Plan for cash-poor ‘interesting,’ Lake says

Province would allow homeowner to pay utilities, repairs only after house sells

The B.C. government is willing to consider offering a government-backed homeowners’ line of credit for house-rich, cashpoor seniors to help them live in their homes longer.

Health Minister Terry Lake said he’s intrigued by a recommendation made Thursday by Seniors Advocate Isobel Mackenzie that such a program would help seniors remain happy and healthy inside their own homes, rather than be forced to move into subsidized residential care services that cost the province much more money.

“It’s an interesting idea,” Lake said in an interview. “But it would require, obviously, detailed analysis in terms of what that would cost, because it certainly would come at a price.”

Government officials in the health, housing and finance ministries will now begin researching the issue, said Lake.

“I have had a brief chat with (Housing Minister Rich) Coleman about it, and I think it’s something worth looking at,” he said. “It lines up well with our priorities.”

The government could not provide an estimate of how much such a deferral program might cost, saying that level of detail has yet to be calculated.

The idea was just one part of a report Mackenzie unveiled to more than 100 observers in a downtown Vancouver ballroom Thursday.

A Homeowner Expense Deferral Account would allow low- or moderate-income seniors to hold off making payments for utilities, home insurance and repairs until their death or the house is sold. That’s when the government could recoup its money — along with a basic low-interest charge.

“It will extend the period of time that their housing is affordable to them,” said Mackenzie.

At issue is that 50 per cent of B.C. seniors live on $24,000 per year or less, she explained.

While many senior homeowners may be able to meet their monthly costs, they fear what would happen if faced with major costs such as a roof replacement or the collapse of a dilapidated deck.

“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 pointed out that, “contrary to the notion held by some, the vast majority of seniors do not receive ongoing governmentsubsidized support for either their housing or daily care.”

The practical effect of a deferral program could be an extra $6,000 to $11,000 in additional annual income to participants, Mackenzie predicts.

B.C. already has a similar Property Tax Deferment Program used by 36,581 homeowners over age 55, the report notes, charging one per cent interest.

But Mackenzie said she did not find any other jurisdictions with a homeowners’ program as sweeping as the one she proposed.

“It really is a valuable tool that a government can give seniors in this province if they allow this to go forward,” Mackenzie told the group.

The property tax deferral program cost the government $124 million in 2014 to defer taxes for 38,000 residents.

Some banks and lending companies already offer reverse-mortgages and other services that allow seniors to get immediate cash using the equity of their home, which is then repaid if they die or the home is resold. But the interest rates charged can be much higher than the prime lending rate. The government can borrow money at considerably lower rates, giving it wiggle room to offer seniors a better deal on interest charged on deferrals.

Lake said his government is increasing efforts to improve home support services and is going so far as to start reallocating money from the acute care system of hospitals and health care centres toward better community care and home support services.

B.C. now has the fastest growth rate for seniors in Canada, expected to account for onequarter of residents at its peak in 2031.

Nearly two-thirds live in Vancouver, Victoria, Abbotsford-Mission and Kelowna.

Mackenzie also suggests that the rules around the rapidly growing assisted-living sector — in which residents with relatively minor health problems live in their own apartments but are offered meals and housekeeping — need revising. That’s because residents are moved into nursing homes — also called residential or long-term care — if their health deteriorates, even temporarily.

She found that Alberta and Ontario were more flexible in their regulations. The report suggests accepting a broader range of health problems in assisted living, including palliative care for the dying.

She estimates that up to 15 per cent of people in residential care — with its higher nursing costs — could be living at home with extra help or in assisted living.

Lake said he doesn’t believe seniors are being prematurely pushed into residential care.

“I think what the seniors advocate is saying is we’re erring too much on the side of risk aversion when we could be, with the right tools, helping people stay in assisted living or their homes longer,” he said.

NDP seniors critic Maurine Karagianis said Mackenzie’s report vividly outlines the housing affordability problems facing seniors, and the government should move quickly to increase the seniors rental subsidy rate.

“It debunks this myth out there that somehow all seniors are living a very luxurious retirement,” said Karagianis.

Karagianis said a government deferral program is a better idea than private lending firms. “Having government back you, you feel there’s more security.”