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Using Social Security Benefits to Pay for Assisted Living
Even though you can use your Social Security benefits to pay for assisted living, it’s likely that it may not be enough to cover the costs in their entirety. This means that you may have to rely on other sources of financial help and here’s why.
According to Genworth’s Cost of Care Survey for 2019, the national median cost of assisted living was $4,051 per month or $48,612 per year. Of course, these costs may vary depending on the location of the assisted living facility, the type of services and amenities offered, and the level of luxury offered.
On the other hand, the average Social Security benefit for a retired senior in 2020 is $1,503 per month or $18,036 per year and around $2,045 per month for a couple. Again, the amount of Social Security benefits that you receive may vary depending on your lifetime earnings during your working years and how much you paid in Social Security taxes. It may also depend on how old you’re when you retire. For example, you can get more Social Security benefits if you worked longer.
In essence, the average Social Security benefit that you can get in a month still runs short of the national average costs of assisted living. And even if you were to get the maximum Social Security benefits for a retiree, which is $3,011 per month, this amount is close to the lowest assisted living costs in the country but still not enough.
To put it into perspective, you can use Social Security benefits to pay for assisted living but these benefits cannot be enough to cover the costs of assisted living in full. As such, you may have to supplement the cost of assisted living from other sources of income such as savings, investments, pension, or even other government programs such as Optional State Social Security Supplements.
What are Optional State Supplements (OSS)?
Sometimes referred to as State Supplementary Payments (SSP), Optional State Supplements (OSS) are state-based financial help that are offered on top of the federal Supplemental Security Income (SSI).
In case you’re wondering what SSI is, it’s the federal financial help for seniors with limited income and assets. For one to qualify for SSI, the government will evaluate your income and fill in the gap to bring income up to a pre-established amount.
In short, there are states where seniors living in assisted living facilities can qualify for OSS. These are financial benefits that are generally based on your level of income and may help in paying for room and board costs at the facilities. You have to keep in mind that you can be eligible for OSS benefits if you qualify for SSI benefits. This means that the OSS benefits may be provided on top of the SSI benefits.
Remember, you don’t get the OSS benefits directly as you do with your Social Security benefits or SSI benefits. Instead, the OSS benefits are paid straight to the assisted living facility.
How Does Optional State Supplement Works?
To be very honest, Optional State Social Security Supplements are pretty much complicated and confusing to most of us. Fortunately, you don’t have to understand every nuance related to OSS. Instead, you should simply understand that states can help low-income retirees afford assisted living costs in two ways:
- By paying for assisted living room and board costs through OSS
- By limiting the amount of money that assisted living facilities can charge for room and board
Eligibility for Optional State Supplements
The amounts of money available through OSS benefits as well as the eligibility rules may vary by state, that's if they offer one. Each state sets its own eligibility rules but most states generally base eligibility on an individual’s income. For example, you can be eligible for OSS if your income level is at or below the federal SSI benefit level.
That being said, some states may choose to set the income cut-off higher or lower than the federal SSI level. You also have to keep in mind that some states may choose an entirely different scale when setting income eligibility level or the general eligibility criteria for OSS. To be eligible for the federal SSI benefit for 2019, individuals had to prove that they had a monthly income of less than $771 and $1,000 for a couple.
Of course, you also have to live in an assisted living facility or adult foster care home to be eligible. States have different definitions as to what entails assisted living or adult foster care, so it’s upon you to find out how your state defines assisted living or adult foster care. To make it much easier for you, here is the state by state definitions of assisted living and adult foster care.
How to Apply for Optional State Supplements
Just like eligibility requirements, the administering agencies and application processes for OSS may vary in each state. For example, some states base their eligibility on Medicaid in the sense that you automatically become eligible for SSI and OSS if you’re eligible for Medicaid. Differently, other states may require you to apply directly for OSS.
All in all, here are some of the documents that you must provide for evidence of eligibility.
- Proof of age (must be aged 65 and above)
- Social Security Number
- Proof of income
- Proof of citizenship
- Proof of living arrangements (you must show that you’re living in an assisted living facility or adult foster care facility)
- Work history
Your Location Matters When it comes to OSS
While most states offer OSS some states such as Kansas, Washington, Alabama, and Mississippi do not offer OSS benefits. Some states such as Indiana and Ohio even cap the amount that assisted living facilities can charge for room and board to match the federal SSI benefits. As such, a senior who qualifies for SSI benefits can easily afford to pay for assisted living costs using the SSI benefits.
You, however, have to keep in mind that not all assisted living facilities have to adhere to this cap and can choose to charge as much as they want as long as they do not accept Medicaid. In other words, only assisted living facilities that accept Medicaid are subject to these caps. Again, the caps only apply to room and board costs but not care costs.
As a senior, you should, therefore, keep in mind that you can use various sources of funds including Social Security benefits to pay for assisted living. Well, this is because Social Security benefits alone cannot be enough to cover the costs of assisted living costs in their entirety. As such, taking advantage of government programs such as Supplemental Security Income (SSI) and Optional State Supplements (OSS) can be ideal channels for financing your long-term care. Just make sure that you’re eligible for these programs.