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How To Pay For Senior Housing in Canada

How To Pay For Senior Housing

Seniors on basic pensions may have limited options when they are ready to move to seniors housing. Although there are affordable subsidized retirement home rates (extra care costs excluded), most are in high demand with long wait lists. Seniors who want more control over their retirement living options look for private pay retirement homes and use their own funds beyond government pension to pay for senior housing. Either way, paying for senior care requires careful planning and preparation, from using long-term care insurance to reverse mortgages.

Canada Cost

Senior Housing Costs

According to the Canada Mortgage and Housing Corporation's 2013  Seniors' Housing Report, the average monthly cost of a private one bedroom or bachelor unit that includes at least one meal per day was $1,995. The average monthly cost for private pay "heavy care" spaces was $3,477 across all unit types. 

Average Senior Housing Costs in Alberta

The  average rent for an Alberta assisted living unit was $2,798 in 2013, with prices ranging from just over $1,800 for the least expensive bachelor to roughly $4,300 for the most expensive two-bedroom apartment. Heavy care units averaged $3,774 during the same times period. 

Average Senior Housing Costs in British Columbia

Average rent for British Columbia assisted living spaces was $2,747 in 2013, with prices ranging from just under $1,500 for the least expensive bachelor to over $6,000 for the most expensive two-bedroom apartment. Rent for heavy care spaces averaged $5,720. 

Average Senior Housing Costs in Ontario

Average rent for Ontario assisted living units was $3,204 in 2013, with prices ranging from roughly $1,750 for the least expensive bachelor to just over $5,000 for the most expensive two-bedroom apartment. Rent for heavy-care spaces averaged $4,584. 

Ways To Pay For Senior Housing

Private Pay Options

Costs can vary greatly with senior housing depending on factors like unit size, services needed and location of the community.  While many people have planned for senior living care, sometimes they do not realize how much it will cost until they actual start looking.  Fortunately there are many ways to pay for senior housing using your own private sources. Here are a few options to look into when accessing your financial situation:

  1. Income and Savings: Using personal income or savings to pay for assisted living is the simplest route. If a senior is not able to fully cover expenses, family members may contribute part of their income or savings to help pay for care.
  2. Pooling Family Support: A senior who cannot afford assisted living often relies on some financial support from grown children or other family members.
  3. Home Equity:Many seniors are transitioning from a house or other residence that they own. The sale of this real estate can help pay for their care. For those who need assisted living immediately, but aren't able to sell their home right
  4. Selling a Life Insurance Policy: This practice, known as life settlement, involves selling your policy to another person or a company, who pays the premiums from then on, but collects the benefit when you pass away. It's understandable that people would be reluctant to pursue a life settlement, particularly if it negatively affects the financial future of their heirs.

Long-Term Care Insurance

Long-term care insurance (LTCI) helps pay for costs not covered by private medical insurance. This type of plan can help minimize the financial impact of long-term health care needs. In general, long-term care insurance will cover the cost of home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer'sdiseasecare facilities. Most companies will not insure people with preexisting conditions; it's easier to buy LTCI before health issues arise.

Reverse Mortgages

In 1986, Reverse Mortgages were introduced to Canada under the Canadian Home Income Plan (CHIP). In order to qualify for a Reverse Mortgage, you must be 62 or over. If you own your property with a spouse, both of you must be 62 or over.

Government Resources

According to the Canada Mortgage and Housing Corporation's latest Seniors' Housing Report, the average monthly cost of a private one bedroom or bachelor unit that includes at least one meal per day was $1,995 in 2013. The average monthly cost for private pay "heavy care" spaces was $3,477 across all unit types. 

Federal sources of monthly income that can be helpful in paying for care include:

  1. Canadian Pension Plan (CPP): This monthly benefit is available to Canadians beginning at age 65 or at a reduced rate beginning at age 60. As of January 2014, the average monthly amount awarded to new pensioners was $633.46. Eligibility and payment amounts are determined by the contributions you've made over the course of your working life.
  2. Old Age Security (OAS): All Canadian residents age 65 and older who have lived in Canada for at least 10 years after turning 18, are eligible for this benefit, regardless of work history. Payments are calculated based on the length of your residency in Canada. The maximum payment amount as of April 2014 is $551.54.
  3. Guaranteed Income Supplement (GIS): This monthly supplement is available to low-income OAS recipients. As of April 2013, single people with annual incomes of less than $16,729 are eligible to receive a maximum of $740.44*, and couples with combined incomes of less than $22,080 are eligible to receive $495.89 each ($991.78 total.)

In addition to monthly allowances, you may also be eligible for a variety of federal tax credits. To learn more visit Canada's Benefits Finder.

*Source:http://www.servicecanada.gc.ca/eng/services/pensions/oas/gis/index.shtml

Alberta Senior Living Costs and Subsidies

As an Alberta resident, you can take advantage of the following programs to help keep senior care within your budget:

Alberta Seniors Benefit:

The Alberta Seniors Benefit program provides a monthly allowance to those age 65 and older. To qualify, single seniors must have an annual income of $25,800 or less, while married couples must have a combined income of $41,900 or less.

Alberta Health Care Premiums Exemption:

Seniors are exempt from the annual $500 fee for the Alberta Health Care Insurance Plan.

Alberta Blue Cross Coverage for Seniors:

The Alberta Blue Cross Coverage program provides "premium-free Blue Cross coverage for all seniors, their spouses, and eligible dependents, with up to $25,000 in health related benefits per person each year."

To learn whether you are eligible for these and other programs, use this benefits estimator.

British Columbia Senior Living Costs and Subsidies

As a BC resident, you have access to the following financial resources:

Independent Living BC:

The Independent Living BC program is designed to "bridge the gap between home care and residential care for those who need some assistance, but don't need or want 24-hour professional nursing care," this subsidized assisted living program offers more than 4,300 affordable apartments to those in need.

Seniors Supplement:

BC recipients of Old Age Security and the Guaranteed Income Supplement are eligible to receive additional monthly funds through the Seniors Supplement program, which is intended to guarantee a minimum income level for all senior residents.

British Columbia's Ministry of Health also subsidizes roughly a dozen different types of senior care programs. To qualify for services, you can either request a referral from a health care professional you know, or you can contact your local health board, and they will assign you a case manager who will help you complete a needs assessment.

Ontario Senior Living Costs and Subsidies

Low-income Ontario residents may be eligible for the Ontario Guaranteed Annual Income System, which ensures that single seniors have income of at least $1,992, and that married couples have a combined income of at least $3,984 per year.

Manitoba

Residential Charge Calculator - 2013/2014

General Information

Once your healthcare needs have been defined, your after-tax income will be used to determine whether you qualify for financial assistance. For easy reference, here's what you'll be expected to pay for various programs:

Service

What You Pay

Assisted Living

70% of your after tax income

Short-Term Residential Care

$31.90 per day

Family Care Homes

Up to 80% of your after tax income

Group Homes

Costs of living: rent, utilities

Community Nursing

No cost

Community Rehabilitation

No cost

Adult Day Services

Up to $10 per day

Home Support Services

Up to $300 per month

Choice in Supports for Independent Living

Up to $300 per month

Caregiver Respite / Relief

Depends on services

End of Life Care

$31.90 per day

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