Japan considers reducing welfare payments to operators of large disability group homes

By Barrier Free Japan

October 31 2026

TOKYO – Japan’s Health Ministry on Friday proposed reducing welfare payments to operators of large disability group homes for people with disabilities, as part of efforts to discourage the expansion of large facilities and promote more community-based living arrangements.

The proposal was presented at the 67th meeting of the Ministry of Health, Labour and Welfare’s Disability Welfare Remuneration Revision Review Team, which is discussing changes to disability welfare service fees for fiscal 2027.

The ministry is considering raising deduction rates for operators running multiple group homes with capacities of eight or more residents, as well as facilities accommodating 21 or more people. It also proposed extending the deductions to daytime support-type group homes with capacities of between eight and 20 residents.

The ministry said the number of group homes with capacity for at least eight residents increased from 2,066 in fiscal 2015 to 6,655 in fiscal 2024, a roughly 3.2-fold increase over the decade.

Group homes are intended to provide people with disabilities with a domestic living environment in the community. However, the ministry warned that larger facilities risk becoming similar to institutional accommodation, with more uniform support and less individual attention for residents.

It also raised concerns about whether existing financial deductions adequately reflect the operating conditions of large facilities.

According to ministry figures, operators subject to the existing large-scale accommodation deduction recorded an average operating surplus rate of 8.6 percent, compared with 4.9 percent for providers not subject to the deduction.

The difference was particularly pronounced among larger operators. Facilities with 21 or more residents subject to the deduction recorded an average surplus rate of 10.3 percent, compared with 2.3 percent among those not subject to it.

The ministry said the current system may not be sufficiently discouraging the expansion of large-scale accommodation and proposed reviewing deduction rates in light of providers’ operating conditions and management data.

The proposed changes would also cover certain daytime support-type group homes with capacities of between eight and 20 residents, which are currently exempt from the deductions.

However, committee members cautioned that reducing the scale of group home operations could leave some residents without alternative places to live, calling for consideration of the impact on service users.

The ministry plans to continue examining the proposals, taking into account the results of its ongoing survey of disability welfare service providers, before finalizing revisions to service fees for fiscal 2027.