What is the relationship between a seniors ability to live in the various forms of retirement communities and the access to senior funding?

Questions:

1) What is the relationship between a seniors ability to live in the various forms of retirement communities and the access to senior funding?

2) Is a senior able to live in various forms of retirement communities if they have income plus other income from investments, sale of home, RRSP’s etc.?

3) Would seniors be able to sustain living in a private retirement community if they had no other form of income besides CPP?

Answer:

These three questions are linked, so I’m going to address them together:

A retirement residence is designed for seniors who can live independently or with up to a maximum of 3 hours of support – not heavy care such as intravenous, tube feeding, 2-person transfers of immobile people, etc. Retirement homes are usually privately owned – some of the big Canadian chains are Chartwell, Revera, Delmanor, Amica – and they are licenced to operate by the provincial government’s ministry of health regarding their operations. These include such things as building safety, cleanliness, food management, employee standards and adherence to other rules and guidelines.

A retirement home holds a landlord-tenant relationship with its residents. Suites are rented by the month under a tenancy agreement. The rent includes a rate for the actual suite, then additional costs for support and care such as assistance with showers, dressing, toileting, being escorted to meals, etc. A resident can leave at any time given 60 days of notice. This often happens when a resident comes to require heavier care and needs to move to long-term care, also known as a nursing home.

Potential retirement home residents must complete a basic medical which outlines their overall health, any chronic conditions, medications and support needs. Based on that, they are assessed and accepted as being someone the residence can care for. 

Monthly rental is set entirely by the residence, usually based on 1. the square footage of the suite and 2. the level of support or care the potential resident might need.  For example, a dementia client would require much more care than someone who is fully independent. These costs may range from $2,500 - $6,500 for the suite, depending on its size and location in Canada; additional care is quoted separately and is tax deductible. Care costs are usually priced at about $25 per hour, so 3 hours per day at $25 per hour is about $75 per day or about $2,400 per month. In large cities, a retirement residence can run to $5,500-$9,500 per month.

Canada Pension allowance (CPP) would not be sufficient to cover this type of cost. Most people afford it from their employer pension, savings, investments and the sale of their family home.

Financial assets such as RSP’s, RIFs or investments have nothing whatsoever to do with admission to a retirement home. If you can be accepted medically, and pay your rent, you are accepted as a resident. There are no government subsidies for retirement residence living. 

Governments do subsidize nursing homes. Admission to a nursing home is controlled by the provincial ministry of health. Admission is based on a detailed questionnaire regarding the applicant’s health needs, which are defined as ‘extensive’ or ’24-hour care’. There are choices such as ward, semi-private and private rooms, all with different rates. These rates are set by the provincial ministry of health and are far less than the actual market rate for these services; the government heavily subsidies the cost so that rates are affordable. For example, a private room might have a monthly cost of $2,100; a semi-private $1,900 and a ward room (4 to a room) might be $1,600. These amounts can usually be covered by a person’s Canada Pension allowance (CPP); private savings might be needed for a private room.

Admission to a nursing home is based on medical need only, not assets or income.

 

Pat M. Irwin, BA, AICB, CPCA 
President, ElderCareCanada 
Professor, Distance Learning, Centennial College 
[email protected] 
www.eldercarecanada.ca