Japan's 100,000-yen handouts to public a heavy burden on municipal gov'ts

TOKYO -- Following the out-of-the-ordinary reworking of an emergency economic stimulus package and the fiscal 2020 supplementary budget due to the novel coronavirus outbreak, both were approved by the Cabinet of Prime Minister Shinzo Abe on April 20, with a one-off cash handout been settled, after much confusion, at 100,000 yen for all people registered as residents in Japan.

But in addition to delays in Diet deliberations over the handouts, local governments, which will be in charge of distributing the money to residents in their municipalities, will see a sharp increase in the amount of paperwork they will have to process. This means the prospects that distribution of the money will start in May, as the national government aims to do, are dim.

Meanwhile, those within the ruling parties have already voiced their demand that the government provide additional assistance to people in especially straitened circumstances, giving rise to the possibility that the government may have to take further action.

At a meeting of the government and ruling parties on policy at the prime minister's office on April 20, Prime Minister Abe emphasized, "We will cooperate with concerned agencies and put in our utmost effort to deliver the cash to the public as soon as possible."

Those eligible to receive the 100,000 yen in cash are those registered with Basic Resident Registers as of April 27. This includes foreign nationals who are registered as residents, but not Japanese nationals who have reported their change of addresses abroad. Those who are homeless can receive the money if they are registered as residents with municipal governments.

An application with the names of all the members of a household printed on it will be sent by municipal governments via mail to each household within their jurisdiction. Once the head of the household writes in their bank account information and sends the application back with paperwork that certifies that they are in fact the head of the household in question, all the money for that household is transferred into the head of the household's bank account. A way for victims of domestic violence who live apart from the head of the household to safely receive the 100,000 yen will be deliberated.

Those who have "My Number" social security and tax cards are not required to send identification paperwork, and can apply online for the 100,000-yen handout. Those who do not have bank accounts can receive the money at municipal government counters if they bring identification. Those who determine that they do not need the funds need not apply. The handout will not be taxed.

At one point, the government had planned on distributing 300,000 yen as "life assistance temporary handouts" to households whose incomes had dropped drastically due to the novel coronavirus outbreak. However, critics pointed out that the criteria that had to be met to receive the funds were complicated. The across-the-board 100,000-yen handout has been praised by many, including Mitsubishi UFJ Research and Consulting's senior economist, Shinichiro Kobayashi, who said, "It is easily understood by the public and benefits a large range of people."

However, whether the money will reach the public quickly is still unknown. Municipal governments will be sending applications to all the households in its jurisdiction, but one source connected to the national government said, "In places like Tokyo and Yokohama where the population is large, simply preparing applications is a great undertaking." It is possible that the start of distribution may differ wildly depending on the municipality. In addition, only 19.73 million "My Number" cards -- amounting to 15.5% of the total population of Japan -- have been issued as of March 1, 2020, limiting the amount of clerical work that the system will reduce.

At an April 20 news conference, Minister for Internal Affairs and Communications Sanae Takaichi said emphatically, "In areas where the population is small and preparations are set, the distribution of handouts in May is possible." As for large urban areas, she said, "If each municipality mails out the applications on the same day they produce them, some people will be able to receive them sooner (than if the applications were mailed out all at the same time)." The Internal Affairs and Communications Ministry is poised to call on major systems companies and financial institutions for their cooperation in tasks such as application management and bank deposits.

There is also the question of whether the 100,000 yen will provide enough assistance to those in need. Of the households that could have received a 300,000-yen handout, single-person or two-person households including one dependent will now be getting less money. Meanwhile, the wealthy and public servants, whose wages have not changed amid the coronavirus pandemic, will also be eligible for the 100,000-yen handout. The 300,000-yen handout was criticized because only 20 percent of households across the country would have been eligible for it, but its goal of assisting those in extreme need was clear. The new 100,000-yen handout is called the "special fixed-sum handout," and its policy goal has become a bit ambiguous. Prime Minister Abe has said that it comprises "assistance for people whose various activities will become limited," but a massive government project that will cost roughly 12.8 trillion yen calls for a more thorough explanation.

(Japanese original by Kenji Wada, Business News Department, and Kazuhiko Hori, Political News Department)