◇Cause of Death
First of all, it is important to make sure the employee’s death is truly not work-related even if the employer and the survivors are both convinced it is not.
If an employee worked approximately 100 hours of overtime in a month or 80 hours of overtime per month for 6 months prior to his/her death, such death may be considered work-related.
◇Workers’ Accident Compensation Insurance: Survivors’ Benefit
If an employee dies while at work or commuting to/from work, a surviving family member will receive a pension or a lump-sum payment from the government.
◇Workers’ Accident Compensation Insurance: Funeral Expenses
If an employee dies while at work or commuting to/from work, the benefit for funeral expenses will be paid by the government to the individual who holds the funeral.
◇National Pension Insurance / Employees’ Pension Insurance: Survivors’ Pension
If an insured person dies, the survivors’ pension will be paid from National Pension Insurance or Employees’ Pension Insurance to an individual who has shared living expenses with, and has been financially supported by, the deceased person.
◇Employees’ Health Insurance: Funeral Expenses
If an insured employee dies, the benefit for funeral expenses of 50,000yen is paid from the Employees’ Health Insurance to an individual who holds the funeral.
– There are eligibility requirements for survivors’ benefit and survivors’ pension.
– When survivors’ benefit and survivors’ pension are both paid, survivors’ benefit will be reduced by multiplying it by the adjustment coefficient because the amount would be very large if both are paid in full.
◇Severance Pay on Death
If a company has Retirement Allowance Regulations, it is obliged to pay “Severance pay on death” to a surviving family member accordingly. Generally, the amount is determined based on the employee’s years of service and last position, any unpaid balance of salary, and sometimes a reward for his/her service will also be included. Even if the company has no Retirement Allowance Regulations, it is an employer’s obligation to pay the employee’s unpaid salary, allowances, and entitlements.
Note that these payments may be subject to inheritance tax for the beneficiary.
◇Congratulations and condolence payments
Congratulations and condolence payments may be paid from a company if they are stipulated in the company’s employment regulations. When there is no rule, funeral expenses or condolence payments for the funeral may be paid by a company. Such payments are nontaxable as long as the amounts are considered socially acceptable and deemed appropriate by the tax authorities (taking into account the specific conditions, such as the cause of incident, the condition of the deceased’s kin, the deceased employee’s position in society, etc.)