Insurance Scheme in Rural China Benefits Older People
Help Age International
August 4, 2008
HelpAge International, in partnership with Renmin University in Beijing, has conducted research into the new Rural Social Pension Insurance Programme in Baoji City, Shaanxi Province, one of the first of its kind in China.
The majority of older people in China’s rural areas have limited access to pension insurance programmes. However, with a rapidly ageing population, China’s government is urgently exploring new ways to tackle poverty among older people. Baoji City introduced the Rural Social Pensions Insurance Programme in July 2007 to three categories of subscriber:
• those aged 60 and above at the beginning of the programme, who immediately receive a pension of 60 yuan (USD $8) each month provided their family members also pay the required insurance premiums
• those aged 45 and over, who must pay insurance premiums regularly and will then receive a monthly pension after they turn 60
• those aged below 45, who must pay insurance premiums for more than 15 years to qualify for a monthly pension after turning 60
Improving income security and family relationships
Focus group discussions with recipients of the pension showed that that it is providing older people with greater income security. Older people receiving the pension said that it helped them to:
• pay for necessities such as food, medicine, clothing and water and electricity
• increase their economic stability and decrease their dependency on others for financial support
• feel greater respect from other family members and relieve family tensions because of their contributions to household expenses
One recipient said, “I was pretty embarrassed to ask the children for money. Now I feel much better than before because I have regular income and can buy anything I want.”
Another added: “We are very excited to get regular income like urban residents - it was unimaginable before. It was good to have money in hand to deal with emergencies.”
Receiving the pension appeared to have a positive psychological impact on older people, helping them feel more secure and giving them satisfaction from having less economic dependency on their children. Among the eligible older population aged 60 and over, the participation rate was 94 per cent.
Although the programme is providing older people with significant benefits, challenges remain to improve the system so that it fully supports older people. Firstly, although the 60 yuan (USD $8) pension added to the income of the rural elderly population and improved living conditions to a certain extent, it was insufficient to meet all of their economic needs.
Also, as older people cannot receive the pension unless family members contribute, younger people essentially determine whether an older person benefits from the programme and, due to increasing migration among the younger population and their lack of concern about future income security, many are not subscribing.
Similarly, if poor subscribers cannot pay the insurance premiums in time, their older family members will not receive the pension. One way to address this challenge would be to create a special fund for the poor.
This initial research clearly shows that the scheme improves older people’s standard of living – allowing them greater independence which in turn leads to improved family relations.
The challenge now will be to address the issues of sustainability and the difficulties presented by the scheme being dependent on the contributions of younger family members.
HelpAge International is calling for a universal non-contributory pension for all people worldwide over the age of 60.
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