Working on Public Assistance: What You Actually Keep

The short answer: you keep the minimum cost of living plus the basic deduction

Public assistance pays the difference. Your assessed income is subtracted from the minimum cost of living, and the remainder is the assistance payment[MHLW implementation guidelines]. Earn more and the assistance payment falls. Even so, every yen you earn leaves you better off.

This site's calculation. Single person aged 20 to 40, Tokyo 23 wards, rent of ¥53,700 or more, commuting cost ¥5,000 a month, the April 2026 standards.

One formula runs through the whole table. Cash in hand = minimum cost of living + basic deduction. At ¥100,000 a month that is ¥130,120 + ¥16,250 = ¥146,370.

The ¥130,120 is made up of livelihood assistance of ¥76,420 and housing assistance of ¥53,700[MHLW, how the livelihood assistance standard is calculated]. From the October 2026 payment the special addition rises by ¥1,000, to ¥131,120[MHLW, review of the fiscal 2026 standards]. The worked examples here use ¥130,120.

There are four earned income deductions. The basic one runs from ¥5,840 to ¥22,760 a month

Four things can come off your pay. Each of them exists to strip out the money that goes out because you work[MHLW implementation guidelines, vice-ministerial notice 8-3].

Necessary expenses are the ones people miss. Nursery fees and after-school care also come off at actual cost, as "childcare for your children"[MHLW implementation guidelines, director's notice Q8-48]. Working single parents should always report them.

The basic deduction is not a flat amount. It is a staircase that rises as your income rises.

Source: MHLW implementation guidelines, appended table 2[MHLW]. This is an extract; the real table moves in steps of ¥4,000.

Worked example: at ¥100,000 a month the payment is ¥52,090 and you keep ¥146,370

Here is the full calculation for a single person in Tokyo's 23 wards earning ¥100,000 a month, in a part-time job with no company social insurance.

This site's calculation. The income tax is an estimate from the monthly withholding table, column A, with no dependants.

Reporting your commuting cost and income tax does not change what you keep. It only gives you back what you paid out of your own pocket. The one thing that lifts what you keep is the basic deduction of ¥16,250, and that lands on top in full.

Assistance ends in the high ¥180,000s a month, around ¥2.2 million a year

Once your assessed income passes the minimum cost of living, assistance ends. The example below assumes company social insurance and a commuting cost of ¥5,000 a month.

This site's calculation. Social insurance premiums and income tax are estimates, and the fiscal 2026 premium rates are not yet confirmed against primary sources. Treat the figures as a guide.

In annual terms the dividing line is around ¥2.2 million. The minimum cost of living moves with your rent and your area grade, though, and joining company social insurance moves it too.

At ¥180,000 a month you keep ¥150,390; at ¥190,000 you keep ¥154,270. Earning ¥10,000 more leaves you with barely ¥4,000 more. Tax and social insurance premiums land all at once, and the government itself acknowledges this step.

Leaving assistance brings the Employment Self-Reliance Benefit, up to ¥100,000

When work brings your assistance to an end, you can receive the Employment Self-Reliance Benefit (shuro jiritsu kyufukin)[MHLW notice Shaen-hatsu 0425 No.3]. It is not a savings account: the amount is worked out when assistance ends and paid as a lump sum. The notice itself gives the reason, that "leaving public assistance brings a burden of taxes and social insurance premiums".

1. Say something as soon as it looks likely that assistance will end. You should be told about the benefit, but asking first is safer.
2. Apply just before assistance ends. That is what the rules require, and after it ends you are too late.
3. Payment comes when the decision is made, or promptly afterwards. It is not counted in the test of whether assistance continues, and the right lapses after two years.

For tax it is occasional income. Because there is a ¥500,000 special deduction, this benefit on its own almost never produces any tax.

Income must be reported every month as a rule. Hiding it can add up to 40%

Income from work must be reported. If you have been assessed as able to work, the rule is every month, whether or not you had income[MHLW implementation guidelines, director's notice Q8-55]. Where pay is steady in regular employment, every three months is acceptable.

Failing to report brings you within the cost recovery provision, article 78 of the Public Assistance Act. The text says an amount "not exceeding the amount obtained by multiplying by 40 per cent" may be collected[Public Assistance Act, article 78]. The 40% is a ceiling, not something that is always added.

Even so, there is nothing to gain by hiding income. Collection follows the rules for national tax collection, and serious cases carry penalties.

What counts as income and what does not

Money other than wages is largely assessed as income too. Allowances reduce the assistance payment by what you receive.

Source: MHLW implementation guidelines, vice-ministerial notice 8-3. The treatment of the benefits follows notice Shaen-ho-hatsu 1220 No.1 of 20 December 2024[MHLW]

For a single parent, the Child Rearing Allowance is assessed in full. In exchange there is the single-parent addition (¥18,800 for one child, area grade 1) and the child-raising addition (¥10,190) on top. You can check the benefits in our list of benefits and reductions for tax-exempt households and in the cost-of-living benefits you can still claim.

While on assistance you pay no resident tax and no national health insurance

The assistance payment itself is not taxed. The related burdens are lifted by law as well.

The statutory exemption is only for people receiving livelihood assistance; those receiving only medical or housing assistance apply for an exemption instead. What that does to your future pension is set out in our guide to National Pension exemptions and deferrals, and the conditions for a resident-tax-exempt household are in the conditions for a resident-tax-exempt household.

Medical care is provided in kind, with nothing to pay at the counter of a designated medical institution. As a rule you cannot own a car, but it is allowed where it is unavoidably needed for commuting and its disposal value is low, among other conditions. You may also hold savings of up to half the minimum cost of living when assistance starts.

There is one thing to do next. Ask the welfare office to work out the minimum cost of living for your household, and check what your assistance payment would be on your current pay.

Summary

• Only the amount remaining after the work income deduction counts as recognized income. What stays in hand is the minimum living cost plus the basic deduction.
• For a single person in Tokyo's 23 wards earning ¥100,000 a month, welfare benefits come to ¥52,090 and the amount in hand is ¥146,370.
• The basic deduction ranges from ¥5,840 to ¥22,760 a month. Childcare costs such as nursery fees and commuting costs can also be deducted as necessary expenses.
• Welfare benefits cut off around the upper ¥180,000s in monthly salary, roughly ¥2.2 million in annual income.
• Upon termination, the employment self-support payment is up to ¥100,000 for a single person. Apply just before termination; income reporting is required monthly in principle.

Sources

• MHLW, public assistance implementation guidelines (in force from 1 April 2026) - the basic deduction table, earned income deductions, necessary expenses, income excluded from assessment
• MHLW, how the livelihood assistance standard is calculated - the split between livelihood and housing assistance
• MHLW, review of the fiscal 2026 livelihood assistance standard - the special addition from October 2026
• MHLW, payment of the Employment Self-Reliance Benefit - the formula, the ceiling, when to apply
• MHLW, treatment of benefits for tax-exempt households - exclusion from assessment, and savings allowed
• e-Gov, Public Assistance Act - the bar on public charges, cost recovery, penalties
• e-Gov, National Pension Act - statutory and applied exemptions

The worked examples apply the MHLW standard amounts and basic deduction table ourselves. Social insurance premiums and income tax are estimates. For your own case, check with the welfare office for your address.