Since her only child died in 2007, Zheng Puli has been worrying about her twilight years.

Living costs are rising and the 63-year-old Shanghai retiree and her husband survive on limited pensions.

"We have many younger relatives, but there is no one we feel sufficiently confident in to rely on in our old age," Zheng said.

A nursing home appears to be the only choice for the couple, but the question is how to afford a decent one, she said.

Zheng and her husband live in a 60-square-meter apartment on monthly pensions of about 6,000 yuan ($966). Zheng's only daughter, a sophomore at Renmin University of China, died in an accident when she was a volunteer teacher at a primary school in Shanxi province.

"We can barely make ends meet with our pensions now, when we are healthy. We dare not think about life when we become too old or sick to take care of ourselves," she said.

A house-for-pension pilot program is expected to help seniors like Zheng deal with old age.

The two-year reverse mortgage trial in four cities - Beijing, Shanghai, Guangzhou and Wuhan - enables seniors to convert a home's equity into cash.

The trial is expected to be carried out nationwide if successful, according to the China Insurance Regulatory Commission, which regulates the nation's insurance products and the industry.

People aged 60 and above who independently own property can apply for the insurance.

The regulations state that insurance companies can take part in the pilot program if they meet requirements that include having been established for more than five years with minimum registered assets of 2 billion yuan. They must also have sufficient staff members with expertise in reverse mortgages.

Seniors can mortgage their properties to eligible insurance companies to receive monthly payments over a specified term or before their death. The insurance company to which a property is mortgaged can put it up for sale once it has been fully paid for or when the owner dies.

But critics say the authorities are trying to relieve the State of its responsibility to provide social welfare for the elderly.

Yuan Xucheng, director of the commission's Life Insurance Supervision Department, dismissed the criticism. He said at a media conference that the program aims to encourage seniors to make better use of their housing and is not a substitute for the existing social security system.

hedan@chinadaily.com.cn

(China Daily 07/02/2014 page4)