Tip 228: Withdraw Japan Pension Lump Sum

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I blogged previously on the need for daddies to know daily business processes in a new land, as well as the cash gift I received from the Japanese ward office. After leaving Japan, I applied for the lump-sum withdrawal of my Japanese pension and after waiting for over a year, I was pleasantly surprised that I got 1.2 million yen in my bank account.

I will attempt to outline the steps that any foreigner ought to do to take advantage of this privilege of being a foreigner in Japan. It is a proud statement from the Japanese government that they do not need outsider's help to support the local aging society.

First off, to qualify for this scheme, you need to have previously contributed to the pension scheme for a minimum of 6 months and have received a blue book. For full time employees, pension is automatically deducted from your salary every month. When you leave Japan permanently, no longer own any address and submit your gaijin card at the airport, you are entitled to submit an application form by mail from outside of Japan to the pension office to withdraw a maximum of 36 months of your pension contribution.

This seems pretty straight forward, but knowing the Japanese bureaucracy, there are many do's and don'ts in order to get your withdrawal approved faster.

The fastest approval can take 2 months, while the average is around four and a half months according to this website. The withdrawal form stated that the office would take 6 months to process the application.

Mine took much longer as the pension office wrote to my Malaysian address through snail mail stating that my passport photocopy was not clear and that I should contact the ward office where I was previously registered since they have no records of my departure. The reason being I did not surrender my gaijin card. I had not done so because I had wanted to keep my marriage visa active since it was still valid for another 1.5 years. I then wrote a Japanese letter to the ward office and the pension office stating my departure date clearly and proof of residence outside Japan. Alas I was successful and managed to find a way around Japanese bureaucracy.

If you pay attention to detail when filling the form, you do not need agents to do the job for you and can get the payment quick. First, decide if you want the payment made to a bank in Japan or a bank overseas. Whichever the case, you need a bank stamp/seal on the form as proof that the bank has endorsed your application. If your bank does not have a seal, then get them to write a letter identifying your bank account.

As I routed payment to my Japanese bank account, I had to bring the form to the bank before leaving Japan. I still use my Japanese bank to pay my mortgage, plus I would not lose any exchange rate fees routing to a bank overseas. The pension office would not know the existence of your properties if you do not state it in your application form.

You can download the lump-sum withdrawal form from the official website here. English instructions are stated clearly so you need not call the office in a language other than Japanese :)

As I blog, I just discovered that the 20% tax imposed on the payment can be claimed in full from the tax office. It can take as quick as 1 week, but you need to provide the pension payment receipt, as well as a Japanese bank account. Foreigners have been advised to get a representative living in Japan to act on their behalf, but I will try to write to the tax office with my Japanese bank details. If I am successful, I will report on its progress.

You can download the Japanese form for tax refund of your pension. Address of all tax offices in Tokyo can be found on their website here.

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(Photos show Haruka a little moody in the hot weather with daddy's lingering photo taking at the Singapore Universal Studios).