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Fund urged to compensate one-child parents
By Qiu Quanlin (China Daily)
Updated: 2004-06-14 11:18

GUANGZHOU: The city is considering adjusting one-child compensation standards and creating a fund to ensure families get their money.

That fund, say some officials, should be set up by the government.

A 1980 law says one-child parents should be compensated after retirement. Many of those parents are now retired or approaching retirement age and compensation payments are on the rise.

Across the country, many cities are seeing one-child compensation payments rise.

Many retired one-child parents are already owed compensation but the funds to pay them are simply not in place, officials said during a conference last week.

A fund may be the only way for the city to keep up its obligations under one-child policy.

Such funds have been proposed in other cities who are facing similar cash crunches.

In Guangzhou, the problem is larger, however, and the culprit is the city's own economic success.

One child compensation payments are based on average per capita incomes which are generally higher in the business hub of South China than in other places around the country.

Municipal officials, however, say a proposal to change the formula to calculate the compensation may help solve the city's problems.

The current formula, revised in September 2002, gives 30 per cent of the average yearly salary of workers in the city, or 8,471 yuan (US$1,025).

That is about four times the national average.

During a conference last week, the Guangzhou Municipal Family Planning Committee and the Guangzhou Municipal Labour and Social Security Bureau called for the creation of the new fund.

Due to the lack of an effective mechanism to pool funds quickly, a great number of parents have not been paid, officials said.

In addition, some employers who have gone bankrupt are not paying into reserve funds that would ensure the compensation for their employees, said Zhang Jieming, director of the Labour and Social Security Bureau.

In 1980, the municipal family planning authorities stipulated that a sum of 5 per cent of their retirement funds should be given to one-child parents after retirement. The money was to be set aside by the employers of these one-child parents.

A number of companies have complained that the compensation standard is too high at a time when many of them are losing money.

The city's Family Planning Committee and Labour and Social Security Bureau say the government should step in and set up the special fund.

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