What's New in Pensions, Old-Age Insurance, and Elderly Care Services? Key Takeaways from the Two Sessions on Aging [Continuously Updated]

The Second Session of the 13th National People's Congress opened at the Great Hall of the People on March 5. VCBeat (WeChat: vcbeat) has compiled an overview of the trending topic “elderly care.”

During the delivery of the Government Work Report on the 5th, Premier Li Keqiang mentioned “elderly care” 15 times and “the elderly” twice, primarily covering the following content:

1. Strengthen social security coverage for basic old-age pensions, basic medical insurance, and other benefits

In reviewing the work of the previous year, the report mentioned “strengthening support for basic old-age insurance, basic medical insurance, and other social security programs,” as well as “establishing a central adjustment system for the basic old-age insurance fund for enterprise employees, raising the basic pension for retirees, and increasing the minimum standard for the basic pension for urban and rural residents from RMB 70 to RMB 88 per month.”

2. Focus on Public Expectations Regarding “Elderly Care”

The report also emphasized that “there are still many areas where the public remains dissatisfied, including education, healthcare, elderly care, housing, and the safety of food, drugs, and medical products, as well as income distribution.”

3. Accelerate the Reform of Provincial-Level Pooling for Pension Insurance

In laying out this year’s work priorities, the report explicitly proposed reducing the employer contribution rate for basic old-age insurance for urban employees, allowing localities to lower it to 16%.

Furthermore, accelerate the reform of provincial-level pooling for old-age insurance, continue to increase the central adjustment ratio of the basic old-age insurance fund for enterprise employees, and transfer part of state-owned capital to replenish the social security fund.

Premier Li Keqiang emphasized the need to reduce enterprises’ contribution burdens while ensuring that employees’ social security benefits remain unchanged, pensions increase at a reasonable rate, and are paid in full and on time, thereby sustaining the social security fund and enabling both enterprises and employees to benefit.

4. Vigorously develop the elderly care industry, particularly community-based elderly care services

In implementing initiatives to “promote stable growth in consumption,” the report proposes vigorously developing elderly care services, particularly community-based elderly care. Institutions providing daytime care, rehabilitation and nursing, meal assistance, and mobility support within communities shall receive policy support such as tax and fee reductions, financial subsidies, and preferential pricing for water, electricity, gas, and heating. Newly built residential areas must be equipped with supporting community elderly care facilities. Policies integrating medical and elderly care services should be reformed and improved, and pilot programs for long-term care insurance should be expanded, thereby ensuring a happy later life for the elderly and a promising future for generations to come.

5. Increase the basic pension for retirees

In the area of “improving the social security system and policies,” the report points to advancing the construction of a multi-tiered old-age security system. It calls for continued increases in the basic pension for retirees, implementation of benefit guarantees for retired military personnel, and improvement of policies ensuring the continuity of basic old-age insurance and basic medical insurance for discharged soldiers.

6. Accelerate the implementation and improvement of cross-provincial direct settlement for medical expenses incurred outside one's home province

The report highlights the urgent need to implement and refine policies for direct settlement of cross-provincial medical expenses incurred outside one’s home province, so that patients seeking care away from home can use their health insurance cards for immediate payment at all designated hospitals, thereby genuinely facilitating healthcare access for the mobile population and elderly individuals relocating with their families.

7. Safeguard the lawful rights and interests of women, children, the elderly, and persons with disabilities

Regarding “strengthening and innovating social governance,” the report emphasizes safeguarding the legitimate rights and interests of women, children, the elderly, and persons with disabilities.

At a press conference held on March 6 by the News Center of the Second Session of the 13th National People’s Congress, Lian Weiliang, Deputy Director of the National Development and Reform Commission (NDRC), stated that the CPC Central Committee and the State Council attach great importance to the severe shortage of urban elderly care beds. A series of comprehensive measures, including “expanding capacity, improving quality, and optimizing structure,” will be implemented to accelerate the resolution of problems in the elderly care sector, such as insufficient overall supply, suboptimal quality, and unbalanced development.

1. Enhance Elderly Care Service Capacity

The government will increase central budgetary investment, further relax market access for social capital, and adopt multiple measures to boost the supply of elderly care services. Over the next three to five years, there will be a substantial increase in various types of elderly care beds, with more than one million inclusive elderly care beds added through mechanisms such as city-enterprise collaboration.

2. Focus on Improving the Quality of Elderly Care Services

All relevant departments are required to prioritize the improvement of elderly care service quality as the focal point of industry supervision, enhancing quality by standardizing service norms, strengthening talent development and training, refining supportive policies, and reinforcing credit-based regulation.

3. Continuously optimize the supply structure of elderly care services

On the basis of ensuring basic coverage and safeguarding the bottom line, the government should vigorously support the diversified development of non-basic elderly care services to strive to meet multi-level and diverse needs.

In terms of service recipients and content, the proportion of nursing-oriented elderly care beds should exceed 50%, with a substantial enhancement in the depth and quality of integrated medical and elderly care services.

In terms of capacity building, greater support should be directed toward impoverished areas and remote rural regions to eliminate gaps in service coverage.

We should further leverage the role of communities and guide high-quality elderly care service providers to establish operations within community settings. Vigorously develop diverse community-based services, such as daytime care, rehabilitation nursing, and assistance with mobility and meals, enabling residents to access more convenient and high-quality elderly care services close to home.

On March 7, at the press conference held during the Two Sessions, Minister of Finance Liu Kun provided an explanation on the central adjustment system for basic pension funds.

Liu Kun stated that, currently, the national social insurance fund as a whole generates revenues exceeding expenditures, ensuring the timely and full payment of pensions. The central adjustment system is precisely designed to address the significant fiscal pressures faced by certain provinces, which stem from factors such as accelerating population aging and uneven population mobility.

1. Increase the dispensing ratio

Liu Kun stated that efforts to adjust and allocate funds should be further intensified, with the adjustment ratio raised to 3.5%. The total scale of the central adjustment fund for the year is expected to reach approximately RMB 600 billion, thereby further alleviating the pressure on fund revenues and expenditures in certain provinces.

2. Increase Subsidy Support

Furthermore, the basic pension levels for retirees should be appropriately raised. A budget of RMB 739.2 billion is proposed for central fiscal transfer payments for basic pensions, representing a year-on-year increase of 10.9%, with priority given to central and western regions and provinces with old industrial bases where imbalances between fund revenues and expenditures are particularly pronounced.

3. Bridging the Revenue-Expenditure Gap

For provinces that still have a cumulative deficit in their funds after central adjustments and central fiscal subsidies, the shortfall in fund revenue and expenditure will be covered in accordance with the principle of shared responsibility between the central and local governments.

4. Accelerate the standardization of provincial-level pooling for old-age insurance

Liu Kun stated that efforts will be made to continuously consolidate the achievements of provincial-level pooling of basic pension insurance and further standardize related policies. On this basis, China will accelerate the realization of national-level pooling of basic pension insurance.

According to the Minister of Finance, all provinces across China will achieve a balance between revenue and expenditure this year. The central adjustment system has rapidly addressed the most pressing issues at hand. Moreover, in late last year, the state made certain attempts to broaden funding sources, such as transferring 10% of state-owned enterprise equity to the social security fund. Nevertheless, this has not altered the pattern of relying on a single source for the accumulation of social security funds. Compared with the first and second pillars, the greatest potential lies in the development of the third pillar.

March 9,At a press conference held by the News Center of the Second Session of the 13th National People's Congress, Minister of Commerce Zhong Shan stated that China will next focus on developing service consumption and optimizing service supply.He pointed out that service consumption is a new growth driver, but there are still many shortcomings. The next step should focus on addressing these weaknesses.

In Zhong Shan’s view, currently,Elderly care services represent a significant shortfall. China’s population is aging at an accelerating pace; according to relevant statistics, the country adds more than 8 million elderly individuals annually. Providing elderly care services for this growing demographic poses substantial challenges. For instance, there is an annual shortage of over 2 million long-term care beds for the elderly nationwide.

On the morning of March 15, following the closing of the Second Session of the 13th National People's Congress, Premier Li Keqiang of the State Council met with Chinese and foreign journalists covering the session in the Golden Hall on the third floor of the Great Hall of the People and answered their questions.

# On Tax Cuts and Fee Reductions

Li Keqiang pointed out,This year, the government has introduced larger-scale tax and fee reductions.Regarding the employer contribution rate for basic old-age insurance, from the originally stipulated 20%Decreased to 16%。

On Livelihood Issues

Li Keqiang stated that efforts to address people’s livelihood issues should focus on key priorities, as indicated by big data analytics,Currently, China's elderly population includes nearly 250 million people aged 60 and above, and 170 million people aged 65 and above.Elderly Care IssuesGreater attention should be given.Elderly care services concern the vast majority of families, yet China faces an insufficient supply in this sector.Currently, elderly care institutions can only provide three beds per 100 people. Statistics from some major cities suggest that individuals may have to wait until after the age of 90 to secure a bed in an elderly care facility.

Li Keqiang stated that although China continues to intensify efforts to develop elderly care institutions, the supply still fails to keep pace with the rapid growth in demand. To address this issue, it is necessary to draw on existing experience,Focus on Developing Community-Based Elderly Care Services, thereby ensuring local accessibility and universal, equitable coverage.

Li Keqiang stated that it is still necessary to innovate mechanisms, align with public needs, leverage the role of social forces, and increase government support. For example, providingPublic Rental Housing, enabling social forces engaged in meal assistance and mobility support, day care, rehabilitation, senior universities, and other servicesFree to Use, also possibleExemptions for water, electricity, and gas feesCommunity workers and relevant government departments must ensure fair market access, focus their primary efforts on impartial regulation, guarantee that these services are safe and reliable, and resolutely remove violators from the market. This will provide peace of mind for the elderly and their families, enabling seniors to enjoy a secure and comfortable later life.