address you provided.

With this, the pension application process is complete. Please refer to this article for frequently asked questions and troubleshooting information.

Japan Pension Refund Q&A

Why Your Lump Sum Review Is Taking A Longer Time..?

7. Procedure for the 20% refund

You can almost fully refund the deducted 20% tax by filing a tax return in Japan.

Since most people have already left Japan, you will need to appoint a tax agent to receive the refund.

If your application is approved, the 20% refund will be sent from the tax office to the tax agent’s account. The process from application to refund takes about 1.5 months.

Your friend residing in Japan or your company can act as the tax agent.

The required documents are as follows:

1.Notification of tax agent appointment

2.Tax return form

3.Pension determination notice (original, no copies allowed)

Submit the tax return to the tax office responsible for your last address in Japan.

You can refer to the National Tax Agency’s website for the content of the declaration.

They will provide advice on the details at the nearest tax office.

If there are any deficiencies in the content of the declaration, the tax office will contact you by phone or mail.

Therefore, it is recommended to rely on a tax agent who is proficient in Japanese, such as a Japanese-speaking friend or a Japanese acquaintance.

With this, the procedure for the full refund of the pension is complete!

8. The success rate of doing it on your own is 23%.

We have supported over 20,000 applications, but many people have not been able to complete the process on their own.

Japanese government offices are difficult to communicate with in English, and even Japanese people find this procedure complicated.

In particular, it is very common for people to not receive the return documents from JPS if there are deficiencies in the pension application.

Additionally, there are cases where the pension determination notice does not arrive, making it impossible to proceed with the 20% refund process.

For the 20% tax refund procedure, cooperation from a friend living in Japan is necessary.

Without receiving guidance from the tax office and completing the tax return form, it is very challenging.

9. As your Japan branch

My conclusion is that it is advisable to seek the assistance of a specialized service provider.

This recommendation is not for promotional purposes but based on the high frequency of issues and the complexity involved.

It is simply too complicated and troublesome.

There are numerous agencies available, so you should choose a service provider that suits your preferences.

Also, We can handle all of these procedures on your behalf.

As your Japan branch, we can regularly check the progress of your pension and provide you with updates.

Moreover, if we handle the pension determination notice, it will be sent to our office, and we can assist with the 20% refund process as well.

You only need to provide the necessary documents initially.

While it is faster to entrust the process to an expert from the beginning, we can also provide support midway.

Please contact us if you fall into the following categories:

Not receiving the pension determination notice

・No communication received even after half a year since applying for the pension

・Requesting assistance only with the 20% refund process, and so on

If you are considering applying or have any difficulties with your pension, please feel free to contact us through this form.