Japan’s Pension Refund for Foreigners [Updated 2023]
If you’re a foreign resident leaving Japan, there’s no doubt you’ve wondered what happens to all the money you paid into Japan's pension system.
There’s good news. Although you may not be able to claim all the money you paid into it, it is possible to receive a lump-sum pension refund (脱退一時金 = dattai ichi ji kin) after you leave.
Today, we'll go over Japan's pension refund for foreigners and the necessary steps to claim the pension premiums you paid.
How to calculate your lump-sum pension payment
The pension system in Japan is composed of two primary programs: the National Pension Insurance (国民年金 = kokumin nenkin) and Employee Pension Insurance (厚生年金 = kousei nenkin).
Depending on which system you were enrolled in, the amount you can receive from the lump-sum payment will vary.
a. Calculation formula for National Pension lump-sum withdrawal
For example, if you made payments to the National Pension Insurance, your amount will depend on the number of months covered, with the maximum refund capped at 60 months.
Image. National Pension payout chart from Japan Pension Service.
b. Calculation formula for Employee Pension lump-sum withdrawal
On the other hand, if you were enrolled in the Employee Pension System, the amount is determined by a calculation formula based on the number of months paid into the program.
Your payout amount = ASR* x payment rate**. [*ASR (Average Standard Remuneration) is the total average amount of your monthly income, including bonuses, for all months covered in the Employee Pension System divided by the total number of months covered. **Payment rate is your insurance rate x 1/2 x the number of months in the insured period.]
Image. Index for Employee Pension System from Japan Pension Service.
As with the National Pension Insurance, the maximum withdrawal amount is 60 months.
Who qualifies for Japan’s pension refund for foreigners?
To qualify for a lump-sum withdrawal, you must first lose your insured status and depart from Japan.
You must also fulfill the following requirements:
You are not a Japanese citizen.
You have paid over six months of the National Pension or Employee Pension Insurance.
You do not have an address in Japan.
You have never received a pension payout (including disability allowance).
Note: If you qualify for Japan's old-age pension program (10 years or more of paid pension premiums) and receive a lump-sum withdrawal payment, all periods before your claim will no longer count to your pension enrollment period.
How to withdraw a lump-sum pension refund
As touched on in the previous section, you cannot receive a lump sum payment while still being a registered resident of Japan. Therefore, you will need to return to your home country and mail your application form.
However, suppose you want to file the paperwork in person before leaving Japan. In that case, you must submit a moving-out notice (転出届 = tenshyutsu todoke) to your municipal office before submitting your claim to the Japan Pension Service.
Step 1. Submit a moving-out notice (tenshutsu todoke) form to your city office.
Download a moving-out form from your city’s official homepage. See our article “How to Submit a Moving-out Form in Japan” for a step-by-step guide on how to find, submit, and file this form.
Step 2. Submit a Withdrawal Payment Claim form.
Next, you will need a Lump-sum Withdrawal Payment Claim Form (脱退一時金請求書 = dattai ichi ji kin seikyū sho). You can obtain the document from a social insurance office or download it from the Japan Pension Service website.
Image. Lump-sum Withdrawal Payment Claim Form from Japan Pension Service.
Step 3. Fill in the form and gather the required documentation.
After you fill out the form with the necessary information, mail in your application with the following supporting documents:
Photocopy of your passport (the page that contains your name, date of birth, nationality, signature, and status of residence).
Photocopy of your National Pension Handbook (年金手帳 = nenkin techo) or documents verifying your Pension Number.
Bank account information such as the name of your bank, branch name and address, your account number, and IBAN or SWIFT/BIC code.
Documents that verify you no longer have an address in Japan (if you have submitted a moving-out notification, you do not need to attach this document).
Step 4. Send it in to the designated Japan Pension Service.
You can find the destination address for Japan's Pension Service online or at the bottom of your application document.
The Japan Pension Service will take 3 to 6 months to review your application. Then, if everything is in order, you will receive a notice on Payment of the Lump-sum Withdrawal Payment (脱退一時金支給決定通知書 = dattai ichi ji kin shikyū kettei tsūchi sho) and the money in your bank account.
Is there income tax on lump-sum withdrawals?
There is a 20% income tax on lump-sum pension withdrawals. This means that initially, you will only receive 80% of your total payment. The good news is that this tax is refundable as you will no longer be subject to income tax in Japan. To claim this refund, you must assign a tax representative in Japan.
You can find information on assigning a tax representative here, and how to fill out the tax representative form here.
How to claim the 20% tax refund on your lump-sum pension withdrawal
To claim your 20% tax refund on your lump-sum pension withdrawal, you must file a tax return within 5 years of receiving your payout. Additionally, because the Tax Office only accepts bank accounts in Japan for refunds, you will need to appoint a resident in Japan (your tax representative) with a Japanese bank account to receive your tax refund.
Here are the steps for claiming your tax refund on your lump-sum pension withdrawal:
Step1. Receive your lump-sum withdrawal payment and notification of withdrawal.
You must keep the original copy of the notification of lump-sum withdrawal (脱退一時金支給決定通知書), as you will need it to claim your tax return.
Step 2. Prepare documents to appoint a tax representative and fill out your tax return forms.
To appoint your tax representative, fill out this form and other necessary tax return forms.
Step 3. Send your tax representative form, tax returns, and the original copy of notification of withdrawal (脱退一時金支給決定通知書 ) to your tax representative.
Your tax representative will need to submit all documents to the tax office that has jurisdiction over the address you were registered in before moving out of Japan.
Step 4. Receive the money.
After Japan Pension Service has processed your application, a tax refund notice (国税還付金振込通知書 = kokuzei kanpu kin furikomi tsūchi sho) will be delivered to the address of your tax representative. Shortly after, the money will be sent to your tax representative’s bank account, which can be forwarded to your bank account in your home country.
If you have any other questions regarding how to withdraw a lump-sum pension payment, contact Japan’s Pension Service or visit your local social insurance office for more information.
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