Osaka City Seeks Review of Disability Employment Add-On System

By Barrier Free Japan

December 12 2025

Osaka City – Osaka City has asked the health ministry to revise rules governing add-on payments for disability employment support, amid suspicions that three local Type-A employment support offices received excessive funds, city officials said Wednesday. As the Yomiuri Shimbun reported on December 11, the city has cited the absence of an upper limit on the number of “settled workers” — individuals who remain in regular employment for six months or more — as a key structural problem.

According to the city, the three offices, linked to welfare services firm Kizuna Holdings, reported around 200 such workers annually for fiscal 2024 and 2025 by repeatedly placing service users in regular employment as in-house staff for six months before returning them to beneficiary status. The offices received several billion yen in add-on payments based on these figures, prompting the city to launch an audit. A separate Osaka Prefecture survey of Type-A offices found an average of just 1.3 people per office who remained in regular employment for six months or longer in fiscal 2024.

Osaka City sent its request for system improvements to the Ministry of Health, Labour and Welfare’s Disability Welfare Division on Dec. 3, and city officials met ministry staff on Dec. 9 to explain their concerns. The city is also calling for changes to the ministry’s “three-year rule,” introduced in April and intended to prevent repeated claims for the same user, arguing that individuals can again become eligible after three years and allow offices to inflate numbers.

In response to the case, Osaka City Assembly members plan to submit an opinion statement on Thursday urging the central government to undertake a fundamental review of the add-on system. The draft describes the suspected improper claims as a “serious issue that could undermine the foundations of the disability welfare system” and calls for measures such as setting add-on payment caps based on office size.