Continued Employment Benefit: 15% Cut to 10% from Age 60

The short answer: your date of birth decides the rate

Sources: MHLW, "From 1 April 2025 the benefit rate of the continued employment benefit for older workers changes"[MHLW], Hello Work Internet Service, "Continued employment benefit for older workers"[Hello Work]

The test is whether "the day you reach age 60" falls on or after 1 April 2025. That day is the day before your birthday, so someone born on 2 April 1965 reaches 60 on 1 April 2025 and falls on the new 10% side. For people who have less than five years of Employment Insurance coverage at age 60, the reference date is the day they complete five years. Once you land on one side or the other, the rate does not change until 65.

Who qualifies, and how the amount is set

• You are a general insured person under Employment Insurance, aged 60 or over and under 65, with at least five years of coverage.
• Your wage in each month has fallen below 75% of the monthly wage at the time you reached 60. That wage at 60 is the average of the preceding six months, capped at 522,000 yen and floored at 96,090 yen (from 1 August 2026).
• Your wage in each month is below the payment ceiling of 397,369 yen. If the wage and the benefit together exceed that figure, only the difference is paid. If the calculated amount is 2,562 yen or less, nothing is paid[MHLW].

The amount is "the wage actually paid for the month x the benefit rate". The rate depends on how far the wage has fallen: under the new rules, 64% or less gives 10%, and between over 64% and under 75% the rate falls in a straight line from 10% to 0% as the drop gets smaller. At 65% the rate is 10%; at 74% it is almost 0%.

The figures in the tapering band (over 64% and under 75%) are estimates produced by applying the MHLW formula. The gap is largest for people whose wage has fallen to 61% or less, at 5% of the wage. On a monthly wage of 240,000 yen that is 12,000 yen a month, 144,000 yen a year, and 720,000 yen over the five years from 60 to 65. For people in the 65% to 75% band the benefit was small even under the old rules, so the gap is small too.

How to apply: within four months the first time, then every two months through your employer

1. Your employer files a "wage certificate for reaching age 60" with Hello Work. It certifies the wages for the six months immediately before you turned 60 and registers the monthly wage at 60. Because that figure is the basis for the benefit, artificial increases — such as paying part of a retirement lump sum early as salary — are not accepted.
2. The first claim must be filed within four months of the first day of the first month you want the benefit for. Normally the employer files on the employee's behalf.
3. After that, a claim form is filed once every two months. It goes in during the claim month designated by Hello Work, with documents certifying the wage for the months concerned. Payment arrives about a week after filing.

If the employer forgets to file, the employee gets nothing, so when signing the re-employment contract ask, "will you file the claim for the continued employment benefit for older workers?" If you change jobs after 60 and complete the five years of coverage there, the claim is filed by that employer.

How it interacts with the pension and other benefits

• Adjustment against the in-work old-age pension. If you receive the specially provided Old-Age Employees' Pension (payable from 64 to, for example, women born between 2 April 1964 and 1 April 1966) while also receiving this benefit, part of the pension — a few per cent of the standard monthly remuneration — is suspended. Men born on or after 2 April 1965 have no specially provided Old-Age Employees' Pension, so before 65 this adjustment does not apply to them. From 65 the pension is calculated separately under the 650,000 yen threshold for the in-work old-age pension.
• If you took the basic allowance (unemployment benefit) and then found work, it is the "re-employment benefit for older workers". Find a new job after 60 with 100 days or more of the basic allowance left and the same rate is paid for one or two years. It is an either/or choice against the re-employment allowance — you cannot have both. Whether to claim unemployment benefit once after retiring or simply keep working is a decision to make together with how to receive unemployment insurance.
• The benefit is tax-free and outside social insurance contributions. Neither income tax nor resident tax applies, and it is not included in the standard monthly remuneration. Since a lower wage also means lower social insurance contributions, take-home pay falls by less than the headline figure suggests.
• It ends in the month you turn 65. From 65 there is neither the continued employment benefit for older workers nor the basic allowance (the lump-sum job seeker's benefit for older workers applies instead).

The numbers to look at when negotiating re-employment terms

Because the benefit is built so that "the further the wage falls, the higher the rate (up to 64%)", some employers design re-employment pay with the benefit factored in. Whether the employer makes up for the benefit shrinking from 15% to 10% is a bargaining point for anyone turning 60 from fiscal 2025 onwards.

In the 2020 amendment to the Employment Insurance Act, the MHLW set out a policy of "scaling back the continued employment benefit for older workers in stages, now that securing employment to age 65 has become an obligation", and this 10% is the first stage. This is a benefit whose eventual abolition is in view, so it is safer not to build your finances from 60 onwards on the assumption that it will be there. For the whole picture of money around age 60, see the money roadmap before and after retirement, and for tax in the year you retire, the tax return for the year of mandatory retirement.

Frequently asked questions

Summary

• For people turning 60 on or after April 1, 2025 (born on or after April 2, 1965), the maximum benefit rate shrinks from 15% to 10%.
• The benefit applies when post-60 wages fall below 75% of the wage at age 60; at 64% or below, the rate is the maximum 10%.
• If a ¥400,000 monthly salary at 60 drops to ¥240,000, the benefit falls from ¥36,000 to ¥24,000 a month — a ¥720,000 difference over five years.
• Apply through your employer: the first application is due within 4 months, then every 2 months after that. Confirm whether your employer will file it when you sign the re-employment contract.
• The benefit is tax-free. Whether the employer makes up the cut is a point to negotiate when agreeing to re-employment terms.

Reference links (sources)

This article is based on the materials below. Figures such as the payment ceiling are revised every year on 1 August, so please check the latest amounts in the Hello Work materials.

• MHLW, From 1 April 2025 the benefit rate of the continued employment benefit for older workers changes (who is affected, 15% to 10%, the leaflet with the formula)
• Hello Work Internet Service, Continued employment benefit for older workers (eligibility, 10% at 64% or less, the application procedure)
• MHLW, From 1 August 2026 the payment ceiling changes (payment ceiling 397,369 yen, minimum 2,562 yen, wage cap 522,000 yen)
• Japan Pension Service, Pension adjustment when you receive the continued employment benefit for older workers

Note: this article is general information. The amounts are estimates and vary with how the wage is made up and with the drop ratio. For an individual decision, check with Hello Work or your employer.