以房养老 (yi fang yang lao): House-for-pension program

House-for-pension program 以房养老 (yi fang yang lao)

The State Council, China's Cabinet, recently issued a document promising a comprehensive social care scheme for the country's rapidly aging population, keeping in mind that the number of people above 60 years of age is set to reach 243 million by 2020. The government has announced several measures as part of the scheme, among which a pilot house-for-pension program has evoked widespread concern and sparked a heated public debate.

Under the house-for-pension program, senior citizens who own a house can mortgage it to an insurance company or a bank to get a certain amount of money every month until death.

According to traditional Chinese culture, grown-up children are expected to take care of their elderly parents. For centuries it has been taken for granted that children will inherit their parents' property, especially their homes. No wonder, some people allege that the house-for-pension program may be aimed at serving senior citizens , but it totally ignores the interests of their children.

In fact, many elderly people also doubt the feasibility of the program, because even if they are ensured of a certain amount of monthly income, there is nothing to guarantee that they will receive regular and proper services, in particular because of the inadequate infrastructure for senior citizens in China.

Financial institutions, too, have expressed doubt over the feasibility of the program, because they fear that a drastic drop in real estate prices and the 70-year limit on private property ownership in China would undermine their interest.

Responding to criticisms against the program, civil affairs authorities said on Sept 20 that the proposed house-for-pension program is only a pilot for insurance fund investment projects for eldercare.

Expanding the house-for-pension program to more cities is not mandatory. Nor is the program the only way senior citizens will be guaranteed proper and regular quality services. It is only a complementary solution, backed up by among others the basic pension scheme, home-based eldercare, nursing homes, community-based nursing services and strengthening of eldercare infrastructure.

(China Daily 09/27/2013 page9)