This time, this is not for people who work flat out and say, “I love my company and will devote my whole life to it!” If that is you, you probably should not read this.

One day, your company may go bankrupt, or you may find yourself leaving it. This is the sort of thing you should know about for such a time.

A System to Prepare for When You Leave Your Job: Unemployment Insurance

Many of you probably know about unemployment insurance. You do not think about it much, but its premiums are deducted from your salary.

It is a system under which, when you become unemployed, you receive a set amount based on your previous annual income to help stabilize your life. It is also used to support re-employment.

Some people never use it in their lives, while others make good use of it. It is mutual aid.

I have never made use of unemployment insurance. In fact, until two years ago, tax accountants and similar professionals were in a situation where they had to pay unemployment insurance premiums but could never receive unemployment insurance benefits. Even if a colleague became unemployed and went to apply, they were told, “There has not been a single precedent. It is absolutely impossible, so please give up.” What an injustice (laugh). As you might expect, the backlash from industry associations for licensed professionals was substantial, and it has now been changed.

Putting that aside, unemployment-related benefits include many different allowances and payments, but this time I will discuss the core one, the “basic allowance.”

What Is the Basic Allowance (Commonly Called Unemployment Benefits)?

The basic allowance is intended to secure the livelihood of people who become unemployed through resignation, mandatory retirement, bankruptcy, or similar circumstances, and to help them find new employment as soon as possible. Because the basic allowance is paid to people looking for work, you must register as a job seeker at the same time as you complete the benefit procedure.

In principle, the period during which you can receive the basic allowance is one year from the day after leaving your job.

Eligibility Requirements for the Basic Allowance

  • An Employment Insurance insured person must have left employment and be unemployed.

Being unemployed means being unable to find a job despite having both an active desire and the ability to work.

  • During the two years up to the date of separation, there must be a cumulative total of at least 12 months of insured periods (each one-month period counted backward from the separation date for which the number of base days in the wage-payment period is at least 11 days counts as one month).

In addition, if you qualify as a specified benefit recipient or a specified reason leaver, you must have a cumulative total of at least six months as an Employment Insurance insured person during the one year up to the separation date.

Specified benefit recipients and specified reason leavers are people forced to leave employment for reasons such as bankruptcy, dismissal, unpaid wages, or harassment.

If you meet the eligibility requirements, go to the Hello Work office with jurisdiction over your residence and register as a job seeker.

Documents required at that time

  • Employment Insurance Certificate of Separation 1 and 2
  • Photo identification, such as a driver’s license or Basic Resident Registration Card
  • Two photographs (front-facing upper-body photographs, 3 cm high by 2.5 cm wide, taken within the past three months)
  • Personal seal
  • An ordinary deposit passbook in your own name (a Japan Post Bank passbook is also accepted)

Once you apply and your eligibility is determined, you attend the Employment Insurance Recipient Orientation on the designated date and time and receive an explanation to understand the system.

What you need at the orientation

  • Employment Insurance Recipient Guide (issued by Hello Work after eligibility is determined)
  • Personal seal
  • Writing materials

and so on.

At this orientation, you receive an “Employment Insurance Recipient Eligibility Certificate” and an “Unemployment Certification Declaration,” and your first unemployment certification date is designated.

This certification date occurs in principle once every four weeks. On the date designated by Hello Work, you go to the Hello Work office with jurisdiction over you to confirm that you are unemployed.

Actual benefits differ according to years of service, age, and reason for leaving, but in general, voluntary resignation involves a seven-day waiting period plus a three-month benefit-restriction period from application, after which the applicable number of benefit days begins and ends. Actual payments are made during that period.

As a rough guide, the benefit amount is said to be about 50–80% of your salary for the six months before leaving employment.

In principle, Employment Insurance premiums of 0.5% are deducted from your monthly salary.

For that reason, unemployed people or people who have not paid Employment Insurance premiums cannot receive the basic allowance even if they apply for it.

So, what did you think?

This is a right available to people who have faithfully paid Employment Insurance premiums, so why not make use of a system like this in order to put the premiums you paid to effective use?

However, if I may offer some unsolicited advice, when you live on unemployment insurance, your next employer is likely to ask what you did during that time. If you simply whiled the time away, there is a risk that it will hurt your job prospects. Some small and medium-sized business owners say that they reject applicants at the document-screening stage if they wait until they have received unemployment insurance for the full period before applying.

While you are on unemployment insurance, spend your time so that you can confidently say, “This is what I did!”