Will government-backed credit keep seniors home longer?

Recently, the B.C. government revealed that it would be willing to consider backing seniors sitting on properties of large value with a line of credit to help them remain in their homes longer.

The recommendation was in a report recently presented by Seniors Advocate Isobel Mackenzie, who hopes that government-backed credit would keep seniors in their own homes longer, instead of being forced to move into subsidized residential care services, services which ultimately cost the province much more money.

Although Health Minister Terry Lake is intrigued by the idea, he told The Vancouver Sun, “it would require, obviously, detailed analysis in terms of what that would cost, because it certainly would come at a price.” He said that the health, housing and finance ministries would research the issue.

He indicated that he has begun discussing the idea with Housing Minister Rich Coleman and that he thinks “it’s something worth looking at” and that “it lines up well with our priorities.”

The Homeowner Expense Deferral Account would let low- or moderate-income seniors avoid making payments for utilities, home insurance and repairs until either they die or sell their house, at which point the government would get its money back, plus a low-interest charge.

Mackenzie explained that 50 per cent of B.C. seniors live on $24,000 per year or less, which may cover their cost of living, but might not be enough if a major home repair became necessary.

“Major repairs can force a move,” said Mackenzie. “You live in a house that’s worth a million dollars in Vancouver . . . but if you make only $20,000 a year, it doesn’t matter how much the house is worth.”

She also clarified that “the vast majority of seniors do not receive ongoing government-subsidized support for either their housing or daily care.”

Mackenzie believes that a Homeowner Expense Deferral Account could relieve some of the anxiety about such expenses arising by providing $6,000 to $11,000 more in annual income to those who participate.

There is already a similar program, the Property Tax Deferment Program, which charges one-per-cent interest and is now used by 36,581 homeowners over the age of 55. This program cost the government $124 million in 2014. Mackenzie noted, however, that there were no other areas with a homeowner’s program as comprehensive as the one she is proposing.

Although there are lending services currently available to seniors, such as reverse-mortgages, which allow seniors to us their home’s equity to obtain cash that isn’t repaid until they die or sell their home, interest rates charged on these is often substantially higher than prime. Because the government can borrow money at very low rates, it can give seniors better deals on the interest charged on deferrals.

Considering that B.C. has the fastest growth rate for seniors in Canada, it is perhaps time the province examined new ways to make its citizens comfortable as they age. By 2013, it’s expected that seniors will make up one quarter of BC’s residents.

Mackenzie also called for a revision of the rules around the assisted-living sector. Assisted living helps the elderly with relatively minor health issues maintain their independence by providing them with meals and housekeeping services in their own living quarters. If, however, they suffer a setback, even a temporary one, they can now be moved permanently to a nursing home.

Mackenzie believes that as many as 15 per cent more people in residential care could live at home in assisted living or some other form of additional help, and that the cost would be far less. Here report recommends allowing a wider range of seniors to go on assited living, in some cases even allowing for palliative care.

Mackenzie’s report also advises raising the limit on the Shelter Aid for Elderly Renters (SAFER) program so that participants pay no more than 30 per cent of their income on rent, changing the laws for renters and condo owners so that they are allowed to add safety features to their units and to have live-in caregivers, assuring that 95 per cent of residential care beds in BC are single rooms with their own bathrooms and shower by 2025.