Photo/IllutrationLabor minister Takumi Nemoto apologizes at a news conference on the ministry’s flawed survey on Jan. 11. (Rei Kishitsu)

About 20 million beneficiaries have been shortchanged 56.75 billion yen ($525 million) in insurance benefits, including unemployment and worker's compensation, due to a faulty government survey, the labor ministry said in its review report Jan. 11.

The Ministry of Health, Labor and Welfare said the government will pay out the shortfall to the affected recipients.

At a news conference on Jan. 11, labor minister Takumi Nemoto apologized for the long-standing error, which has just been made public.

“We find it extremely regrettable and apologize,” he said.

But he asserted that he does not believe that the “entire ministry intended to cover it up.”

He added that the ministry “is still investigating” those involved and who were aware of the erroneous surveys.

The announcement followed the ministry’s re-examination of its Monthly Labor Survey reports since 2004.

After becoming aware of the flawed reports, the ministry began adjusting data it compiled for January 2018 and later to bring figures closer to where they should have been if the survey was conducted properly.

But the ministry has been doing so without publicly acknowledging the error and the ongoing adjustments.

The ministry’s review report stated that “some ministry employees had knowledge of the steps being taken (to modify the figures), but it was not shared by the entire ministry.”

The survey, defined as fundamental statistics under the Statistics Law, is used to calculate many economic indicators such as gross domestic product and the diffusion index.

The results of the survey are released after the ministry compiles worker salaries and work hours around Japan on a monthly basis through prefectural governments.

Although it was a rule to cover all companies with a work force of at least 500 employees, the ministry has surveyed only 500 of about 1,400 such businesses in Tokyo since 2004.

The lack of data on about two-thirds of the companies in the capital where employees are typically paid more than at smaller companies led to figures lower than they should have been.

The figures published as the fixed monthly wages between 2012 and 2017 are believed to be an average 0.6 percent lower than the actual numbers.

The upper and lower limits of the daily unemployment benefits and benefits for work-related injuries or diseases that were recognized by labor authorities are calculated on the basis of the average salaries in the monthly survey.

As a result, about 19 million beneficiaries were shortchanged on their employment insurance, totaling about 28 billion yen. About 270,000 recipients were affected under workman's compensation, worth about 24 billion yen. Beneficiaries were also shortchanged about 4.6 billion yen in other programs.

The flawed surveys came to light after the Ministry of Internal Affairs and Communications pointed out last month the discontinuity in numbers for companies with 500 employees or more between 2017 and 2018.

Labor ministry officials explained the survey methodology for workers in Tokyo at a meeting with Kiyohiko Nishimura, chair of the internal affairs ministry’s Statistics Commission, on Dec. 13. Nishimura said the manner in which the labor ministry handled the Tokyo portion is a “major problem,” according to the review report.

The labor ministry began tweaking Monthly Labor Survey figures for Tokyo workers for January 2018 to coincide with a change in the computation method for the survey.

In the face of the flawed survey, the government on Jan. 11 ordered ministries and agencies to re-examine the veracity of 56 key government surveys, including census and labor force and household surveys.

Chief Cabinet Secretary Yoshihide Suga said the government will add the amount that insurance beneficiaries have been shortchanged retroactively in the fiscal 2019 budget request.