Osaka revokes licenses of Kizuna Holdings units over excess disability subsidies

By Barrier Free Japan

March 30 2026

OSAKA – Osaka City said March 27 it has revoked the operating licenses of four disability employment support facilities run by subsidiaries of Kizuna Holdings, after determining they had improperly received excessive public subsidies tied to employment outcomes for people with disabilities.

Kizuna Holdings operates Type A continuous employment support facilities, where users with disabilities work in structured settings while receiving wages subsidized by public funds, with the aim of transitioning into regular employment.

The city said the facilities were found to have overstated employment results used to calculate payments under a subsidy program that rewards operators when users secure jobs in private companies and remain employed for at least six months. As The Asahi Shimbun reported on March 27th, the company allegedly instructed users to take up short-term employment within affiliated firms, return to the facilities, and then re-enter employment repeatedly, inflating performance figures.

The four facilities subject to the administrative action, “Lian Uchimotomachi,” “Reve,” “Liberala,” and “Miraimu”, will have their designations revoked effective May 1.

According to the city, audits also identified excessive payments totaling about ¥7.1 billion across 75 municipalities in Osaka, Kyoto and Nara prefectures and elsewhere, with the total amount, including Osaka City, reaching roughly ¥15 billion. Reimbursement claims against the company could ultimately exceed ¥20 billion.

Osaka City said it plans to seek repayment of approximately ¥11 billion for fiscal 2024 and 2025, including surcharges imposed under the law, and has begun reviewing the subsidy system amid concerns over its structure.