Ordering Compensation for Welfare Reduction

Nagoya High Court ordered the national government to compensate for the reduction of welfare to the low-income families, which had been exercised between 2013 and 2015. The court found that the basis of calculation for the benefit was wrong, and ordered the government to pay ¥10 thousand to each person, turning down the decision of the lower court. The decision would be recognized as a measure for narrowing the gap between rich and poor, which was exacerbated by neo-liberalism upheld by former Prime Minister Jun-ichiro Koizumi or by extremely growth-oriented economic policy of Shinzo Abe. 

In 2013 to 2015, the government reduced the benefit for supporting the cost for food, clothes or utility services in welfare, because of the decline of commodity prices in deflation economy at the time. The total welfare downed by 6.5% in average and the government cut the spendings by ¥67 billion in those three years.

 

According to the editorial of Tokyo Shimbun, Ministry of Health, Labour and Welfare used its own index in the calculation of reduction, which indicated decline of commodity price by 4.78% in the previous four years. But the consumer price index of Ministry for Internal Affairs in the same time period was 2.35% of decline. MHLW used extremely deflationary index.

 

The reduction damaged ordinary life of low-income families. The thirteen recipients of welfare in Aichi Prefecture filed a lawsuit, demanding cancellation of the decision of reduction. They argued that the governmental decision was against Article 25 of the Constitution, which guarantees “the right to maintain the minimum standards of wholesome and cultured living.”

 

Chief Judge Yasuhiro Hasegawa examined the executive decision of Minister of Health, Labour and Welfare for reduction of welfare based on deflation, which had been, as the ministry explained, to narrow the gap between the standard for welfare and actual situation of consumers’ behavior. He concluded that the calculations for the reduction lacked rational consistency with objective statistics and coherence with experts’ views.

 

The reduction at the period was exercised in unprecedented level. The court recognized that the plaintiffs could not afford to live comfortably and ordered compensation in addition to cancelling the decision of reduction. The court also blamed the negligence of Minister of Health, Labour and Welfare and determined that the reduction had deviated from discretion of the minister.

 

There are 29 lawsuits on the reduction of welfare and 22 decisions have been made in regional courts. The plaintiffs won 12 and defendants did 10, but the plaintiffs won 9 lawsuits out of recent 10. There is a tendency that the courts stand on the side of low-income family.

 

Behind the decision of reducing welfare, there was a policy of Abe administration, which upheld welfare cut for reducing governmental spendings. Prioritizing economic growth in the policy called Abenomics, the administration poured policy resources into backing up major corporations, leaving poverty behind. As seen in the policy of Fumio Kishida administration, such as redistribution of wealth to the people, the decision of Nagoya High Court indicates that it is the time for revisioning the growth-oriented policy.