Japan's nenkin pension: take the refund or keep the years?

You can't opt out of Japan's pension while you live there, but you can get part of it back when you leave. Whether you should is the real question.

The short version

• Almost everyone living in Japan pays into the public pension (nenkin): the National Pension, or the Employees' Pension through your employer [1][2].
• Leave Japan before you've built up 10 years and you can claim a lump-sum withdrawal payment, capped at 60 months of contributions. You must claim within two years of losing your Japanese address [2].
• The Employees' Pension part of the refund has 20.42% tax withheld. You can usually get that back, but only through a tax representative in Japan [2].
• Claiming the refund wipes those years. They can no longer count towards a Japanese pension or be added to your Australian residence under the Australia–Japan social security agreement [2][3].
• The agreement has been in force since 1 January 2009. It lets Japanese coverage help you reach the Age Pension's 10-year residence test and lets Australian residence help you qualify for a Japanese pension [3][4][5].

How Japan's pension works when you're in Tokyo

Australia's retirement system has two pillars you know well: compulsory super paid by your employer, and a means-tested Age Pension paid from general tax. Japan works differently. Its public pension is a contributory social insurance scheme, and you pay in directly.

The Japan Pension Service sends you a Basic Pension Number Notice (or an older blue pension handbook). Keep it safe; you need it to claim anything later [2].

Most Australians in Tokyo on a work visa land in the Employees' Pension through their employer. If you're on a working holiday, studying or self-employed, the ward will sign you up for the National Pension when you register your address. Students and people on low incomes can apply for exemptions or deferrals. Our guide to your residence card and ward registration explains how registration links to pension and health insurance.

The lump-sum withdrawal payment

Japan calls it the dattai ichijikin, or Lump-sum Withdrawal Payment. It exists because most foreign residents won't stay long enough to earn a Japanese pension.

Who can claim

According to the Japan Pension Service's claim guide, updated for the April 2026 to March 2027 year, you must meet all of these [2]:

• you aren't a Japanese national
• you have at least six months of paid National Pension contributions or six months in the Employees' Pension
• you no longer have an address in Japan on the day the claim is received
• you've never been entitled to a Japanese pension, including a disability allowance
• your total coverage period is under 120 months (10 years), counting periods under social security agreements.

Hit 10 years and the refund is off the table, because by then you qualify for an actual Japanese pension.

How much you get back

The refund is capped at 60 months for coverage ending from April 2021 onwards. Before that, the cap was 36 months [2]. If you've paid for 61 months or more, you only get 60 months' worth, and all your earlier Japanese periods are voided anyway.

For the National Pension, the Japan Pension Service publishes the amounts for a final contribution month between April 2026 and March 2027 [2]:

For the Employees' Pension, the refund is your average standard monthly salary multiplied by a payment rate. For a final month after April 2021, the rate runs from 0.5 for six to 11 months up to 5.5 for 60 months or more [2]. As a rough picture, someone on an average standard monthly salary of ¥400,000 who paid in for five years would get about 5.5 times that, before tax. Your actual figure depends on your recorded salary and when you left.

Neither refund includes your employer's share. That money stays in Japan.

The 20.42% tax and how to get it back

The National Pension refund isn't taxed. The Employees' Pension refund is paid to you as a non-resident with 20.42% income tax withheld [2]. You can claim that tax back, but the process runs through Japan's tax system, not the pension service:

1. Before you leave, lodge a Notification of Tax Agent with the tax office for your last address. Your agent must have a Japanese address. A friend, colleague or tax accountant can do it.
2. When your refund arrives, the Japan Pension Service posts you a Notice of Lump-sum Withdrawal Payment Determination. Send the original to your tax agent.
3. Your agent files a return for the refund of tax on retirement income at the same tax office. If you didn't appoint them before leaving, the notification is lodged with this return [2].

Done right, most or all of the 20.42% usually comes back. Skip this and you've left a fifth of the Employees' Pension refund in Japan. Our guide to Japanese tax for Australians explains tax representatives in more detail.

How to claim, step by step

The Japan Pension Service's English claim form lists everything [2]:

1. File your moving-out notification at your ward office before you fly. This proves you've given up your Japanese address. Without it you'll need a certificate showing your resident record has been deleted.
2. Watch your re-entry permit. If you leave on a re-entry permit without filing the moving-out notice, you stay in the National Pension until the permit expires and can't claim yet.
3. Get your paperwork together: a passport copy showing your name, date of birth, nationality, signature and status of residence; your Basic Pension Number Notice or pension handbook; and a bank certificate or statement showing your name, bank, branch, account number and SWIFT code.
4. Use an overseas account. Japan Post Bank accounts aren't accepted. An Australian account works well.
5. Post the claim to the Japan Pension Service (Foreign Business Group) in Suginami-ku, Tokyo. It must arrive on or after your moving-out date.
6. Claim within two years of the date you stopped having a Japanese address. After that, the money is gone [1][2].
7. Sort the tax refund through your tax agent once the determination notice arrives.

Payment usually takes several months. If you come back to Japan later and work again, you can claim again for the new period.

The Australia–Japan social security agreement

Australia and Japan signed a social security agreement in Canberra in 2007, and it started on 1 January 2009 [5]. It covers Australia's Age Pension and superannuation guarantee law, and Japan's National Pension, Employees' Pension Insurance and mutual aid pensions [3].

Totalisation: adding your years together

The agreement lets each country count time in the other towards its own minimum period:

• Age Pension: your Australian residence plus Japanese coverage must add up to at least 10 years. If you claim from outside Australia, you generally need at least 12 months of Australian working life residence, with six months in one block [4].
• Japanese pension: Japan requires 10 years of coverage to pay an old-age pension. Australian working life residence can help you reach that, and Japan then pays a pension proportional to your Japanese years [3][2].

The catch: if you take the lump-sum refund, those Japanese years disappear. The Department of Social Services says a person who takes a refund cannot receive a Japanese pension for those contributions and cannot use those periods to qualify for an Australian pension [5].

No double contributions on a posting

If your Australian employer sends you to Tokyo temporarily, the agreement lets you stay in the Australian system (superannuation guarantee) for up to five years, instead of paying into Japan's pension too [3]. The ATO administers this side of the agreement, so your employer applies through it before you go [5]. Holders of a certificate of coverage are also exempt from ward-run health insurance; Minato City's guide notes this exemption [6].

Refund or keep the years?

Japanese and Australian pensions can be claimed from either country. Services Australia's International Services line is 131 673 from within Australia, or +61 3 6222 3455 from overseas, and the Japan Pension Service can be reached on +81 3 6700 1165 [4].

The Australian side

• Super: you can't move Japanese pension money into Australian super, and a refund paid to your Australian account is just cash. Talk to your fund about your own contributions; see your super while you live overseas.
• Tax: if you're an Australian tax resident when the refund lands, ask the ATO or a registered tax agent how to report it. Keep the Japanese determination notice and tax paperwork.
• Age Pension later: Services Australia means-tests the Age Pension. A Japanese pension counts as income [3][4].

Before you book your flight home, ask in Cooee Japan, our Facebook group for Australians in Japan, who has claimed a refund recently and how long it took.

Sources

1. Lump-sum Withdrawal Payments – Japan Pension Service
2. Lump-sum Withdrawal Payment claim form and guide (English), April 2026 edition – Japan Pension Service
3. Agreement between Australia and Japan on Social Security – Department of Social Services
4. International Social Security Agreement between Australia and Japan (July 2025) – Services Australia
5. Social Security Agreement with Japan: frequently asked questions – Department of Social Services
6. National Health Insurance System – Minato City

Keep reading

• Japanese tax for Australians: the year-two resident tax shock
• Health insurance in Tokyo: shakai hoken, NHI and the 30% you pay
• Centrelink and the Age Pension when you live abroad
• Moving back to Australia: the return checklist