You’ve made the decision to stay in your home as you age, but you’re concerned as to how you’re going to pay for it. Depending on your needs, home care can get very expensive, so understanding all of your options is critical. We’ll look at public funding that is available, some pre-planning you can do, and possible solutions if you still fall short of your needs.
With Canada’s universal health care, some mistakenly think that they will be adequately covered for home care through public funding. Unfortunately, there are a lot of gaps in the system. No matter how great your smile is, simply flashing your OHIP card will not get you as many visits from a nurse as your needs require. Yet, some coverage does exist. In Ontario, publicly funded home care is currently available through the Community Care Access Centre (CCAC). This includes services such as: personal support (e.g. bathing, getting dressed), nursing, and physiotherapy. A case manager will visit you and conduct an assessment to determine what you are eligible to receive.
This service is run through 14 CCAC centers across the province, and access to care does vary across the centers. Longer waitlists are not the only concern. A recent report found that even after receiving the same score on a standardized questionnaire, patients were given a different number of hours depending on which center catered to them. While the system currently faces many problems, changes are being made. In December 2015, the Health Minister, Eric Hoskins released a paper that discussed a complete overhaul of the program. CCACs are being closed, and their functions transferred to the already in-place Local Health Integration Networks (LHINs). It is not yet clear how much this transition will improve access to services.
Even if CCAC cannot fulfill all of your needs, it is important to contact them in hopes of receiving any possible services. If you receive any care from CCAC, you are exempt from paying HST on all private home care services. Remember this HST exemption is only available to those who are concurrently receiving some service from CCAC, or a similar government organization. For additional information please view this info sheet.
There is help beyond the publicly funded system. VHA Home Healthcare is a charitable organization that can help provide care. Their services are not free, but are offered at a subsidized rate. VON Canada is another not-for-profit that offers select community and home services. You should contact both organizations to determine what these organizations can offer for your needs.
Seniors in need is an organization that lists posts for seniors requesting help. You will only be given a posting if a reputable sponsor submits an application for you. Donors are able to view requests and are connected to the sponsor directly. In order to qualify you must be at least 65, and be unable to fund the necessities of daily living.
You’ve chosen to live in your home because of the comfort and familiarity that a long-term care home cannot provide. While you won’t need to retrofit your home to become a hospital, it is likely that you will need to make improvements to your home. March of Dimes Canada is an organization that funds up to $15,000 for home modifications, and $15,000 every ten years for vehicle modifications. Please note that applicants assessed to have adequate finances need to make a contribution towards modification costs. Those who are at least 65 years of age can also take advantage of the healthy homes renovation tax credit. You can claim up to $10,000 per year on eligible renovations such as non-slip flooring, and receive a 15% refundable tax credit.
Selecting the right caregiver for your aging loved one can be tough. We help families like yours to the right type of care and find the best possible caregiver for your needs. Our highly qualified and compassionate care coordinators can help make the decision easier and answer any questions you have regarding your unique situation. Click here to reach our care coordinators.
After exhausting all available publicly funded programs, it is likely you will face a shortage of care that will need to be addressed. With this in mind, let’s look at the sort of pre-planning you can do to alleviate future stress.
TFSA (Tax-Free Savings Account)
This is a savings account that earns tax-free interest limited by a maximum annual contribution (currently $5,500). Withdrawals are also tax-free.
Long-term Care Insurance
As the name suggests, signing up for this plan requires you to pay premiums to an insurer. If in the future you meet certain conditions as set by the policy, you collect payments to help cover your home care needs.
For a discussion on the advantages and disadvantages of this plan please view this column by Bruce Sellery.
RRSP (Registered Retirement Savings Plan)
Like the TFSA, you make annual contributions within set limits, and receive tax-free interest. At the end of the calendar year that you turn 71, you can no longer make any contributions, and need to transfer the funds to an account such as an RRIF (Registered Retirement Income Fund) to make withdrawals.
IRP (Insured Retirement Plan)
This is another option if you are fortunate enough to have additional income that you want to shelter from tax after maxing out the annual contribution room for your TFSA and RRSP. You would be establishing a life insurance policy and pay premiums to the insurer, and when you retire you would receive a loan against the policy that would be repaid on your death, with the remaining death benefit going to your heirs.
For a discussion on the advantages and disadvantages of this plan please view this column by Kim Thompson.
As the maximum monthly payment for the Canadian Pension Plan is $1,065, it is often wise to join your company’s pension plan if available.
In cases where the pre-planning phase cannot adequately cover expenses, there are other options available. A reverse mortgage will allow you to use the equity in your home while still living in it. You will be given a loan that collects interest without being required to make any payments for as long as you live in the residence. If you decide to move or sell the house, full payment of the loan and interest will be required. The amount you owe can never exceed the value of the house. However, since the loan you receive cannot exceed 55% of the value of your house, it is unlikely that this would happen anyway. Some key requirements to qualify for a reverse mortgage:
- You and your spouse be at least 55 years old (both of you will be covered and subject to all terms of the loan)
- Any loans you currently have that are secured by the house need to be paid off. This can be done with the money you receive from the reverse mortgage.
- Have sufficient equity in the house
Those who strongly desire to leave their homes to the heirs of their estate will be especially reluctant to consider this option. In order to keep the house, your heirs would need to repay the loan and interest. Additionally, even though you have decided to live in your home as you age, circumstances may arise where it becomes necessary for you to move somewhere else. The high interest that these loans charge can significantly raise the loan amount to a point where it could be difficult to pay for new living accommodations with the proceeds of the sale. This risk should be carefully considered.
If you still face a deficit for your costs, you can consider selling belongings that you no longer have a strong attachment to. While this may be difficult, consider that it is unlikely you would be able to keep all of your possessions upon moving to a long-term care or retirement home, which could be necessary if you cannot meet all of your needs at home. You should also consider that you might have family members who have the means and desire to help. Open communication is very important within a family, so do not be afraid to share your concerns, and listen to theirs as well.
Remember to always seek independent financial and/or legal advice when weighing your options to ensure you address your specific needs.
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Selecting the right caregiver for your aging loved one can be tough. We help families like yours to the right type of care and find the best possible caregiver for your needs. Our highly qualified and compassionate care coordinators can help make the decision easier and answer any questions you have regarding your unique situation.