To What Degree Can the Effects of Reverse Mortgages Be Anticipated?

Social insurance reforms that have been instituted in rapid succession in recent years have established a common orientation of reduced benefits instead of rising insurance premiums. For example, in medical system reforms carried out over the past two years, insurance benefit expenses were practically reduced by, for example, an increase in insured copayments and a higher eligibility age for Elderly Health Insurance benefits. In addition, with the pension reform bill passed this year, the substitution rate, which is currently set at 59.4%, will be lowered to 50.2%and there is the possibility of further reductions depending on the future course of macroeconomic adjustments. Furthermore, in the reform of long-term nursing insurance currently being discussed, a reduction in benefits is being examined for recipients with a low level of required assistance or required nursing care. In the background is a sense of crisis that, though there have been continuous increases in insurance premiums thus far, the level that can be endured by the current working generation is gradually reaching the limit. Furthermore, in addition to reforms in individual fields, the assertion that comprehensive social security reforms should be carried out with set limits on overall social insurance expenses is rapidly gaining support. Meanwhile, in addition to public social security, it will be necessary for the elderly in the future to secure their own self-security by paying the costs on their own. The reverse mortgage system has therefore again become a focus of attention in recent years as the source of underlying assets for self-security. The government also states that “it will promote the development of an environment for providing means (reverse mortgages, etc.) for covering post-retirement livelihood funding utilizing assets in the possession of the elderly” in the “Basic Policy for Future Economic and Fiscal Management and Economic and Social Structural Reform (cabinet decision, June 26, 2001), while lively discussions are being conducted by the Cabinet Office as well as symposia and study groups.