Japan plans to spend around 2 trillion yen ($18 billion) to support households with children under 18 years of age. The plan is part of a wider economic stimulus package aimed at easing the burden of families affected by the COVID-19 pandemic.

Under the stimulus plan, each household would be entitled to 100,000 yen ($880) per child regardless of household income. The Yomiuri newspaper reported that the government would distribute the funds to families sometime during the spring of next year.

The Japanese government will reportedly use its reserves in state coffers to fund the cash distributions, implying that the proposal will not result in added government debt.

The government of new Prime Minister Fumio Kishida is reportedly also proposing cash handouts to low-income households and temporary employees. The ruling party is reportedly still ironing out the details of the proposal.

Kishida previously vowed to establish a large-scale stimulus plan. The new prime minister said that such as plan should be ratified by parliament by the end of the year.

Economy Minister Daishiro Yamagiwa said Friday that the new administration is fully committed to providing financial support to those who had suffered from the effects of the COVID-19 pandemic. He said discussions are currently now ongoing for new measures in line with the administration's goals.

Senior economist at Dai-ichi Life Research Institute, Masato Koike, said, unlike previous stimulus packages, the new package will be providing support to individuals who are in need of immediate cash. Masato said that apart from supporting these struggling families, the injection of cash would also result in increased consumer spending.

Household spending in Japan dipped in September as consumers remained wary of the COVID-19 outbreak, confirming widespread speculation that the world's third-largest economy declined in the third quarter but would revive by the end of the year.

According to official statistics released on Friday, consumer spending declined 1.9% year over year in September, improving slightly from the 3% drop in August.

Before he became Japan's new prime minister, Kishida's Liberal Democratic Party had promised to implement measures that would provide struggling households, particularly those with minors, financial support. Komeito, a coalition partner of Kishida's party, had made the pledge during their campaign ahead of the general elections last month.