Q: My father, 82, is living independently in his own home but needs help. He has agreed to have someone help in his home, to do some cooking, housekeeping, shopping and laundry. This will cost about $960 per month and his income from his pension and Social Security is only $1500 per month. He will need about an extra $1000 each month to cover his expenses. Is there help available to pay for the attendant so that he can stay at home?
A. There are a number of ways to help pay for help at home. If your father has savings, such as investments, stocks, annuities, IRAs, etc. I would look at using these assets first. When these funds are used up, it is possible your father might qualify for Medi-Cal (if he had to go to a nursing home at some future date), or he might qualify for In-Home Supportive Services (IHSS) when his savings are down to $2,000. Another way to finance help at home would be for you and your siblings to augment your dad’s income, which might be able to make up for the difference. But that may put too large a burden on you.
Finally, if your dad owns his home, he might qualify for a reverse mortgage. Reverse mortgages use the equity in a house to pay cash to the homeowner. The payment can be monthly or can stand as a line of credit or lump sum. This payment is charged interest, like a regular mortgage. Usually one obtains a reverse mortgage from a bank. The homeowner is allowed to live in the home until he or she dies, even if the bank has paid out reverse mortgage money that totals the value of the house. At the time of the owner’s death, when the house is sold, the bank is paid back the money it has given out in the reverse mortgage, plus interest. The estate would get whatever money is left over. This is a wonderful way to be able to afford services when someone is “house rich but cash poor” and can truly help people stay at home.
Financial planning is complicated in situations like this, so it’s best to consult an elderlaw attorney who can help you decide what course of action will be the best for your dad and you, in the present and the future.