Japan Govt to set cap on number of ‘retained workers’ used to calculate disability employment subsidies following excessive payments

From The Yomiuri Shimbun via Yahoo! Japan

December 17 2025

OSAKA – It has been learned that the Ministry of Health, Labour and Welfare (MHLW) is making arrangements to set an upper limit on the number of “retained workers” used to calculate support bonuses. This move comes in response to allegations that three “Type A Support Centers for Continuous Employment” in Osaka City received excessive payments. The Ministry revealed this plan on the 16th during a meeting to discuss revisions to the compensation system for disability welfare services.

Type A facilities support “general employment,” where users find jobs at private companies. If an individual remains employed for six months or more, they are classified as a “retained worker,” and the facility receives a bonus from the municipality based on the number of such workers from the previous fiscal year.

Three facilities associated with the Osaka-based welfare company “Kizuna Holdings” reportedly had users repeatedly cycle through six-month employment periods. For the 2024 and 2025 fiscal years, they applied to the city for bonuses based on approximately 200 retained workers per year. Osaka City is currently conducting an audit on suspicion that the facilities improperly received over 2 billion yen in bonuses.

The MHLW discussed the issue following reports by the Yomiuri Shimbun and other outlets regarding these three facilities. Determining that their methods contradicted the intent of the system, the Ministry is considering a cap on the annual number of retained workers. The policy aims to set the limit, in principle, to the total user capacity of the facility. According to Osaka City, each of the three facilities in question has a capacity of 20 people.

Earlier this month, Osaka City had identified the lack of a cap on retained workers as a systemic flaw and requested that the MHLW implement improvements.