People cross a street at Tokyo's shipping district Ginza on April 26, 2021, during a new coronavirus state of emergency covering Tokyo, Osaka, Kyoto and Hyogo regions. (KAZUHIRO NOGI / AFP)
TOKYO – Japan's ruling coalition agreed on Wednesday to set an income ceiling and exclude high-income families from its plan of 100,000 yen ($886) in cash and vouchers for each child aged 18 or younger as part of the government's COVID-19 stimulus package.
The 100,000 yen ($886) handouts are expected to be distributed in two stages. Households below the income cap will begin to receive 50,000 yen in cash within the year, while another 50,000 yen worth of vouchers will start arriving by spring next year
Prime Minister Fumio Kishida, also the leader of the ruling Liberal Democratic Party (LDP), and Natsuo Yamaguchi, head of the LDP's smaller partner Komeito, agreed to set the annual income cap at 9.6 million yen for each household.
The 100,000 yen handouts are expected to be distributed in two stages. Households below the income cap will begin to receive 50,000 yen in cash within the year, while another 50,000 yen worth of vouchers will start arriving by spring next year, which can be used on childcare-related services.
The ruling coalition had been wrangling about the handouts for the past few days. Komeito had promoted their inclusion in the stimulus package as it had made them the focus of its campaign pledges in the general election last month.
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Meanwhile, the LDP was worried whether the plan would be regarded as a waste of taxpayer money, considering a similar scheme last year that delivered 100,000 yen in cash to everyone in Japan but help little in boosting consumer spending.
Another agreement was also reached during Kishida and Yamaguchi's meeting that 20,000 yen in credit will be delivered to everyone who holds or newly acquires a "My Number" card, aiming at supporting the pandemic-affected economy and boosting the use of the unpopular identification methods.
Senior LDP and Komeito officials have separately agreed on 100,000 yen cash handouts to low-income households that are exempt from paying residential tax.
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The government's goal is to develop a stimulus plan worth more than 30 trillion yen with measures mentioned above by next week, and to obtain funding through a supplementary budget within the year.