Assisted Living Options for Low-Income Elders | (2023)

Page Reviewed/Updated: Aug. 26, 2022

Assisted living facilities are an excellent option for elderly adults who are no longer able to live alone in their home, but don’t require the around-the-clock care provided in a nursing home. Unfortunately, it can be incredibly challenging for elders and their families to find affordable assisted living. The high cost associated with many assisted living communities can cause a huge financial strain for many people, but especially for those individuals with lower incomes.

Fortunately, various forms of financial assistance to help cover the cost of assisted living are available for those who qualify. But for many individuals, the process of determining which forms of assistance they’re eligible for and exactly what it covers can be a long and confusing process.

While the costs of assisted living and the financial assistance available for low-income elders vary from state to state, there are resources available for seniors across the country. Read on to learn about some options that can help you or your loved pay for assisted living.

Assisted Living Costs

The cost of assisted living varies depending on the facility. The size of the apartment, the location of the community, and the services the resident requires will affect the total cost of living. Monthly rent is also affected by a facility’s services such as food and dining, personal care, housekeeping, and optional activities and amenities like transportation, outings, and classes.

Different assisted living communities charge for rent and additional services in various ways. Depending on the facility, residents will either pay for an all-inclusive living arrangement or pay fees for individual services on an a la carte basis. With all-inclusive pricing, residents pay one fee that includes their rent, their meals, and services such as access to a fitness center, transportation, housekeeping, and any other amenities the facility offers. With a la carte pricing, residents only pay for the services they will use. Which option is more cost-efficient depends on the resident. For those who intend to use the majority of services that a community provides, it’s usually cheaper to pay all-inclusive. But if residents intend to cook their own meals and do their own housekeeping, it may be cheaper to pay per service each month.

According to Genworth Financial, the average monthly cost of assisted living in the United States in 2022 is $4,500. However, the cost can be dramatically different from one place to another, with monthly average costs as high as $6,000 in the Northeast and as low as $3,000 in the Midwest. If residents also need memory care, they can expect to add on an average of $1,200 per month because of the additional staff and resources this type of care requires.

Additional Residential Care Options

Residential Care Homes

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Another possibility for elders is a residential care home, also known as RCFE (residential care facility for the elderly), adult day home, board-and-care home, or personal care home. These small group settings provide basic services (usually meals and light assistance) at a much lower cost than typical assisted living communities or nursing homes.

The smaller, intimate setting may feel more like home than a larger community, which can help make the transition easier for many seniors. These types of residences are usually located in houses within neighborhoods rather than in large complexes. However, the smaller setting means that more advanced care options like memory care aren’t always available, so this choice isn’t fitting for all seniors. Medicaid may also pay some of the cost for residents who meet eligibility requirements.

Assisted Living Conversion Program (ALCP)

Through the Assisted Living Conversion Program, HUD grants funding to owners of multi-family housing developments to convert existing units into affordable apartments for seniors who need the types of support services assisted living provides, but still want to live independently.

The services provided in ALCP facilities must be comparable to the services typically provided in a licensed assisted living facility, such as help with housekeeping, medication, meals, and personal care. According to HUD, these services must be provided through a licensed or certified third-party service provider.

Eligible projects must also qualify as Section 202 or similar subsidized HUD housing, so the units may be more affordable than a typical ALF. This article explains ALCP in detail.

Defining Income Levels

Whether or not a senior qualifies for low-income status will depend on their income as well as their location.

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According to the U.S. Department of Housing and Urban Development (HUD), the low-income limit is “80 percent of the median income for the county in which the person resides.” The median number refers to the midpoint of a range, not the average. So, if income levels for a senior’s county of residence range from, say, $15,000/year to $60,000/year, with $30,000 as the median of this range, a senior who receives $24,000/year (80% of $30,000) would fall into the low-income bracket.

While this definition of low income may still seem quite adequate to someone living at or below the poverty level, HUD makes two additional distinctions. The “very low-income” bracket is no more than 50 percent of the median income (which would be $15,000 in our example), and “extremely low-income” is just 30 percent or less of the median income (which would be $9,000 or under in our example).

When it comes to determining income, remember that the government is considering all income streams, not just the senior’s Social Security check. HUD counts income from pensions, retirement accounts, IRAs, insurance annuities, and assets such as real estate and cars when assessing eligibility.

Financial Assistance Options for Low Income Elders

The following public and private resources can help low-income elders and their families afford the cost of assisted living. Keep in mind that every assisted living community is a little different, so it’s always a good idea to speak with each facility to learn more about their payment options and what forms of assistance they are willing to accept.

Section 202 Program

Low-income seniors over the age of 62 may qualify to live in subsidized housing via HUD’s Section 202 program, which covers both independent and assisted living environments. Established in 1959, Section 202 is the only HUD program that provides housing exclusively for seniors. These properties are often owned by nonprofit organizations.

The rent-assisted housing is designed specifically to enable seniors and individuals with disabilities to live as independently as possible. Communities typically offer a range of services and activities to support seniors. This usually includes dining options, transportation, and housekeeping, but some communities also offer fitness programs, nutrition support, and art therapy.

Although the federal government funds the program, funding is distributed at the state and county levels to nonprofit organizations to build affordable housing for seniors. Along with initial building grants, nonprofit organizations who develop Section 202 housing may receive rental assistance funds to allow them to remain solvent while accepting low rent contribution from residents.

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Anyone who is over the age of 62 and qualifies as very low-income based on HUD standards may apply to live in Section 202 housing. Prospective residents will apply directly through the community or facility that they are interested in. To learn more about Section 202 housing that is available in your area, visit HUD to find your regional center or satellite office.

Veteran’s Benefits

Veterans and spouses of veterans may qualify for aid from the U.S. Department of Veterans Affairs. Although the VA does not pay a veteran’s rent, it may cover some of the services provided by an assisted living facility. Known as Aid and Attendance (A&A), this benefit is a monthly, needs-based payment above and beyond the VA pension that can help cover the costs of long-term care. It is important to note that a veteran or surviving spouse may only receive Aid and Attendance or Housebound benefits (if they are unable to leave their home), not both at once.

As of December 1, 2021, to November 30, 2022, to be financially eligible for A&A:

  • A veteran must have a net worth at or under $138,489. The VA defines “net worth” as the assets and annual income of the vet and his or her spouse.

In order to qualify for A&A benefits, a veteran must meet one of the following criteria:

  • Need assistance with activities of daily living (ADL) such as bathing, dressing, eating, or adjusting prosthetic devices;
  • Be bedridden;
  • Reside in a long-term care facility due to mental or physical incapacity;
  • Have severe visual impairment, with a correction of 5/200 or less in both eyes, or concentric contraction of the visual field to 5 degrees or less.

To apply for A&A benefits, contact your state’s Pension Management Center or visit your local regional benefit office. Since eligibility can vary depending on the state, you should contact your local VA benefits office to find out if your loved one qualifies. In general, you’ll need evidence of need, which typically includes a detailed report from a physician explaining your difficulties completing ADLs. This article explains veterans’ benefits in more detail.

Long-Term Care Insurance

Long-term care insurance, or LTCI, can be tricky. While it appears to be a natural hedge against a future possibility of becoming ill or disabled, long-term care insurance is not a catchall solution.

LTCI premiums can be as steep as the cost of care itself, meaning that there is no real financial advantage to it. Additionally, the type of care that is covered varies depending on the given policy, and some essential components of care aren’t actually covered at all.


For example, a “facility-only” policy covers care in a licensed assisted living facility or in a skilled nursing facility, but not in an unlicensed facility or in your own home. Many policies do not cover the cost of memory care. And, there is usually a “waiting” or “elimination” period before someone is able to access funds. The shorter the elimination period you select, the more expensive the premiums.

In some cases, LTCI providers also require a physical evaluation performed by the physician of their choosing before coverage is awarded. Whether or not the elder qualifies for coverage may depend on whether or not they’re capable of independently performing at least two activities of daily living. So, it’s incredibly important to understand exactly what the policy covers and the total costs associated with it before it’s purchased. You can learn more about LTCI here.


There are several different Medicaid programs that provide financial assistance for assisted living. Home and Community Based Services (HCBS) Waivers and 1915 Waivers are the most common form of this assistance and, as of 2022, are available in 44 states. This coverage is expected to continue expanding until it’s available in every state. While some states are transitioning away from waivers to managed care programs for assisted living coverage, residents of those states will still receive the same level of benefit from the program.

Despite many states providing Medicaid benefits for assisted living across the country, these benefits and the eligibility requirements for them vary greatly from state to state. Some states have strict regulation on the size of the assisted living community while others will only cover personal care. To learn more about what programs are available in your state and how to apply, contact your state’s Medicaid office.

Non-Medicaid State Assistance

Many states across the country have benefit programs available to help elderly individuals cover the cost of assisted living. These programs are quite different from state to state, providing different benefits and having different qualifying standards. In some states, money is provided to the recipient and can be used however they see fit, including paying for assisted living care. Other states have more direct forms of assistance, running their own assisted living communities and providing rooms to qualifying individuals at a price that’s much less than a privately run home.

For more information on programs available in your area and eligibility guidelines, contact your local Area Agency on Aging.

Social Security

Social Security doesn’t directly pay for the cost of assisted living facilities, but individuals and their families can still benefit from it. Beneficiaries are able to use the money they receive to pay for the expense of an assisted living facility. Additionally, if the beneficiary resides in an assisted living facility, many states will increase the monthly amount to help cover the cost. As with other programs, the specific benefits and eligibility guidelines can be vastly different from state to state, so it’s a good idea to get in touch with your local Social Security office.

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Finding Appropriate Housing in Your Area

Of course, your final decision on a facility will depend on more than cost alone. You’ll want to find a community that fits the needs of your loved one in a convenient location that will also keep them happy and fulfilled each day. HUD has compiled an exhaustive multifamily inventory of housing units for the elderly and persons with disabilities. Though not all housing units qualify as assisted living, they are all subsidized HUD housing for seniors and persons with disabilities. You can click the link for your state, and begin to make inquiries at locations that sound promising.


Assisted Living Options for Low-Income Elders | ›

Seniors who reside in an assisted living facility and run out of funds will be evicted. Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.

What happens to senior citizens when they run out of money? ›

Seniors who reside in an assisted living facility and run out of funds will be evicted. Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.

What is the cheapest way for a senior to live? ›

Affordable Housing Options for Older Adults
  • Staying in Your Home. This option is ideal if you do not need comprehensive care for your daily living—or just need some caregiving assistance. ...
  • Living with Family. ...
  • Public and Subsidized Senior Housing. ...
  • Assisted Living and Residential Care Options.

What city is best for low income seniors? ›

Retirees who are living on just their Social Security benefits should look for pleasant places where the cost of living is below the national average. Nice places to retire with a low cost of living include Harlingen, Texas; Pittsburgh; Knoxville, Tennessee; La Crosse, Wisconsin; and Easley, South Carolina.

What happens if elderly person has no one to care for them? ›

When an elderly person has no one to care for them, they could become unable to care for themselves and, at worst, die alone. If they're sent to the hospital or someone notifies authorities, they may be put in an elderly care facility and given medical aid and disability income.

What to do with elderly parent who has no money? ›

– Know what they have and what they owe. Raise funds by selling, moving and/or working. Ask your family, friends, and community for help. Look into and use the many federal, state, and local resources available for low-income seniors.

What is considered low income for seniors in the United States? ›

Over 16.5 million Americans age 65+ are economically insecure—living at or below 200% of the federal poverty level (FPL) ($25,760 per year for a single person in 2021).

How to retire on $1,000 a month? ›

How Does the $1,000-a-Month Rule of Thumb Work? The $1,000-a-month rule states that you'll need at least $240,000 saved for every $1,000 per month you want to have in income during retirement. You withdraw 5% of $240,000 each year, which is $12,000. That gives you $1,000 per month for that year.

Where is the cheapest place to live on Social Security? ›

Iowa. Iowa tops the list for best states to live on just a Social Security check thanks to a number of factors. Overall, the cost of living is about 16% below the national average, while one-bedroom rents are about 30% less than national norms.

How many seniors live only on Social Security? ›

Only a small percentage of older Americans, 6.8 percent, receive income from Social Security, a defined benefit pension, and a defined contribution plan. A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement.

Where do most elderly get their income? ›

Today's older adults typically have a number of sources of income. For most, the primary source of income is Social Security. Other sources are income from investments and other assets, pensions and other retirement plans, earnings from work and, for a small percentage, public assistance programs and veterans benefits.

What state is most senior friendly? ›

1 state to retire in, Virginia has taken the top spot this year, according to personal finance website WalletHub's "2023's Best States to Retire" study. WalletHub evaluated all 50 U.S. states in three key categories: affordability, quality of life and access to health care.

What is the best age for assisted living? ›

Most seniors first enter their programs well after reaching the minimum residency age. In fact, the most common age for new residents falls somewhere between 75 and 84. Still, significant numbers of seniors begin their programs while in their 60s, early 70s, or late 80s.

What is the average cost of assisted living us? ›

According to Genworth Financial, the national median cost of assisted living facilities in 2021 was $4,500 per month, or $54,000 annually, in the United States.

What is the most expensive state for assisted living? ›

New Jersey

What happens to retired people with no money? ›

A lack of retirement savings might mean you need to scale back your lifestyle or downsize your home. Many seniors without adequate retirement funds will need to take a part-time job if they're physically able to.

What happens to elderly with no family? ›

Older adults aging alone may find themselves isolated and are more likely to find it difficult to accomplish daily tasks and increase their risk of cognitive decline, cardiovascular diseases, and early death.

What happens to poor people when they retire? ›

Older people with lower incomes have a number of financial options available to help in retirement. Programs such as Medicare, Social Security, food stamps, Medicaid, and Supplemental Security Income (SSI) are available to those who qualify.


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