Higashiosaka Disability Employment Support Providers Penalized for Fraudulent Claims; Providers Dispute Allegations

By Barrier Free Japan

May 28 2025

OSAKA – NHK has reported that the city of Higashiosaka announced that it has decided to revoke the designation of two offices operated by a nonprofit organization (NPO) providing employment support for people with disabilities, after determining that they fraudulently received over 120 million yen in subsidies by falsifying service provision records. The city is also demanding repayment of the funds.

One of the offices responded to inquiries by stating that it plans to contest the decision in court and will seek a reassessment of the penalties.

The two offices subject to the penalties are the “Esther Disability Welfare Service Center” and “Step,” both operated by the NPO Fuyo Welfare Association, which provides what is referred to as “Type B” employment support services for people with disabilities in Higashiosaka.

According to the city’s announcement, the two offices allegedly engaged in practices such as:

Not reducing subsidy claims even though the number of users significantly exceeded capacity

Misrepresenting staffing levels to appear compliant

As a result, the city determined that over a four-and-a-half-year period ending last October, they fraudulently received more than 120 million yen in benefits.

Higashiosaka is seeking the return of approximately 170 million yen, including legally mandated additional payments, and has decided to revoke the offices’ designation as of July 1.

In response, the head of “Step,” one of the offices, told NHK, “We have a different understanding of the current situation and plan to contest the decision in court. We will be seeking a reassessment of the penalty.”