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Only low-income households likely to benefit from free education programs

Only households with income under the resident tax threshold are likely to qualify for free higher education and day care services for 0- to 2-year-olds, under a broad distribution outline for 2 trillion yen in funding for the government's free education plan.

The government is looking to allot some 800 billion yen for university and other higher education, while around 10 billion yen will be secured for free day care services for children aged 0 to 2 and another 800 billion yen set aside for free preschool education for those aged 3 to 5.

Under the government's free higher education plan, scholarships granted to children from households exempt from the resident tax -- those with annual income under about 2.5 million yen -- will be increased from 20,000-40,000 yen per month to around 1 million yen a year, helping children from struggling families cover living expenses while they are in university or vocational school. For low-income households that are not subject to the free higher education program, the government will consider introducing measures to prevent unfairness.

In addition, the government plans to make national university tuitions (about 540,000 yen a year) practically free of charge for children from households exempted from the resident tax. For those going to private universities that are more expensive than national institutions, a grant capped at a certain amount will be added to the 540,000 yen reduction, alleviating financial pressure on students and their families.

Meanwhile, free child care services for 0- to 2-year-olds will be expanded. Under the existing system, households on welfare assistance and those exempted from the resident tax do not pay for day care services for their second or later children. However, the government plans to expand the free day care program to first children of households exempted from the resident tax.

Meanwhile, care services and preschool education for children aged 3 to 5 will be free regardless of household income. However, those who send their children to expensive private preschools will likely be required to pitch in.

In addition, the government will allot roughly 300 billion yen to measures to combat Japan's day care waiting list problem, where working parents struggle to find places in daytime child care facilities, as well as about 100 billion yen to measures to improve working conditions for nursing care staff with a certain level of experience in the field.

Approximately 1.7 trillion yen of the 2 trillion yen package will be secured by restructuring the way increased tax revenue will be spent after the scheduled October 2019 consumption tax hike. The remaining 300 billion yen will be secured through raising the amount of social security premiums covered by companies.

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