Social security-related governmental budget Japan FY 2015-2024, by purpose

The Japanese government assigned about 37.7 trillion Japanese yen of its annual budget for the fiscal year 2024 to social security, of which approximately 13.4 trillion yen was to be dispersed to pension-related measures. Around 12.4 trillion yen of the social security budget was intended for healthcare, and over 3.7 trillion yen for long-term care, marking a consistent upward trend in those areas. 

 The current situation of long-term care in Japan 

The annual expenses for the long-term care insurance (LTCI) system have been on a steady rise over consecutive years in Japan. LTCI is a mandatory program that provides benefits for long-term care to people aged 65 and over regardless of income, with everyone having the same benefits. This growing trend of rising annual expenses is driven by the growing number of people requiring long-term nursing care or support. Despite the increasing number of certified care workers, the shortage of healthcare workers remains an issue, posing a challenge in meeting the demand for care services.

 Ageing population and demand for long-term care 

The increasing demand for long-term care in Japan is closely connected to the growing share of the population aged 65 years and older. This demographic shift is primarily attributed to a low birth rate and high life expectancy, with Japan holding the top rank globally in average life expectancy. This social issue poses a significant challenge in Japan as it contributes to a decline in the working-age workforce. Additionally, the overall decrease in the population may potentially hinder economic activity in Japan.