TOKYONovember 4 (News On Japan) – The ‘1.03 million yen income limit’ raised by People’s Democratic Party leader Tamaki has become an urgent issue for many students and part-time workers. How do they deal with the reality of this policy?
The start of end-of-year festivities has highlighted staffing problems at a busy gyoza restaurant in Tokyo, as workers face adjustments due to the income cap.
At โGyoza Las Vegas Kitasenju,โ known for its signature gyoza style, store manager Morita Masashi explained, โIf they work too much, we will have to cut services at the end of the year.โ
The income ceiling of 1.03 million yen affects the flexibility of part-time workers’ services.
Last month, Tamaki emphasized the urgency of raising this limit, stating: “It is crucial to raise the income threshold of 1.03 million yen.”
Under current rules, exceeding 1.03 million yen results in income tax. For students, this can also mean losing dependent deductions for their parents, leading to higher tax bills and often limiting work hours.
Morita expressed his concerns: “Our star worker really deserves to stay on, but…”
That star is university student Inoda Riku, who has reduced his shifts to just four days this month because of the cap.
โNow I only earn 40,000 to 50,000 yen a month, less than half of the peak income,โ Inoda said. โI had to dip into savings to make up the difference.โ
Inoda wants the 1.03 million yen limit reconsidered so he can work freely. “I would like to work without restraint; I feel like this would lift the restrictions,” he said.
But the problem is not limited to students.
An Osaka woman with two high school daughters who need to pay college tuition faces her own hurdles while working part-time under her husband’s health insurance.
โPrices are rising, but I have to stay within 1.03 million yen,โ she explained. Two years ago, she became even more aware of the border when her husband’s workplace pointed it out.
Although a special spousal deduction allows income up to 1.5 million yen before taxes increase, some companies limit certain benefits to income under 1.03 million yen, and if they exceed 1.06 million or 1.3 million yen, social insurance premiums have to be paid.
The People’s Democratic Party continues to push for change, even as the government warns that changing the threshold could cut tax revenues by as much as 8 trillion yen.
Chief Cabinet Secretary Hayashi said last month: “It is true that the tax cuts would benefit higher incomes more.”
Tamaki countered, “The increase in employment from 1.03 million to 1.78 million yen would mainly benefit low-income people, and provide more support to those with lower incomes.”
The government estimates a revenue loss of 7 to 8 trillion yen due to this adjustment, although Tamaki argued: “Consumers would have more in their pockets, which would boost spending and business activity, likely increasing tax revenues.”
The ‘1.03 million yen ceiling’ established in 1995 may soon be the subject of further negotiations between the Liberal Democrat, Komeito and Democratic parties to discuss a possible reform.
Source: ANN
