Clear Deposit Caps and Refund Guarantees: Beijing Six Departments Jointly Issue New Elderly Care Regulations

The Beijing Civil Affairs Bureau and five other departments recently jointly issued the “Beijing Municipal Regulations on Prepaid Management for Elderly Care Institutions” (hereinafter referred to as the “Regulations”). The Regulations focus on three types of prepaid items: service fees, deposits, and membership fees. They clearly specify the maximum charges, fund escrow, and refund guarantees to effectively protect the property rights of the elderly.

It is understood that prepaid charges for elderly care institutions include service fees, deposits, and membership fees. Service fees refer to the charges for beds, services, meals, and other costs collected by the institution from the service recipients or their agents. The Regulations specify that the prepaid service fees must clearly state the relevant charges, basis for charges, standards, and the services or content included. Service fees are generally charged monthly, and the maximum prepaid amount for service fees is limited to three months. Regarding deposits, the Regulations specify that the deposit amount collected by the institution must not exceed four times the monthly service fee standard.

The Regulations do not encourage or promote elderly care institutions to charge membership fees. It is clarified that institutions that are not yet operational or do not meet admission conditions, public and publicly-funded private institutions, as well as institutions with dishonesty records or involved in illegal fundraising, are strictly prohibited from collecting membership fees through forms such as “membership cards” or “VIP cards.” Additionally, institutions that charge membership fees must meet certain conditions: have at least 300 beds, be rated at three stars or above, maintain good credit, and provide bank guarantees or purchase performance insurance.

Regarding fund escrow, the Regulations specify that all service fees, deposits, and membership fees collected by elderly care institutions must be deposited into bank escrow accounts. The institutions should sign tripartite escrow agreements with the local civil affairs department and the escrow bank, opening a dedicated account for prepaid funds. The escrow bank is responsible for categorizing and accounting for service fees, deposits, and membership fees, and conducting daily reconciliation of detailed transaction records and balances.

To address issues such as refund difficulties and institutions “running away,” the Regulations state that if an elderly care institution ceases or suspends operations, it must report and publicize this to the local civil affairs department 30 days in advance. For prepaid fees that meet the refund conditions specified in the service agreement, the institution must refund the remaining amount in one lump sum and cannot refuse or delay the refund. Refund procedures should generally be processed through the original payment channels. The total prepaid amount must not exceed the institution’s fixed assets net worth, and the institution’s service capacity must meet its commitments.

(Reporter Wang Shengdong and Xia Ziya from the China Central Radio and Television Station)