China extending pension program to rural elderly

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For this year's Mid-Autumn Festival, Wang Yutian had more cash to spend on the festival dinner as a new pension program has boosted his income.

The 70-year-old farmer and his wife, living at a village of north China's Hebei Province, have received a monthly pension of 55 yuan (8.6 U.S. dollars) since December 2009, a considerable contribution to this family's cashbox.

"Before the pension program started, our total family income was about 1,000 yuan from land lease every year plus a monthly government allowance for low-income families, which was 59 yuan for each of us," Wang said.

The annual income of Wang and his wife has gone from 2,416 to 3,736 yuan due to the pension, an increase of 54.6 percent.

"In the past, the 59-yuan allowance was just enough to cover our basic living and we could not save any money. Now the pension money makes us feel more secure. We save it in an account and we can use it in case we get ill. It's a big sum for us," Wang said.

The family bought sugar-free mooncakes and a roast chicken for the festival dinner. "This is the first time we have used the pension money because the festival is very important for us Chinese and we are very happy," he said.

Wang and his wife have no children. For years, in the countryside a childless couple means lack of support in their later years but today, even having children, old couples can not ask too much from them.

"In the past, it was a common practice for rural elderly to depend on sons. The family played the most important part in supporting the elderly in an agricultural society," said Wang Pingsheng, official in Huailu Township government of Hebei long in charge of elderly affairs.

However, things have changed. A family has fewer children and more and more young people leave the villages for cities as migrant workers. They can not look after aging parents, left behind at hometown, and some of them are even unable to provide financial support.

The pension program, still a pilot one, aims to help solve the problem through providing sustainable financial support for the rural elderly.

The pilot program has covered 10 percent of counties in China since September 2009 and the government expects to expand it nationwide by 2020.

In Hebei, a person aged over 60 will receive a monthly pension but does not need to deposit any money in the government program.

And a person aged between 18 and 59 should deposit 100 to 500 yuan every year in the program while the government puts in another 30 yuan for each pensioner.

What the government puts in differs across the country according to the financial situation of different provinces and the monthly pension for people aged over 60 varies with the local income level.

In a country with about 700 million rural residents and more than 13 percent of its total population aged over 60, the new pension program is also considered an effort to close the gap between the cities and the countryside.

In the past, China's pension program mainly focused on urban residents and the rural area was neglected, said Hu Xiaoyi, Vice Minister of Human Resources and Social Security.

After the reform and opening up since 1978, the gap of pension service between cities and the countryside has even widened as urban residents' incomes have grown faster than their rural counterparts, Hu said.

China had no rural pension program before the 1980s and only impoverished farmers got government allowances. In 1986, the seventh five-year development plan (1986-1990) first mentioned that the country would set up a rural pension program.

The country used to promote a rural pension program, in which only pensioners deposit and the government not. The program was not very popular among villagers.

Now about 200 million rural residents have joined the new program and more than 50 million rural senior citizens have received monthly pensions, said Prof. Lin Yi, expert on pension reform with the Southwestern University of Finance and Economics.

At an August meeting of the State Council, China's Cabinet, presided over by Premier Wen Jiabao, the government announced that all urban and rural senior citizens will be covered by pension programs by 2015.