SCIO briefing on China's child care subsidy system and childbirth support measures

China Financial and Economic News:

Child care subsidies are a major public welfare policy that requires stable fiscal investment. What measures will the Ministry of Finance take to ensure the subsidy system is properly implemented? Thank you.

Guo Yang:

Thanks for your question. I will answer it. Child care subsidies will benefit many families. Ensuring these funds reach people accurately, promptly and in full, and truly implementing this beneficial policy well, is a matter of great concern to everyone. The Ministry of Finance, in accordance with its responsibilities, is rolling out a series of measures to support the effective implementation of the child care subsidy system, focusing on three key areas:

First, we are establishing a transfer payment program. According to the child care subsidy system implementation plan issued by the General Office of the CPC Central Committee and the General Office of the State Council, the central government will establish a shared fiscal responsibility transfer payment program titled "Child Care Subsidy Fund" with an initial budget of approximately 90 billion yuan this year. To fund national basic subsidies, the central government will provide proportional subsidies to local governments. In general, the central government will bear about 90% of the total cost. This demonstrates both the central government's firm commitment to this initiative and its substantial support for local governments while reinforcing local administrative responsibilities.

Second, we are strengthening fund management and supervision. The implementation plan requires that the child care subsidy system operate safely and compliantly while remaining simple and accessible, with strict eligibility reviews, standardized distribution, improved efficiency, secure funding, and active public oversight. Soon, the Ministry of Finance will work with the NHC to release management guidelines for child care subsidy funds. These measures will clarify specific requirements for fund allocation, use, management, and supervision. We will also refine and standardize the fund allocation process and clearly define responsibilities at all levels. The two departments will implement comprehensive budget and performance oversight for the subsidy funds, including performance monitoring and evaluation mechanisms, to ensure effective management and use of fiscal resources.

Third, we are clarifying relevant preferential policies. The implementation plan stipulates that child care subsidies issued in accordance with system regulations will be exempt from individual income tax. Additionally, these subsidies will not count as household or individual income when determining eligibility for social assistance programs like subsistence allowances and programs for people living in extreme hardship. The government previously introduced a special additional individual income tax deduction for child care expenses for children under 3, allowing deductions of 2,000 yuan per child per month. Together with the child care subsidy system, these policies will collectively reduce the financial burden of childbearing and child-rearing for families.

At present, finance departments at all levels are working hard with health authorities on funding calculations and allocations. The child care subsidy system is a major decision and arrangement by the CPC Central Committee and the State Council in response to public expectations. We will collaborate with health departments to oversee the entire process from application to distribution to ensure that every subsidy reaches its intended recipients. Thank you.