The gradual free preschool education policy is expected to benefit around 12 million pupils for the upcoming autumn term, reducing family expenditure by 20 billion yuan ($2.8 billion), a senior finance official said on Thursday.

Guo Tingting, vice-minister of the Ministry of Finance, said the care and education fee exemption applies to all children in the final year of kindergarten, regardless of urban or rural residence and whether they attend public or private institutions.

The amount waived is based on the government-approved standard fee for public kindergartens; private kindergartens charging fees above local public kindergarten rates may still collect the difference, she said at a news conference held at the State Council Information Office.

For example, if standard public kindergarten care and education fees for certain regions are set at 500 yuan per month and a private kindergarten charges 800 yuan, children in their final year at public kindergartens would pay nothing for the autumn semester, while those at private kindergartens would pay 300 yuan monthly, she added.

Calling it a milestone in preschool education, Guo said the policy has been made by the central authorities to answer people's needs, safeguard and improve their livelihood, promote long-term and balanced population development, ensure education equality and build a birth-friendly society.

The central government and local government will cover the fee waiver together. The central government will cover 80 percent of the costs in western regions, 60 percent in central regions and 50 percent in eastern regions, with local governments paying for the remainder.

Guo said the ministry will closely monitor the implementation of the policy. It will adjust the free preschool education policy with the Ministry of Education based on the changes in kindergarten enrollment and government finances, so it can cover more children, she added.

Xi Zhimiao contributed to the story.