Background <p>Focusing on the mental health of older people is of great significance to the implementation of a healthy China.</p> Methods <p>Based on individual-level tracking data from China (CHARLS) in 2013, 2015, 2018, and 2020, a quantitative study was conducted on the implementation of the mutual aid for older people policy and the mental health of older people using the DID double difference model.</p> Results <p>The study demonstrated that the implementation of mutual aid for older people care policies is significantly positively correlated with improvements in older people depression and mental health levels (<i>p&#xa0;</i>&lt;0.01), with an estimated effect size of approximately 3.87%. Heterogeneity analysis revealed that this positive association varied across different groups: the strength of the correlation was higher among older people with disabilities than among healthy older people, and the association was stronger among males than among females.</p> Conclusions <p>The government should strengthen the top-level design of mutual aid-based older people care; At the social level, diverse resources should be connected to build a mutual aid platform for older people care; Community organizations should innovate service models and improve space creation; Family unit should strengthen internal support and improve emotional communication.</p>