Frustrated Japan firms give up on virus subsidy system amid red tape, long wait

Despite the Japanese government's implementation of a system in which employers can apply for aid to pay their employees who are temporarily out of work due to business closures as a result of the novel coronavirus outbreak, employers are hesitant to apply for the subsidies because of the complexity of the application system and the time it takes for the aid's provision.

Consultation offices have been flooded with employers calling with questions, and the process for distributing the funds has been disrupted. A week has passed since Prime Minister Shinzo Abe declared a state of emergency for Tokyo and six other prefectures. And while the Ministry of Health, Labor and Welfare is trying to improve the steps necessary to obtain aid, business owners worry that at this rate, they will go out of business before they receive any money from the government.

In response to the spread of the novel coronavirus, the labor ministry has called on businesses to make use of employment adjustment subsidies, which subsidize leave allowances paid to employees of businesses whose performance has tanked. Under the current circumstances, the businesses eligible for aid have been expanded, and the aid percentage has been raised. Between February and April 3, a total of 2,859 leave plans -- which are necessary for businesses to receive aid under the system -- had been submitted, of which 214 applications for subsidies were actually filed. There have been just two cases in which subsidies have been provided.

In the seven prefectures in which the central government declared a state of emergency, numerous consultations have been received by the labor bureaus that process the subsidy applications. The Tokyo Labor Bureau said that it was too busy handling consultations to respond to questions from the Mainichi Shimbun. To combat the risk of infection, the labor bureaus of some prefectures including Kanagawa and Hyogo designated in-person consultations regarding the government subsidy by reservation only.

In Hokkaido, which put out its own state of emergency declaration from February to March, the labor bureau has received at least 300 consultations per day since the beginning of March, but has only decided to give out subsidies to about 10 businesses. Meanwhile, since March, the Aichi Labor Bureau has received nearly 10,000 consultations, 192 leave plans and 22 applications. It has subsidized just one business operator. The labor bureau has commissioned certified social insurance labor consultants to take consultations at local chambers of commerce. Still, the waiting time is around four hours.

Many small business operators cannot afford to hire certified social insurance labor consultants to do the paperwork for them, and must go through the application process themselves. Akinari Ota, 53, who runs a cafe and bar in Iwate Prefecture was told at a consultation counter that the wait to receive a subsidy was three months, and decided against applying for one. He still operates a boxed "bento" meal delivery service, but the cafe itself is closed. "I have to pay my employees leave allowance before I can receive the subsidy. If I waited for the subsidy to come through, my business wouldn't be able to stay afloat," he said. He added that he would try to get by with a special loan from the Japan Finance Corporation.

Furthermore, in cases in which a parent or guardian takes paid leave to stay home because they must look after their children who are home due to school closures, the national government has set up a new system in which it provides employers with a sum of money equivalent to the absent worker's pay. The system also pays freelancers 4,100 yen per day as leave compensation. However, while some 1,000 companies and around 500 individuals have applied for these benefits, only six businesses and six freelancers had received them as of April 5.

(Japanese original by Satoko Nakagawa, Lifestyle and Medical News Department)