Photo: VCG

The nationwide childcare subsidy program is the first large-scale, inclusive, and direct cash subsidy for public welfare distributed to the public since the founding of the People's Republic of China, an official from the National Health Commission said during a press conference on Wednesday.

The program will offer families 3,600 yuan ($503) per year for each child under the age of three. The subsidies will be exempt from individual income tax and will not be counted as household or individual income when identifying assistance recipients, such as those receiving subsistence allowances or classified as living in extreme difficulty, according to the Xinhua News Agency.

The central government will establish a transfer payment program under shared fiscal authority titled "childcare subsidy fund," with a preliminary budget of around 90 billion yuan allocated for this year. For funds needed to distribute the national baseline standard subsidy, the central government will provide subsidies to local governments based on a set proportion, covering approximately 90 percent of the total cost, Guo Yang, an official from Department of Social Security at the Ministry of Finance said at the conference on Wednesday.

The national and local childcare subsidy information systems have been completed and are currently undergoing full-process testing. Local authorities are also training grassroots staff. According to the plan, childcare subsidy applications will begin to open gradually in late August, an official said during the conference.

The childcare subsidy is uniformly applied without distinctions based on urban or rural residence, ethnicity, region, or whether the child is a first, second, or third-born. It provides comprehensive support for families under the three-child policy, ensuring that all eligible children receive equal treatment, according to the press conference, CCTV News said.

The program follows the principle of doing what is possible within its scope. As a large developing country still in the primary stage of socialism, China's policy design takes into account both population development trends and the country's socioeconomic development level, said Guo Yanhong, an official from the National Health Commission. 

The subsidy's scope and standards are determined reasonably to ensure the policy is fiscally affordable and sustainable. "Acting within our means is essential to achieving long-term stability and steady progress," she said.

The application process for the childcare subsidy has been streamlined to reduce paperwork, optimize procedures, improve efficiency, and make it more convenient for the public. 

A unified national online application system enables "one-stop" online processing for both registered and migrant populations. While online application is the main channel, offline services are also available, according to the conference, CCTV reported.

Besides, multiple measures have been taken to reduce the costs of childbirth, child-rearing, and education for the public. These include incorporating the expenses of caring for children under the age of three into the special additional deductions for individual income tax and raising the deduction standard to 2,000 yuan per child per month, according to the press conference.

In terms of time support, the maternity leave system has been further improved. Provinces have generally extended maternity leave to 158 days or more. Additionally, around 15 days of paternity leave for spouses and 5 to 20 days of parental leave have been established across the country.

Global Times