Japan's National Pension Payment Rate Hits 79.6%, Rising for a 14th Year — Yet Fewer Months Are Actually Being Paid

The share of National Pension premiums being paid has gone up again. The current-year payment rate for fiscal 2025 premiums, published in July 2026 by the Pension Bureau of the Ministry of Health, Labour and Welfare, was 79.56%[1], up 1.00 point from 78.56% the year before. Measured from a low of 58.6% for fiscal 2011 premiums[2], that is a fourteenth consecutive rise.

The same report puts Category 1 insured persons at 13.57 million[3], down 110,000 from a year earlier. This is the category for the self-employed, students, and people whose workplace does not enrol them in social insurance, and its numbers keep falling. Across the whole public pension system there are 67.59 million people, of whom 670,000 have not paid for 24 months.

That much made the headlines. Open up the indicator itself, though, and the story changes.

The payment rate is the number of months paid divided by the number of months due. The numerator, months paid, came to 71.08 million[4] for fiscal 2025 premiums. Four years earlier, for fiscal 2021 premiums, it was 71.28 million[5]. That is a fall of 200,000 months, small but a fall.

The denominator, months due, came to 89.34 million[4] for fiscal 2025. Four years earlier it was 96.52 million[5]. It shrank by 7.18 million months, or 7.4%.

No more is being paid. The rate still climbed 5.7 points, because the number doing the dividing got smaller.

So what left the denominator? There are two channels.

The first is exemption and deferral. A note in the report states plainly that months covered by statutory exemption, full application-based exemption, the student deferral scheme, general deferral, and maternity exemption are not counted as months due. Months the system itself has decided need not be paid never enter the divisor at all. At the end of fiscal 2025, among Category 1 insured persons, 11.0% held a statutory exemption, 17.1% a full application-based exemption, 12.0% a student deferral, and 4.4% a general deferral[6]. Taken together, 44% sit outside the calculation.

The second is migration into the Employees' Pension. Japan has been widening, step by step, the range of part-time workers enrolled in the Employees' Pension and employee health insurance. Under this expansion of employee insurance coverage, the firm-size threshold fell from over 500 employees when the scheme took effect in October 2016, to over 100 in October 2022, and over 50 in October 2024[7].

The scale of that migration shows up in the category counts. Category 3 insured persons, the dependent spouses of employees, fell from 7.63 million to 6.04 million, a drop of 1.59 million[8]. Over the same four years, part-time workers within the Employees' Pension rose from 570,000 to 1.23 million[8], a factor of 2.2.

Category 1 itself churns hard. In fiscal 2025, 4.81 million people[9] entered the category, 3.50 million of them from Category 2 and 290,000 from Category 3, while 4.92 million left. Behind a net fall of 110,000, roughly five million people change places every year.

This flow will get stronger. The 2025 pension reform removes the firm-size requirement in stages, extending coverage to firms with over 35 employees in October 2027, over 20 in October 2029, and over 10 in October 2032[7], before abolishing the threshold entirely in October 2035.

What the payment rate measures is whether the people still obliged to pay have done so. It does not measure how much of the working population the system holds.

The awkward part is that both channels draining the denominator are desirable in themselves. Exemption and deferral keep people who cannot pay from becoming defaulters. Coverage expansion moves people into the Employees' Pension, where what they eventually receive is larger. Nothing bad is happening. Both, nonetheless, push the payment rate up. Read the rising indicator as an improvement in the system and cause and effect swap places.

Nor is it true that payment behaviour has failed to improve. The report breaks the 1.00-point change down by the attributes of the insured, and the contribution from people who had months due in both years comes to 1.35 points[10], more than the whole change. Among those under a continuous obligation, payment really has got better. What pulls the figure back down is the churning population. A shrinking denominator does not explain everything.

So who is left in Category 1? By age, those aged 20 to 24 make up 25.1%[11], the largest group, followed by 55 to 59 year olds at 14.6%. The average age is 39.1. What remains is students, people who work outside an employment relationship, and people who have fallen out of employment. Since the Employees' Pension draws off the forms of work with an identifiable employer, this skew will sharpen as coverage widens.

And the months that left the denominator do not come back as pension. According to the Japan Pension Service, a fully exempted period counts for only half of what a fully paid period would add to the basic old-age pension. Student and general deferrals count towards the years needed to qualify at all, but not towards the amount. Premiums can be paid retroactively within ten years; if they are not, the gap stays.

The months of 5.95 million people that are pushing the rate up are, at the same time, thinning what those people will receive. When one indicator rises, some other number is falling. That asymmetry is unavoidable as long as the health of a system is measured as a ratio. Follow the year-on-year change without checking how the denominator is defined, and relief granted and payment made get counted as the same improvement.

What a single ratio leaves out is the same problem taken up in designing outcome indicators（このサイトの記事）. Policy exclusion and non-take-up（このサイトの記事）, which deals with people a programme never reaches, is also a question of how to count those placed outside the denominator. In pensions, where the generational gap（このサイトの記事） concerns the split between cohorts, this is the split within one, over who stays inside the system. The payment rate may well rise every year. What needs opening up every year is the reason it did.

Further Reading

• 年金制度改正の解説 2025年（令和7年） (Commentary on the 2025 Pension Reform)（外部サイト、新しいタブで開きます） (Shakai Hoken Kenkyusho, September 2025). A practitioner's commentary on the 2025 pension reform discussed above, following the amended provisions clause by clause, including the expansion of employee insurance coverage. It shows exactly how the phased removal of the firm-size requirement was written into law.

References

National Pension Enrolment and Premium Payment Status, FY2025 — Pension Bureau, Ministry of Health, Labour and Welfare (2026). Ministry of Health, Labour and Welfare

How the Pension System Works, Section 9: Expansion of Employee Insurance Coverage — Ministry of Health, Labour and Welfare (2026). Ministry of Health, Labour and Welfare

National Pension Premium Exemption and Deferral Schemes — Japan Pension Service (2026). Japan Pension Service

National Pension Premium Student Deferral Scheme — Japan Pension Service (2026). Japan Pension Service

Outline of Employees' Pension Insurance and National Pension Operations, FY2024 — Pension Bureau, Ministry of Health, Labour and Welfare (2025). Ministry of Health, Labour and Welfare