Japan: will seniors need to pay more for long-term care?

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Tokyo lacks long-term care establishments for elderly people despite increasing demand. Currently, Japan has the oldest population in the world. A quarter of its population is over 65 years old. Moreover, by 2060, about 40% of the Japanese population will be 65 and above.

Despite that, there is a lack of long term care establishments to care the elderly. In fact, there is an extreme shortage of workers for these homes and impending cuts of government aids.

An increasing demand with a lack of supply and aids

About 520,000 Japanese seniors are on waiting lists for placements in nursing homes nationwide, for the following reasons.

On one hand, the Prime Minister Shinzo Abe has urged the private sector to raise wages to beat two decades of deflation. Rising public debt is driving his government to cut reimbursements for nursing homes: due to its debt, the country have to reduce its spending. The central and local governments reduce subsidies assigned to Kokei (public institutions of elderly accommodation) because these non-profit establishments are authorized to accumulate up to 30 % of profits. The Japanese government asked these establishments to dedicate a part of their profits to finance their residents.

Reducing costs also means more spending for the elderly. In fact, from now on, dependent and disadvantaged elderly who are admitted in tokuyo (care homes subsidized by the central government) have to pay 20 % of their accommodation and care expenses instead of the 10 % they paid before.

On the other hand, nursing homes suffer from staff shortage due to their labour conditions. The monthly average salary of workers in elderly care was 234,000 yen ($1,974) in 2013, compared with 324,000 yen across all industries in Japan. By 2025, Japan will need 2.5 million caregivers for its elderly but the country’s health ministry forecasts that it will be short of 300,000 workers by then.

Furthermore, to care for older relatives, more and more people quit or change their jobs. According to a study by the internal affairs ministry about 490,000 Japanese workers quit or changed jobs in order to care for older relatives between 2007 and 2012.

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