This comparative study examined the direction of welfare reforms across different levels of governments and investigated the welfare transition in Finland and Japan, based on the discussion by Sellers and Lidström (2007) and Häusermann (2011). Finland’s four cases revealed some variations in both the central–decentral direction and the retrenchment or protection type of welfare transition. With respect to the three Japanese cases, the reforms demonstrated a tendency in transferring municipality tasks to second-tier authorities and they indicate a retrenchment or protection type of welfare transition. The fundamental purpose and motivation of the reforms were to maintain the lives of people in the welfare state with an ever-changing environment and an ageing population during austerity. Therefore, the nature of the reform cases in the two countries can be categorised as a protection type rather than a retrenchment type, although these reforms implied a centralised nature, which is an evident retrenchment type of welfare transition rather than a decentralised one. These reforms displayed the potential for service innovation and welfare development through the use of innovative Information and Communications Technology (ICT) and Artificial Intelligence (AI) environments in a changing post-industrial society, especially in Finland.