Social protection for older people with LTC needs

In 31 out of 32 analysed OECD  countries and subnational regions, the cost of long-term care for individuals with severe needs exceeds the median income, rendering it unaffordable for the majority of the population. For those with low to moderate care needs, the affordability of long-term care improves, but the financial burden remains significant in the absence of public support . The cost of home care is generally higher than the cost of staying in a nursing home for an older person with severe needs. Even when including the costs of board and lodging, in a number of countries, institutional care is so far still an overall less costly way to meet more severe LTC needs in old age.

All OECD countries offer some form of public support for older adults with long-term care needs, but the level of support varies significantly. In 10 countries, public systems cover nearly all costs for older adults with moderate care needs, ensuring comprehensive support. In many other countries, however, public support is more limited. This leaves many individuals to cover a substantial portion of the expenses themselves, with less than 50% of the costs covered by public funding in 11 countries. Typically, the level of public support increases with the severity of the care needs.

For older individuals with severe care needs, out-of-pocket expenses for long-term care at home exceed 50% of median income in half of the 32 OECD countries covered in this analysis. The financial burden is even more significant in institutional settings, where only five countries manage to keep out-of-pocket costs below 50% of the median income. Out-of-pocket expenses are lower for individuals with low or moderate care needs.

The substantial  out-of-pocket costs for long-term care can put individuals at risk of poverty. Across OECD countries, public support reduces this poverty risk among individuals with long-term care needs with varying effectiveness: the share of people at risk of poverty after having received public support still ranges from 0% to 100%. This highlights the considerable heterogeneity in the effectiveness of public systems in alleviating poverty associated with long-term care costs. On average, public support is more effective in reducing poverty for individuals with moderate and severe needs.