Featured Article From Global Newsletter - June-July 2025
By Mr. Kenichi Furuichi, Vice President of Japan National Council of Social Welfare (JNCSW)
1. The Challenges Faced by Japanese Society and Responses during the COVID-19 Pandemic
The COVID-19 pandemic further highlighted the vulnerabilities within Japanese society. Those facing financial hardship expanded across generations and demographic groups to an unprecedented extent. For example, the government’s declaration of a state of emergency led to restrictions on social activities, which initially caused an economic downturn and a decrease in job opportunities and business income. As a result, financial distress spread, particularly among non-regular employees and self-employed individuals. Moreover, the extensive restrictions on movement decreased interpersonal connections, leading to an increase in social isolation and a decline in the physical and cognitive abilities of the elderly. Additionally, teleworking and staying at home also had negative effects on family relationships, and there were reports of domestic violence and abuse cases. The pandemic served as a catalyst that revealed the fragility of people who, despite already facing various life difficulties, had previously managed to lead independent lives. Even now, after the pandemic has subsided, its effects continue to be felt across Japanese society.
The COVID-19 pandemic was a catastrophe for Japanese society, comparable to the spread of the "Spanish flu" about 100 years ago. Initially, there was no clear solution, and like other countries, responses were trial and error. The government’s response to COVID-19 began with measures to prevent the virus’s spread, followed by the establishment of medical infrastructure, the development of vaccines and treatments, and the promotion of vaccination. Along with the declaration of states of emergency and other restrictions, economic support measures were also implemented. When providing welfare services at facilities or at home, service providers, guided by information from the government, worked to implement infection prevention and management protocols and respond appropriately in the event of an outbreak. Social welfare organizations also provided mutual support. However, the costs of infection control measures, such as disinfection, and the need for staff replacements due to infections led to increased operational costs. For services like day care, there was a sharp decrease in usage due to behavioral restrictions and concerns over infection, leading to some providers suspending or even discontinuing their services. In response to these circumstances, the government continued to adopt various measures. Notably, as part of a safety net policy, cash benefits, subsidies for businesses, relief payments, and relaxed requirements for support measures were provided to individuals, households, workers, and even self-employed individuals.
The following section explains the special loan scheme for living welfare funds that was implemented by the National Council of Social Welfare (JNCSW) at the request of the government.
2. National Emergency Economic Measures and Safety Net Policies
The special welfare loans provided by Social Welfare Councils across the country were among the earliest measures to support the economic hardship faced by diverse groups of people in need during the pandemic. The welfare loan system originated in 1955 as the Household Rehabilitation Fund Loan Program, which was launched as a social welfare initiative based on funds from the national and local governments. This system began at the Prefectural Social Welfare Councils. Although the program has evolved in response to changes in the social environment, it continues to play a significant role in supporting the rebuilding of the lives of low-income individuals and families.
Table 1: Various Profiles of People in Economic Hardship (Estimated by Special Loan Recipients)
| Timing of Onset of Financial Hardship | People who fell into hardship due to the COVID-19 pandemic People who were already in hardship before the pandemic |
| Various Forms of Employment | Employees (including non-regular workers, unemployed) Self-employed (e.g., taxi drivers, food service industry), freelancers |
| Various Household Structures | Single-person households (including victims of domestic violence) Multi-person households (e.g., living with elderly parents, single mothers/fathers) |
| Wide Age Range | From teens to those in their 60s |
| Diverse Borrowers | People of various nationalities |
During the COVID-19 pandemic, the loan conditions were significantly relaxed and implemented as special welfare loans. Special loans are typically offered during large-scale disasters and are time limited. However, the special loans during the COVID-19 pandemic were an unprecedented relaxation of the conditions. For example, the eligibility criteria were greatly expanded to include “households with reduced income.” Additionally, while communication with users is normally crucial for providing life support, due to the need to minimize the risk of infection, applications were also accepted via postal mail. However, this later led to difficulties in providing effective life support. At the government’s request, the special loans were initiated quickly, and the Social Welfare Councils responded to repeated extensions and changes in operational procedures. They also provided various independent initiatives and consultation support to individuals in economic hardship who were not eligible for loans. This could only be achieved because Social Welfare Councils have long-standing connections and a history of supporting the community.
The special loans began to be repaid in January 2023, with a repayment period of 10 years. What is most important now is how to support the rebuilding of the lives of those who borrowed the loans. Together with the loan recipients, we must consider their life reconstruction and repayment plans, using various methods, including loan forgiveness, repayment deferrals, and utilizing other systems. Providing continuous support in this way is, in our view, the most important challenge we face today.
3. Future Support for People in Financial Hardship
To analyze the challenges that arose during the COVID-19 pandemic, the National Council of Social Welfare convened a committee of academic experts and welfare professionals. This committee analyzed and evaluated the outcomes of the Special Emergency Welfare Loans, the underlying issues revealed, and the practices of welfare workers. Their findings were compiled into the following seven recommendations:
① Based on the actual situation of the COVID- 19 special loans and awareness of issues on the ground, the government should promptly consider and implement support measures for people in financial hardship during emergencies and disasters.
② Review the future role of the Public Assistance Loan Program in light of the experience with COVID-19 special loans and develop the support and consultation systems within the social welfare councils necessary for that purpose.
③ Take necessary measures in terms of both funding and personnel to ensure that the public assistance system reaches those who need it.
④ Enhance the foundation of both the Self- Reliance Support System for the Needy and the Public Assistance System and enable them to work together effectively.
⑤ Utilize existing social welfare corporations and social welfare faci
lities in supporting people in financial hardship. ⑥ Incorporate "housing" within the framework of social security and work towards establishing a "comprehensive support system with housing."
⑦ Expand support for self-employed and freelance workers, who have emerged as a new group facing hardship, and consider introducing systems such suspension.
Rebuilding the lives of people in financial hardship who are burdened with large loan debts is no easy task. Starting a new life while carrying heavy debt can be seen as starting from a negative position. There are many points to consider regarding how to implement personalized, comprehensive, and continuous support tailored to the diverse circumstances of each individual.
