Japanese pensioners with US stimulus cheques descend on Tokyo banks

Bank branches in Tokyo have been swamped by pensioners trying to cash stimulus cheques from Joe Biden after the US Internal Revenue Service sent thousands of payments to Japanese citizens in an apparent error.

An official at one of Japan’s biggest banks said the issue was causing “crowding and confusion” at some Tokyo area branches as staff tried to handle the unfamiliar foreign currency cheques.

The payments appeared to have been sent to Japanese retirees who had worked in the US, highlighting the enormous scale of Biden’s $1.9tn stimulus and the risk of waste in the rush to get money out of the door.

Payments to ineligible foreign recipients, including in many countries beyond Japan, were a problem during previous rounds of stimulus passed by Donald Trump.

However, the recent Japanese recipients did not get cheques in 2020, suggesting the problem of erroneous payments may be even bigger this time around.

“I felt grateful and I thought America was amazing,” said a 75-year-old pensioner from a Japanese trading house, who worked in the US in the 1970s. He received a $1,400 stimulus cheque this month.

The following week was spent exchanging texts and calls with friends who had also received cheques. Two of his friends were able to cash their cheques at Sumitomo Mitsui Financial Group, while another managed to do so at a central Tokyo branch of Mizuho.

But when he checked with his local Mizuho branch, he was told he needed to confirm his eligibility before he could receive cash, causing him to consider opening a bank account at SMFG.

Within days, he saw media reports that suggested he may not have been eligible for the cheques both he and his wife received. “It ended as a brief dream,” he said. “Now my biggest interest is what’s going to happen to those who already received the cash.”

Two of Japan’s three megabanks are continuing to cash the cheques for customers with an existing account who say they are eligible. The banks asked not to be named for fear of creating additional demand on their branches.

Koh Fujimoto, an accountant at CDH in Chicago who specialises in advising Japanese people with cross-border tax issues, said only American citizens — who are taxed on their worldwide income — and foreigners resident in the US were eligible for the cheques. “There is also an income qualification,” he added.

A number of Japanese people receive a small pension from the US after paying taxes during a work assignment, before a social security treaty was signed in 2005. Fujimoto said the IRS may have failed to distinguish them from US pensioners with incomes too low to file a tax return.

If large sums are lost, the US would probably take action, Fujimoto said, but he added that it would be difficult to make elderly foreign citizens pay up once they had cashed their cheques. Nonetheless, “people who are ineligible should return the money”, he said.

The IRS confirmed that “non-resident aliens” were not eligible and should send the cheques back to an address in Austin, Texas.

According to the Treasury department’s inspector general, Trump’s first stimulus payments of $1,200 in the spring of 2020 included 27,808 cheques worth $34m to foreign addresses, comprising both eligible and ineligible recipients.

The US Treasury did not offer a figure for this year’s payments and otherwise declined to comment.

Coronavirus business update

How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Sign up here