New guidelines safeguard seniors' prepaid care fees

In a significant move to protect the assets of elderly people, China has introduced stringent new rules governing how nursing homes manage advance fees paid by residents, according to the Ministry of Civil Affairs.

The guidelines, jointly issued by the ministry and the National Financial Regulatory Administration, are part of a broader crackdown on illegal fundraising activities and financial frauds targeting seniors.

Titled "Guidance on the Custody and Management of Prepaid Fees for Nursing Institutions", the document mandates that all funds be deposited in a dedicated, monitored bank account to address long-standing concerns over the misuse of deposits and membership fees.

Under the new rules, care facilities must open a dedicated account at a bank on the approved list, where all advance payments must be channeled.

In the event a nursing home wishes to close the account, it must first submit a fund disposal plan to the civil affairs department and immediately cease collecting new advance payments.

Nursing homes must apply to the custodian bank for any withdrawal, stating the purpose and providing supporting documents. While exceptions are made for emergency medical costs, documentation must be submitted within seven working days.

Furthermore, the bank must refuse any suspicious transactions and immediately alert regulatory authorities.

The guidelines also ensure prompt refunds, requiring banks to process repayments within one day of receiving a valid request from the nursing home.

To enhance transparency, custodian banks must develop specialized account management systems that interface with civil affairs departments, providing real-time data of fund flows.

Online banking for these accounts is prohibited, and all transactions must be processed over the counter or through a dedicated platform, with balance checks to prevent accounts from falling below a required safety margin.