On Friday (April 3), Prime Minister Shinzo Abe and his ruling Liberal Democratic Party announced that the government will provide 300,000 yen in cash to each household suffering from falling incomes amid the spread of the new coronavirus.
This decision was agreed upon after LDP policy chief Fumio Kishida suggested to the prime minister that 300,000 yen should be given to each household whose income has decreased to a certain level.
Gov’t to Hand out JPY 300,000 Cash Assistance to All Households in Need
According to officials, about 10 million of Japan’s 58 million households are expected to be eligible for the cash program, a key pillar of an emergency economic package that the government plans to compile Tuesday (April 7) the earliest, as shared in a report by Japan Today.
Earlier, the government was considering giving 200,000 yen to each household in need, but the premier was in agreement with the proposal to raise the amount as he believes more drastic support is necessary.
The cash program will be funded by a supplementary budget for this fiscal year that the government wants to pass in the Diet before the Golden Week holiday starts at the end of the month.
Notably, there won’t be a set household income limit for the cash handout, which is also tax-free, as per officials knowledgeable on the matter.
The reason for this being, setting an income limit would require officials to check individual incomes, which would take a lot of time.
Instead, the government shall employ an unprecedented method (to judge who should receive the cash assistance).
According to Yasutoshi Nishimura, the minister in charge of economic and fiscal policy, recipients will be limited to those who are facing livelihood difficulties and that civil servants, politicians and major corporate executives who have not been significantly affected by the economic impact of the virus outbreak, for example, will be excluded from the scheme.
In the meantime, the government will work out details such as the level of income falls that would qualify households for the program and how applicants should file requests for the support with municipal governments.
For his part, Prime Minister Abe shared that the government will provide cash “as soon as possible” not only to households but also to small and mid-sized business operators that have seen their revenues drop.
Abe also noted that the package to tackle the coronavirus will be larger than the 56.8 trillion yen emergency package compiled in April 2009 following the previous year’s global financial crisis.
The LDP has requested a 60 trillion yen package, including 20 trillion yen of fiscal spending.
In response to the 2008 financial crisis following the collapse of Lehman Brothers Holdings Inc., the government set aside about 2 trillion yen to provide Japanese citizens with 12,000 yen, with people aged 65 or older, and 18 or younger, receiving an additional 8,000 yen.
However, Finance Minister Taro Aso, who was prime minister during the 2008 crisis, noted that experience of the 2009 cash handouts showed that providing cash to households across the board would be “meaningless.”