Recently, the number of foreigners coming to Japan to work as technical interns or specified skilled workers has been increasing. But when they are about to return to their home country and look into how to receive their pension refunds, many people feel confused and think that the procedures for receiving this money are too complicated, so most of them skip this pension refunds. However, it’s not as difficult as it seems if we prepare in advance.
This article will provide in detail the necessary documents and procedures to receive this pension (retirement benefits).
What is Nenkin?
“Nenkin” is the Japanese pension system and contributing to this fund is a legal obligation for everyone regardless of nationality (including foreigners), occupation, gender and age (from 20 to 60 years old) residing in Japan. Every laborer and worker in Japan is obligated to contribute a portion of their monthly income to ensure financial security for themselves after retirement.
When workers and laborers in Japan reach retirement age (65 years old) and are no longer able to work, they will receive monthly pension benefits if they participate and pay the required number of years as stipulated by law. Additionally, they may receive support in case of disability or death before the age of 65, provided that the individual resides and lives in Japan. Previously, foreign workers in Japan who returned to their home countries before reaching retirement age would not receive their Nenkin contributions. However, to ensure the rights of workers, since 1994, Japan has allowed foreign workers who return to their home countries to receive a portion of these funds. The procedures for receiving Nenkin for foreigners are not complicated.
For foreign workers, technical interns working in Japan for several years will return to their home countries, so they cannot enjoy future retirement benefits like Japanese citizens when they reach retirement age as stipulated by Japanese law. Therefore, Japan has enacted new laws related to taxes for foreign workers working and living in Japan to fulfill their Nenkin tax obligations if their income is taxable, they will be refunded when they return home.
Nenkin has two types: national pension (Kokumin Nenkin) and welfare pension (Kosei Nenkin).
Conditions for getting Nenkin pension refunded
If the applicant has left Japan and has stopped participating in insurance, but during the time when they were in Japan, they participated in national insurance, social insurance, the insurance of Mutual Aid Association and meet all the following conditions, they can get Nenkin money back. However, you need to submit a refund application within 2 years from the date you leave Japan.
- The person processing the refund does not have Japanese nationality. If the worker holds Japanese nationality, they must pay the fee until they reach retirement age as stipulated by law.
- The person has a total of more than 6 months of participation in Nenkin contributions.
- The person processing the refund no longer resides in Japan
- The person does not receive Nenkin subsidies (including disability benefits)
- No address in Japan
- Departing Japan for less than two years
- For temporary returnees to receive Nenkin benefits, they need to stay in Vietnam for 1.5 months or longer
Calculating Nenkin money
Below is an instruction about how to calculate the amount of Nenkin money you can receive. The amount of Nenkin money you can receive varies depending on the period of insurance payments.
Calculation of Nenkin received in case of contributing to national pension (Kokumin Nenkin)
From April 2021, for individuals who made their last insurance fee payment from April 2021 onwards, the amount of retiring allowance (Nenkin) is calculated based on the insurance payment period and the last month of payment.
For individuals who made their last insurance fee payment before March 2021, the amount of retirement allowance (Nenkin) is still calculated as 36 months as before.
Formula for calculating full retirement benefits = Amount of insurance fee for the year with the last insurance fee payment x 1/2 x number used to calculate the payment rate
The number used to calculate the payment rate is set up to 60 months (5 years) according to the classification of months of insurance fee payment and is shown in the table below:
Table of Nenkin calculation coefficients if paid according to Kokumin Nenkin:
| Months of insurance fee payment | Number of months used to calculate the payment rate | Amount paid (2021) |
| From 6 months – Under 12 months | 6 | 49.830 Yen |
| From 6 months – Under 12 months | 12 | 99.660 Yen |
| From 18 months – Under 24 months | 18 | 149.490 Yen |
| From 24 months – Under 30 months | 24 | 199.320 Yen |
| From 30 months – Under 36 months | 30 | 249.150 Yen |
| From 36 months – Under 42 months | 36 | 298.980 Yen |
| From 42 months – Under 48 months | 42 | 348.810 Yen |
| From 48 months – Under 54 months | 48 | 398.640 Yen |
| From 54 months – Under 60 months | 54 | 448.470 Yen |
| From 60 months onwards | 60 | 498.300 Yen |
Calculating the amount of Nenkin received in case of contributing to welfare pension (Kosei Nenkin)
From April 2021, the period for receiving full Nenkin has increased from 36 months (3 years) to 60 months (5 years). This change only applies to individuals whose last month of social insurance premium payment (Nenkin money) is after April 2021. Those with a standard month of premium payment from March 2021 and earlier are still subject to 36 months (3 years) limit as before.
Formula for calculating full retirement benefits:
Average basic salary during the insured period x Payment rate (insurance fee rate) x 1/2 x Number used to calculate the payment rate
– The average basic salary during the insured period is the amount obtained by dividing the total amount A + B below by the total number of months of the insured period.
+ A: Basic salary for months during the period of the insured person before April 2003 x 1.3
+ B: Total bonus and basic salary for months during the period of the insured person after April, 2003
– The payment rate is the insurance fee rate for the last month of the year with the last insurance fee payment (if the last month of the insurance fee payment is from January to August, the insurance rate will be calculated in October of the previous year. If the last month of the insurance fee payment is from September to December, the insurance fee rate will be calculated in October of this year) x 1/2 x Number used to calculate the payment rate as in the table below.
Latest Nenkin coefficient table 2023 :
| Months of insurance fee payment | Number of months used to calculate the payment rate | Latest 2023 Nenkin coefficient |
| From 6 months – Under 12 months | 6 | 0.5 |
| From 12 months – Under 18 months | 12 | 1.1 |
| From 18 months – Under 24 months | 18 | 1.6 |
| From 24 months – Under 30 months | 24 | 2.2 |
| From 30 months – Under 36 months | 30 | 2.7 |
| From 36 months – Under 42 months | 36 | 3.3. |
| From 42 months – Under 48 months | 42 | 3.8 |
| From 48 months – Under 54 months | 48 | 4.4. |
| From 54 months – Under 60 months | 54 | 4.9 |
| From 60 months onwards | 60 | 5.5. |
According to the new law, from April 1, 2021, the maximum contribution period has been extended to 5 years. Unlike before, where the maximum period was only up to 3 years. If you contribute for a full 5 years (60 months), you will receive 498,000 yen (approximately 105 million Vietnamese dong).
Calculating Nenkin money by year
Calculation of Nenkin money for 1 year or more:
Average amount during the Nenkin contribution period x Coefficient of 1.1
Most foreign workers who work for 1 year receive about 15-20 man (26.000.000 – 33.000.000 VND).
Calculation of Nenkin money for 2 years:
Average amount of monthly salary x Coefficient of 2.2
Calculation of Nenkin money for 3 years:
Average amount of monthly salary x Coefficient of 3.3
Calculation of Nenkin money for 4 years:
Average amount of monthly salary x Coefficient of 4.4
Calculation of Nenkin money for 5 years:
Average amount of monthly salary x Coefficient of 5.5
Reference: Instructions for obtaining pension for foreigners leaving Japan
Time to receive Nenkin money
From the completion of the Nenkin application process, it takes about 3-4 months for workers to receive their Nenkin money. Workers will receive a notification from the bank that the money has been transferred to their account (the bank account registered during the Nenkin application process). The notification will detail the amount of money the worker received and the amount deposited with the tax office.
For national pension (Kokumin Nenkin), income tax will not be withheld from the Nenkin money returned, while for welfare pension (Kosei Nenkin), 20.42% will be deducted, meaning the worker will receive back 79.58% of the insurance premiums they paid. The deducted 20.42% will be submitted to the tax office. This amount can also be reclaimed through a procedure known as “Second Nenkin Claim”.
Guide for the Nenkin refund process
Nenkin money will be disbursed in two installments :
Nenkin money received in the first installment (also known as the Nenkin refund procedure. Workers receive 79.58% of the Nenkin money)
Step 1: Prepare documents
- Passport (page with personal information and departure stamp)
- Nenkin book (If lost, only the Nenkin book number is required)
- Application form for receiving Nenkin subsidy 1 time (download from the link below) ※ Form for receiving first-time nenkin assistance
- Bank account that allows money transfer from Japan to Vietnam, preferably Vietin Bank, Agri Bank, Vietcom Bank… excluding MB and Tech, which do not support receiving Nenkin money (The account must be in the worker’s name)
- Documentation confirming no longer residing in Japan (such as a copy of the residence deregistration form, etc.)
Step 2: Fill out the form and submit the documents
Workers can submit documents via EMS or send them to the Japan Pension Office.
Nenkin money received in the second installment (income tax. Workers receive 20% of the total Nenkin money)
For the second installment of Nenkin money, workers cannot complete the application themselves like the first installment. According to regulations, the person applying for the second Nenkin claim must be residing in Japan. However, most interns return to Vietnam after their contract expires.
Therefore, to claim the second installment of Nenkin money, before leaving Japan, you can register with the tax office in your home country as a tax representative. This representative will then apply to the tax office to reclaim the second installment of Nenkin tax.
The second installment of Nenkin money will be transferred to the representative’s account, who will transfer it to the worker’s account abroad afterwards. The amount of Nenkin money received in the second installment is 20.42% of the remaining amount.
Step 1: Prepare documents
- A copy of passport
- Personal information (Full name, company address, address when working in Japan)
- Original notification from the Japan Pension Office when disbursing the first installment of Nenkin
- Original Nenkin book
Step 2: Receive Money
Important points when filling out information in the Nenkin application form
To facilitate the Nenkin application process, workers need to pay attention to the following important points:
- When submitting the Nenkin refund application, workers need to keep the necessary codes of “Basic subsidy code in the Nenkin book and Nenkin book code” for later reference.
- All entries must be in UPPERCASE with accents.
- The account holder’s name must be written in Latin letters.
- The information entered in the first Nenkin claim application form must be truthful with no corrections.
- In the Nenkin claim application form, workers can only fill in the sections highlighted in BOLD. The sections not highlighted are for the Japanese Pension Office only. You must not fill in any information in these sections.
Summary
Through this article, jvisa has provided detailed information about the procedures and steps to receive Nenkin money. We hope this article will be helpful to you in Nenkin refund process. We will always update and provide you the latest information if there are any changes to the Nenkin procedures. So, be sure to follow us regularly!