Japan to Cut Disability Service Provider Fees, Tokyo Raises Concerns

By Barrier Free Japan

January 17 2026

TOKYO – The Ministry of Health, Labour and Welfare has decided to make an extraordinary revision to disability welfare service fees in June 2026, reducing basic compensation for newly established providers of four services, including Continuous Employment Support (Type B), for fiscal 2026.

The reduction will apply solely to new providers, while existing operators will continue to receive current compensation levels. The ministry says the move is intended to rein in the continued growth of disability welfare spending and maintain the sustainability of the system. The policy was presented at a meeting of the Disability Welfare Services Remuneration Revision Review Team on Dec. 16.

Although no objections were formally raised at the meeting, participants expressed concern that lowering fees for new providers could discourage new entrants and fail to resolve service shortages in areas where provision remains limited. Others pointed out that applying uniform reductions across service categories may not reflect differences in service quality or operational costs.

The Tokyo Metropolitan Government has opposed the plan, submitting a request on Dec. 23 to the health ministry and the Children and Families Agency calling for the nationwide fee reduction for new providers to be reconsidered.

Tokyo is currently expanding disability welfare services under its seventh-term plan for fiscal years 2024 to 2026 and warned that changing compensation policy midway through the planning period could disrupt service development. The metropolitan government also cautioned that restricting new market entry could worsen regional disparities and limit access to necessary services for people with disabilities.

Disability welfare service fees are generally revised once every three years, with the next regular revision scheduled for April 2027. Tokyo has argued that changes to basic compensation, which form the foundation of provider operations, should be addressed in the regular revision rather than through an interim measure.