Shanghai has announced plans to provide retirement home residents with injury liability insurance before year end to lessen the financial burdens of tenants who file compensation claims, local authorities said yesterday.

According to the scheme, both the government and retirement homes should pay liability insurance premiums. It would also enable senior citizens who get injured on retirement homes' premises to seek compensation from insurance agents, the municipal civil affairs bureau said.

Currently, such tenants usually wrangle with the homes' operators in hopes of receiving compensation from them.

"Bringing in insurance agents will greatly alleviate retirement homes' burdens and encourage their development, as most are nonprofit organizations," a municipal social welfare association spokesman surnamed Wang said.

"It will also protect seniors' interests by making the compensation process more efficient."

Wang explained the present system put retirement homes at high risk, because senior citizens are especially prone to injury.

"This has remained a major obstacle to the development of China's retirement homes, and especially of private facilities," Wang said.

"Shanghai is in particular need of such a reform, because its graying population is proportionally much larger than the national average."

Under the new scheme, retirement homes would be responsible for one-third of the premium - a range of 150 yuan to 180 yuan per resident - and the government would cover the rest.

Being freed from the burdens of paying out compensation would enable retirement homes to invest more in elderly care, Wang said.

Director of Quyang Neighborhood Retirement Home Zhu Hangmei said the plan would protect her facility from the risks posed by compensation claims.

"There is a growing awareness among the elderly that they have the right to seek compensation if injured," she told China Daily.

"While we bear responsibility if we are at fault, it is a great burden to us."

Zhu said she once paid up to 200,000 yuan in compensation.

Zhu explained that many retirement homes refuse to accept people who are in poor health to avoid compensative risks, but the new scheme will likely change that.

Municipal government figures show there are now more than 80,000 beds among the city's 580 retirement homes. More than 20 percent of the nearly 3 million permanent residents are older than 60.

So encouraging the development of more retirement homes is crucial to serving an aging population's needs, Wang said.

(China Daily April 14, 2009)