Abstract: Taking the poverty line defined by the state as the standard for social pension benefits, this paper considers to design a non-contributory social pension system for the urban and rural low-income groups, so as to calculate the expenditure scale of China’s social pension. It makes use of the data of future life expectancy issued by the State Statistics Bureau to estimate the burden of the contemporary labor force population with the alternative welfare schemes from the angle of pay-as-you-go. Given the 6.6 percent of GDP per capita as the poverty line, taking into account China’s ongoing plan to delay the retirement age to 65, and assuming that those with formal pensions are not included, it is estimated that 0.7-1 percent of GDP will be used to balance social pension expenditure every year before 2050. However, the expenditure scale of pension could be as much as 4.5 per cent of GDP, thanks to more generous benefits, a lower retirement age and a lower-than-expected birth rate.

Key words: social pension, aging population, expenditure scale