Terraced paddy fields play a crucial role in water and soil conservation because their water-storage capacity reduces flood peaks in mountainous areas. The water-storage capacity of a paddy field is mainly dependent on the size of the field, the height of the bund, and the outlet within the bund. However, the height of the bund and outlet can be reduced due to a lack of maintenance, especially when rice paddies have been abandoned. This study assessed the flood-control function of a terraced paddy field during heavy-rainfall events. The four-layered tank model calibrated by in situ rainfall-runoff measurements was applied to determine the effects of reducing the height of the bund and the outlet within the bund, on the drainage peak flow of terraced fields. The simulation results from two heavy-rainfall events indicated the excellent flood-control function of terraced paddy fields. The simulation results showed that the drainage peak flow underwent considerable changes when the height of the bund and outlet was reduced by more than 50%. Therefore, sustainable rice planting in the terraced paddies or maintenance of the water-storage capability in abandoned arable land is necessary to release downstream flood pressure.