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How Do I Pay for Senior Care?

Last updated on: Friday, 5 May 2023
  • What You'll Learn

When figuring out methods to pay for senior care, you must understand how much retirement living could cost, the cost of assisted living, or any other type of independent living option.

Overall, the answer will be different depending on your needs and level of care.

Most senior living aims to make life easier and help seniors live a happy life without the burden of maintaining a home.

However, every senior who considers new living arrangements must find a way to pay for them. Most of this begins with budgeting and comparing your current cost of living to the new cost of living.

Your income sources may vary from the next person. Still, seniors in Canada have access to a few sources of income. Below are some of the options available to Canadian seniors.


Within Canada, most seniors use two fundamental benefits, the Canada Pension Plan and Old Age Security.

These are basic incomes available to pay for a retirement home or residence for any senior.

  • Old Age Security benefits begin when you turn 65, up until April 2023, when the age of availability is supposed to change to 67. This program offers additional supplements like the guaranteed income supplement that provides a monthly non-taxable benefit to Old Age Security pension recipients.
  • The Allowance is an additional benefit over and above the OAS and guaranteed to spouses and common-law partners of Guaranteed Income Supplement recipients. There is also the Allowance for the Survivor, which is a benefit available to people with a low income who live in Canada where a spouse or common-law partner is deceased.

All of this can be applied for if the person meets a variety of criteria.

Seniors can also access the Canada Pension Plan Benefits, which can be applied for and received at the age of 65.

  • The Canada Pension Plan is a monthly benefit for all who have contributed to this over their working lives. The Canada Pension Plan Post-Retirement Benefit is also payable to someone who has paid CPP while receiving CPP benefits. Additionally, there are variants to this plan: The CPP Disability Pension and the CPP Survivor’s Pension.

Many seniors, especially the baby boomer generation, have workplace pension plans privately administered by employers who choose to offer them. However, this is not all too common today unless it is a government position or some type of public service job.

Moreover, most people change jobs frequently throughout their lives. Other than these options, some seniors also have investments, whether in bonds, Guaranteed Investment Certificates, and Dividend Stocks.

Finally, the majority of seniors fall back on continuing income and personal savings.


It is essential as you get older to scrutinize your personal taxes to ensure you are taking advantage of all the tax exemptions and credits for you to qualify.

For example, residents of retirement communities or long-term care facilities can claim the cost of attendant care. Individuals with a disability that affects their ability to perform the functions of everyday life may qualify for a disability tax credit.

There are a number of tax credits for seniors that all seniors in Canada should take advantage of.


According to Statista:

  • The median income for adults aged 55 to 64 has been increasing since 2000 to $42,400.
  • The median income for seniors aged 65 and over has also been increasing, but only to $28,910.

Retiring takes significant planning, which is not always feasible for every person. Many seniors continue to work well into their 70s and even 80s if they are able.

  • According to some investment advisors, you would need to have as much as 70% of your working income for a comfortable retirement.

Additionally, some believe you should save ten times your final salary when you retire. There is also the 4% rule, which is taking 4% of your savings for every year of retirement.

Seniors should begin to calculate their guaranteed retirement income and know how much they need to retire and where they want to retire.

Also, begin by working out your retirement expenses, including:

  • Debt
  • Loan payments
  • Household expenses
  • Mortgage
  • Rent
  • Utilities

It is also recommended to factor in an emergency fund and a realistic entertainment or discretionary spending budget.


Within Canada, jurisdiction over health and health care is a shared responsibility between the federal and provincial governments.

The Canada Health Act defines services that each provincial health insurance program must include in order to qualify for federal funds. Long-term facilities or assisted living fall within provincial jurisdiction.

The Canadian Institute for Health Information provides detailed information regarding privately owned and publicly owned long-term care or assisted living.