Abstract: In order to cope with the aging population, the government issue a series of policies, and the pension service subsidy is of great significance to stimulate the vitality of the pension service market, improve the effective supply of elderly care services and release the potential of pension service consumption. The Chinese government launch different types of subsidy programs, which can be divided into supplier subsidies (S) and demander subsidies (D) according to the subject. Starting from the profit function of pension institutions, institutional income and government financial benefit under different subsidy modes are studied. A simple model is constructed, and the consumers are divided into (1) sensitive consumers and (2) ordinary consumers.

Key words: elderly care service; government subsidies; subsidy research