Allowances for single parents to be axed

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Solo mothers are set to bear the brunt of government efforts to curb spending with plans by the health ministry to end special payments for single-parent families living on welfare.

The "mother-child family addition" payments, which offer between 20,020 yen and 23,260 yen per month for each child aged 15 or younger, will be phased out over the coming three years amid moves to slash fiscal 2007 expenditure on welfare by 40 billion yen.

The government is trying to curtail growing costs of "last safety net" payments in an effort to rebuild its fiscal structure.

More than 1 million families in Japan are currently on welfare, costing taxpayers 2.7 trillion yen annually.

Of that total, the central government contributes about 2 trillion yen, with municipalities footing the remainder.

The planned cuts follow a similar phaseout of an additional welfare allowance for elderly people in the three years up to fiscal 2006.

In the budget for fiscal 2007, the government will shave 220 billion yen from the estimated 770 billion yen in natural growth in total social security payments.

The Ministry of Health, Labor and Welfare will cut 40 billion yen in livelihood assistance, while the remaining 180 billion yen will be slashed by halving state subsidies to the unemployment compensation insurance program.

According to officials, 91,000 low-income families on welfare currently receive the "mother-child" assistance payments. About half the parents are in employment.

Officials said the decision to do away with the additional allowances was made in light of the fact that the average monthly spending of recipient families is about 50,000 yen higher than the lowest spending levels of single-parent families who are not on welfare.

To cushion the blow, the payments will be gradually reduced rather than stopped outright.

Officials said the ministry will continue to offer some level of support for working single parents in nursing care or other subsidies.

Those payments, however, will be less than the "mother-child" supplements, they said.

The elderly will also feel the pinch of cuts to livelihood assistance as seniors aged 65 or over who own homes worth more than 5 million yen will no longer get welfare payments under a new reverse-mortgage program.

The format will offer loans to cover livelihood expenses using the homes as collateral. Maximum loans will be 70 percent of the assessed property value, while for condominiums, the ceiling will be 50 percent of the total value.

Loans will be recovered from the sale of the real estate after the death of the recipient.

The pressure to rein in welfare spending is due in part to the growing disparity in incomes. Monthly payments under the program are often higher, particularly in major cities, than the 66,000 yen in basic pensions for elderly citizens living alone.

They can also be higher than income levels of a growing number of part-timers and other non-regular workers whose wages are kept low.

Combined with other proposed cutbacks, the latest changes are expected to severely weaken the "last safety net" for underprivileged families, critics say.(IHT/Asahi: December 1,2006)
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