I dug into this, it seems unfounded. Raw data on pensions from Hubei:

Q4/19: 1149153
Q1/20: 997332
Q2/20: 1001473
Q3/20: 1138401

(no data from before Q4/19)

Should be skeptical of this report for not mentioning the Q3 data. Those 150.000 people surely did not just revive?
Other data are much more consistent, e.g. provision of dibao (minimum living assistance) in urban areas:

Q4/19: 318383
Q1/20: 314520
Q2/20: 310284
Q3/20: 309229

Still decline, but not as shocking.
Figures on cremations:

Q4/19: 239309
Q1/20: 79342
Q2/20: 136787
Q3/20: 193442

If anything, data shows less cremations during Covid-19 pandemic than more.
Also, RFA's claim that 374.000 cremations took place in 2019 is wrong, this is only for quarters 1-3. If we add quarter 4, this is over 613.000. But we do not have data for Q4 2020, so can't compare YoY.
Overall, the way @RadioFreeAsia presents this data is very sketchy. Highly selective at best, but more realistically just plain misleading and wrong. Article should be rectified.
What can then explain the big gaps around Q1-Q2 in elderly assistance? Most likely just very poor data, it is not difficult to imagine that Wuhan/Hubei authorities did not properly log or share data due to the chaotic nature of the first weeks of the pandemic.
Addendum: I've been digging deeper into the data to see what conclusions can be drawn from it (if any). Pretty much none. But perhaps comparing cremation data for all Q1s is most accurate:

Q1 2018: 66k
Q1 2019: 69k
Q1 2020: 79k

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