Osaka Firm Suspected of Tens of Billions in Improper Disability Work Subsidies

From Kyodo via Yahoo! Japan

November 5 2025

OSAKA – A welfare-related company based in Osaka City is suspected of having improperly received tens of billions of yen in disability employment support subsidies (payments) since fiscal 2024, city officials revealed on November 5. The company allegedly exploited a system that increases subsidy amounts based on the number of disabled workers who find employment in regular companies. Osaka City has launched an audit under the Comprehensive Support for Persons with Disabilities Act and is considering demanding repayment.

The company in question is Kizuna Holdings (HD). In response to media inquiries, the company stated: “We are confirming the facts and will take appropriate action. We will continue to sincerely engage in employment support for persons with disabilities in compliance with laws and regulations.”

Subsidiaries and related NPOs under Kizuna HD operate several Type A “Continuous Employment Support” offices in Osaka City. Type A offices are part of the disability welfare service system, providing workplaces and training for persons with disabilities who have difficulty working in the general labor market. Under the system, when a user leaves a Type A office and continues working at a regular company for six months or longer, the office receives additional subsidy payments based on the number of such cases, as a way of evaluating employment retention.

According to sources, Kizuna HD had users employed at its Type A offices perform data entry and similar tasks within the group and reclassified them as being in “regular employment.” After six months, they were returned to the Type A program and then shifted back again to “regular employment,” repeatedly cycling between the two statuses.