Kizuna Holdings Files Lawsuit Against Osaka City as Repayment Deadline for 11 Billion Yen in Repayment of Disability Employment Subsidies Passes

By Barrier Free Japan

April 30 2026

OSAKA – In the ongoing issue involving the fraudulent receipt of disability employment support bonuses by four “Type A” continuous employment support offices under the umbrella of the Osaka-based welfare company Kizuna Holdings (HD), it has been learned through interviews with both the company and the city that Kizuna HD has filed a lawsuit in the Osaka District Court. The suit seeks to rescind the city’s order to return approximately 11 billion yen, The Yomiuri Shimbun reported on April 27th.

The four facilities involved are Lien Uchimahonmachi, Rêve, Liberara, and Miraim (all located in Osaka City). In March, the city issued an administrative disposition to revoke the facilities’ designations effective May 1, concluding that they had fraudulently received bonuses paid to providers based on the employment track records of persons with disabilities. The city calculated the total amount of fraudulent receipts across multiple municipalities to be approximately 15 billion yen, of which the city demanded the return of 11 billion yen (including penalties) for its portion of the payments. According to the city, the payment was not made by the deadline of the 20th of this month.

The lawsuit was filed on the 17th of this month. The legal entities operating the four facilities are seeking the cancellation of the refund demand. In response to an inquiry from the Yomiuri Shimbun, Kizuna HD stated, “Our group holds a different view regarding [Osaka City’s] assessment of the alleged fraud, and we have filed this suit to contest that point.” The city stated, “We are currently reviewing the details of the complaint and will make a decision after consulting with legal counsel.”

The bonus in question is the “Employment Transition Support System Bonus,” a benefit paid to facilities. It is paid by the municipality where a user resides if a person with a disability who used the facility is subsequently employed by a company or other entity for six months. The purpose is to encourage facilities that provide continuous support for employment.

The four facilities repeatedly received the bonuses by employing users as internal staff for six months or more before returning them to “user” status. The city judged this method to be fraudulent, stating it “goes against the fundamental purpose of the system.”