Clawbacks, extra charges, and disentitlements related to retirement income | General financial discussion | Discussion forum

Ontario Trillum Drug Benefit - has a complicated formula to determine the deductible applied before the program starts paying for many Rx drugs. The more you make the higher the deductible. For high income earners it becomes a catastrophic plan.

A couple who are both 60 years old and who took full CPP early (thus getting a 70% payout) each making about $8721 per year and have a family deductible of about $290 If they add $10000 each from, say, investment income, the family deductible goes to almost $1200.

These figures are the closest I can come without doing a ton more research to ensure I have all my facts correct.

For interests sake and while I have the spreadsheet open, the same couple with an additional $40,000 each in investment income would have a deductible of about $3900 per year.

So, if someone making that kind of income suffers with, say, MS, and needs a monthly infusion that costs, say $1200 per month then Trillium starts paying after the quarterly deductible is satisfied. I believe in this case the one spouse would need to divide the $3900 in half, and then in quarters to get the quarterly deductible. So, $3900/2=$1950/4=$487.50. The first month's Rx would attract the quarterly deductible and so the person would pay $1200-$487.50=$712.50. The second and third month would be covered. Then the fourth, fifth and sixth months would mimic months one, two and three. The coverage uses the previous years tax return and runs From August 1 through July 31.

This may not be 100% accurate as it has been some time since I helped a friend with his Trillium application. The general details are correct.

GS

These are the long-term care rates in Alberta:
http://alberta.ca/release.cfm?.....55D83611D3
There is also a comparison of different provinces per diem and monthly maximum rates.
Low income seniors get some subsidies from Alberta Seniors Benefits, but I don't know the details.

Do any of you have thoughts on buying long-term care insurance or experience with older relatives using it? I have life (term and whole), disability, critical illlness, home and auto insurance, which adds up to a ridiculous amount a month, but no long-term care insurance at this point. I'm not a big fan of insurance companies in general. It seems they often do all they can to deny claims and limit payouts whenever possible, even though you pay into it all your life.

Kanaka, I read "Your Retirement Income Blueprint" recently and found it chock full of useful information. I believe the author offers consultations via his website as well. I also read one called "Pensionize Your Nest Egg", by Moshe Milevsky in which the author makes a very good case for using annuities as at least part of your retirement financial plan. He really gets into the nitty gritty of the numbers in his analyses of retirement scenarios, for those who don't mind a little math. I also have one by Gordon Pape called "Retirement's Harsh New Realities", which I haven't read yet.
Most of the literature on this topic is from the US and not always relevant to us, so I found it particularly useful to find well-respected Canadian authorities offering Canadian information on this important topic for those of us entering this demographic.

Loonie and others:

Ontario's program is fairly simple, as I understand it. It got a little more complicated one or two rate increases ago.

There were three classes of beds: Private, Semi-Private and Basic. Basic currently costs the resident $1707.59 (from your link) with the province picking up the additional amount the home gets -- roughly $1700, but I cannot easily find my notes on that so let's call it $1700. Semi-private and private are also $1707.59 but each have an additional charge raising them to around $2000 and $2300 per month total that the resident pays. The province still pays their basic amount ($1700).

This all changed with the rate changes effective July 1, 2012 (the rates are adjusted every July 1) with the addition of class designations for semi-private and private beds. Basically, the class is determined by when the home was built or by what facilities the home has. My Mom was in a 35 year old home that was not air conditioned and it was a Class D. Currently "New" or "A" beds take one rate and "B", "C" and "D" beds take another rate and it depends on when the resident moved in as to which fee structure applies. The infrastructure is now there to further fine tune bed costs. BUT, this does not apply to Basic. The co-pay for the resident for Basic is $1707.59.

The Ontario Provincial support works as follows (simplistically - this is not regulation or likely even 100% correct, but it outlines the gist of the program): The resident must be in a Basic accommodation. The resident must have applied for all other benefit programs: CPP, OAS, GIS, other government programs, other private programs. Then all sources of income are added up (those listed previously as well as other income) and if they total less than the $1707.59 monthly basic rate then the resident is eligible for a rate reduction, effectively having the province pay the difference up to $1707.59.

Now, I don't see anywhere in the application where one has to disclose one's net worth. I cannot imagine the province allowing someone to have, say, $100,000 in a bank account, earning $2000 per year at 2% and not using a portion of the principal to pay for their accommodation. But, I can also see someone gifting that to their favourite child or charity to get the province to pay. And one needs enough for a funeral.

My Aunt is currently in a nice 57 bed home constructed some 10 - 15 years ago. It has three wings of 19 beds each. Fifteen of the rooms on each wing are private and two are semi-private. So, if my Aunt's income were to be less than $1707.59 the home would move her to one of the semi-private rooms. But, in reality she would stay where she currently is (private room) as the semi-private rooms are full and there is a waiting list for both private and semi-private.

If a new patient were to be admitted today and their income was less than $1707.59 then they would likely go in a semi-private room unless there were none available.

Greg

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From the Application Form:

To be used only by Residents Applying for Rate Reduction With a Notice of Assessment

As a resident of a LTC home, you are required to pay a co-payment for your accommodation. This requirement is set out in the Long-Term Care Homes Act, 2007 (the Act).

The Rate Reduction Program is intended to provide a reduction in the co-payment amount you are required to pay based on your available income. Only residents residing in basic accommodation may apply for a reduction in the co-payment amount.

Before you can apply for a rate reduction you need to apply for other income support and benefit programs available through the federal, provincial and municipal government.

In order to fairly assess your application for a reduction in the co-payment, otherwise known as a “rate
reduction”, it is important that you report all income available to you.

As a resident applying for rate reduction you may be required to have a Notice of Assessment. You will also be required to report all the income sources available to you.

This supporting document list will help you determine whether you have the required documentation to apply for a rate reduction. The documentation required will be used to assess:

Your eligibility based on whether you have accessed all available income; and

Your rate reduction based on the income available to you.
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