Japan's social security costs, including pensions, medical treatment and nursing care, are expected to reach 152 trillion yen in fiscal 2025, a 1.8-fold rise from current levels but down from earlier projections, the welfare ministry said Friday.
The proportion of social security costs as part of national income is meanwhile expected to rise to 29.5 percent from the current 21.5 percent, the Health, Labor and Welfare Ministry said.
With the nation's declining birthrate and aging population putting a strain on the social security system, the government faces the need to establish a system that will be accepted by the public and managed effectively.
The government and the ruling coalition are set to start overhauling the entire social security system, following pension reforms currently undergoing Diet scrutiny.
The ministry's estimates were made on the assumption that the government's pension reform bills will be passed.
The bills call for fixing the ceiling for premiums in the corporate pension scheme at 18.3 percent of annual income in fiscal 2017.
With these changes taken into account, the ministry's estimate of total social security costs for fiscal 2025 has been lowered from the 176 trillion yen projected in May 2002, the ministry said.
The ministry now estimates that pension benefits will hit 64 trillion yen in fiscal 2025, a 1.4-fold increase from the fiscal 2004 budget. It foresees medical treatment costs hitting 59 trillion yen, a 2.3-fold jump, and expenses for nursing care posting a 3.8-fold jump to 19 trillion yen.
When combining social security costs and taxes, the national contribution ratio is expected to reach 46 percent in fiscal 2025, up from an expected 35.5 percent in fiscal 2004, the ministry said.