Extending social security coverage to the rural sector in China

John A. Turner
Tianhong Chen

Volume 67 (2014), Issue 1

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In late 2009 China launched an innovative, voluntary programme that by 2011 had extended pension coverage to 326.4 million people in the rural sector, including contributors and beneficiaries. It requires one contribution per year and provides a flat-rate benefit and a contributions-related benefit through a contributory individual account, with a government guarantee that the benefit will continue for life. The programme encourages participation of persons who do not pay income taxes, and thus have no tax incentive to participate, by providing substantial government subsidies. As a further incentive, old-age benefits are provided to older parents when all their adult children participate in the contributory programme.

Old-age pensions
Extension of coverage
old-age benefit
gaps in coverage
pension scheme
social security financing