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Japan yet to fulfill pledge on child care allowances

December 7, 2010 by · Leave a Comment 

Japan’s child-care system is about to hit a road bump, as Finance Minister Yoshihiko Noda says the administration is pondering on placing income requirements on child-care allowances beginning in the month of April. The finance minister announced this in reversal of his pledge not to place limits on child-care allowance qualifications. The government is facing a problem of how to fund the 240 billion yen (equivalent to US$2.9 billion) yearly cost to be able to increase the monthly allowance for children below 3 years of age up to 20,000 yen.

Going against his own principle, Noda stipulated that one way to solve the problem is to cap child-care allowances by putting income restrictions as qualifier. The fiscal strategy set put by the administration back in June prevents execution of policies that are short of funds. The finance minister’s statements are clear evidence of the financial turmoil that Japan is currently facing while attempting to widen the country’s social net of safety. As a result, Japan now holds the biggest national debt amongst all industrialized countries, as well as among member nations of the Organization for Economic Cooperation and Development.

Japan’s government, led by the Democratic Party, gives children monthly allowances amounting to 13,000 yen until their junior high school graduation. The moment the party was seated into power, they swore to increase children’s monthly allowances to twice the current amount for the entire 2011 fiscal period. The administration has thus far approved increasing monthly allowances for children below the age of 3 by as much as 7,000 yen.

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