As costs double over 10 years, Japan’s Ministry of Finance calls for spending curbs on welfare services for disabled

From The Fukushi Shimbun via Yahoo! Japan

May 19 2026

TOKYO – At the Fiscal System Subcommittee of the Fiscal System Council held on April 28, discussions were also held on the field of disability welfare. The Ministry of Finance stated that the total cost of disability welfare services, combining public expenditures and user co-payments, had reached 4.2 trillion yen as of fiscal year 2024, roughly doubling over the past decade, and expressed the view that it is necessary to curb further cost increases.

Factors behind the rising costs include an increase in the number of users, higher per-person costs, and the expanded entry of for-profit providers. Looking ahead, the ministry intends to move forward with revising the compensation system, including tightening staffing standards.

Regarding Type B Continuous Employment Support services, the ministry highlighted as problematic that facilities where usage time is under four hours have a profit margin of 17%, significantly higher than the overall average. It argued that current compensation levels are excessive and should be revised to a system that more carefully evaluates service quality.

In the area of support for children with disabilities, the number of facilities for child development support and after-school day services has quadrupled over the past decade. With after-school day services also showing a relatively high profit margin of 7.6%, the Ministry of Finance indicated its intention to work on restraining costs.

The ministry also pointed out that, unlike in the elderly care sector, group homes for people with disabilities do not require managers or administrators to hold specific qualifications or undergo mandatory training. It argued that this situation has led to easy market entry and a decline in service quality, and called for a review of standards.

On the other hand, regarding “total volume controls,” which allow local governments to limit the designation of service providers so that supply does not exceed regional needs, the ministry acknowledged that such measures have only limited effectiveness in curbing the growth of service costs.