House-for-pension swap debated

English>>China Society

Editor's Pick

By Joyce Zhang (Shanghai Daily) 09:32, October 12, 2013

Email|Print|Comments

twitter

facebook

Sina Microblog

Yi fang yang lao (以房养老), or swaping a house for monthly payments in old age, is a new and controversial option for Chinese elderly at a time when the social safety net is still not very mature.

The so-called house-for-pension swap is one of the senior-care ideas officially suggested by the State Council, China’s cabinet, in September.

It’s not for everyone — there’s a powerful tradition of parents leaving their home to their children — but it could help some seniors, such as those without children.

It was tried in Shanghai in 2007 but there were only a handful of “successful” cases. Some experts suggest it’s worth exploring again, but because of soaring housing prices, many people are reluctant to turn their homes over to a bank.

The idea is to sign over ownership of a house to a bank or insurance company in return for monthly payments for the rest of a person’s life, and the right to continue living in the house until death.

In fact, using property for one’s old-age care was introduced in China as early as 2003. It was tried on an experimental basis with individual organizations in Shanghai in 2007, Beijing in 2011 and Nanjing in Jiangsu Province in 2012, But the idea failed to take off and programs did not expand.

Conflicts with traditional Chinese values is a major obstacle, according to Tang Jun, secretary-general of the Center for Study of Social Policy of the Chinese Academy of Social Sciences. Most parents leave their house, their major asset, to their children and most children expect it.

Lack of appropriate and desirable caring services — what seniors get in exchange for their house — is a major challenge, according to Fu Min, member of a national expert committee on developing senior care. “Without a clear perspective on what’s available, no senior will risk their money.”

There were only six successful cases of “using residential property for old-age care” in Shanghai since the experiment was started in 2007, according to Yuan Junliang of the Aging Department of the Shanghai Civil Affairs Bureau.

Most residents believe that housing prices will continue to rise and the elderly will suffer losses if they give up their house, he says.

The house-for-pension idea could work as a non-mainstream option and won’t replace the responsibility of the government to establish a system of old-age care and a social safety net, says Dang Junwu of China Research Center on Aging.

（Editor：HuangJin、Gao Yinan）