When the Pension Does Not Cover the Care Home Bill

Moving a parent into an EHPAD (établissement d'hébergement pour personnes âgées dépendantes, the French nursing and care home) means finding enough money every month for the accommodation charge and the residual dependency charge, often for several years. A loan is almost never the main source. It works as a bridge while the house is sold or let, while aid is approved or while the children agree how much each will contribute.

The question concerns the future resident and the family equally. Care home fees frequently exceed the pension: the median price of a single room recorded by the CNSA (the national solidarity fund for autonomy) is around €2,000 a month before dependency costs, and noticeably more in the Paris region. The task is therefore to build a budget that holds over time, not just to pay the first month. Families living in the UK, Ireland or North America with a parent in France face the same French rules and need to organise them from a distance.

What an EHPAD bill actually contains

The invoice has three parts. Accommodation (room, meals, activities, upkeep) is always paid by the resident. Dependency is priced according to the GIR group, the French six-level scale of loss of autonomy: the APA (allocation personnalisée d'autonomie, the personal independence allowance) covers part of it, but the resident always pays the equivalent of the GIR 5 and 6 rate. Medical care is funded by the national health insurance and does not appear on the bill.

On top come admission costs that families often forget: a deposit, removal fees, small furniture, name-labelled linen and sometimes laundry charged separately. There is also the overlap period during which the former home still generates property tax, service charges, home insurance and energy contracts until it is sold or let.

Working out the monthly gap: an example

Take Jeanne, 86, widowed and assessed at GIR 3, with a net pension of €1,650. Her home charges €2,400 for accommodation and €190 of residual dependency charge. After housing aid estimated at €150, she is about €790 short each month, close to €9,500 a year. Her house, valued at €210,000, stands empty and unsold.

The tax reduction under Article 199 quindecies of the French General Tax Code narrows the gap: 25 % of accommodation and dependency costs, capped at €10,000 of spending a year, so €2,500 at most. It only helps residents who pay income tax, which rules out many modest pensions such as Jeanne's.

Aid to claim before borrowing a cent

In order: APA for care home residents from the département council; APL or ALS housing aid from the CAF or MSA depending on the home's agreement; then ASH (aide sociale à l'hébergement, social accommodation aid) if the home is approved for it. ASH pays the remaining balance, but it is recoverable from the estate and triggers the maintenance obligation of the children under Article 205 of the Civil Code.

Supplementary pension funds can also help. Agirc-Arrco's advice and referral service explains costs, available aid and the homes in its network, and some funds grant one-off emergency payments. Applying as soon as you start looking for a place avoids borrowing just to cover an administrative delay.

Funding levers compared

When borrowing to pay the home makes sense

Credit is justified in one specific situation: an asset exists but is not yet available. The house is on the market, an assurance-vie surrender is under way, or an estate has not been settled. The loan then pays a few months of fees and is repaid in one go. Borrowing to cover a permanent monthly deficit with no asset behind it only postpones the problem and makes it heavier.

Mortgaging the house while it sells

The broker Solutis describes a mortgage-backed cash loan for care home fees of up to 70 % of the property's market value. For Jeanne's house the theoretical ceiling is over €140,000, whereas €20,000 to €25,000 would cover two years of shortfall plus the move. Notarial fees come to roughly 1 % of the amount borrowed.

An interest-only loan (prêt in fine) suits best: only interest is paid during the loan and the capital is repaid from the sale. If the parent is under guardianship (tutelle), mortgaging their property requires authorisation from the guardianship judge. A child can also borrow in their own name, securing the loan on their own home rather than the parent's.

A lifetime mortgage: capital with no repayments

Available in practice from 60, the prêt viager hypothécaire, governed by Articles L315-1 onwards of the Consumer Code, releases a lump sum repaid on death or sale, with interest rolled up. Foncier Reversimmo still offers it in 2026 through the Banque Populaire and Caisse d'Épargne networks. It suits families who want to keep the house rather than sell it quickly.

Children's contributions and tax

Children can pay part of the bill directly. Sums paid under the maintenance obligation are deductible from their taxable income in France, provided the parent is in need and the amounts are proportionate and documented. A child who is tax resident in the UK or US cannot use that French deduction and should check the rules at home. If a child borrows to help, the bank looks at the child's own debt ratio, generally around 35 % of income.

Building the admission budget step by step

1. Get a detailed quote from the home (accommodation, residual dependency charge, extras) and compare it with the prices published by the CNSA.
2. Apply for APA and housing aid as soon as the admission date is known.
3. Have the property valued and decide between selling, letting, a life annuity sale or keeping it.
4. Calculate the monthly gap, after aid, over at least thirty-six months.
5. Contact the supplementary pension fund and then, if necessary, the département's social aid department.
6. Only then apply for credit, for the right amount, with repayment tied to an identified asset.
7. Have the notaire approve the arrangement whenever a property is mortgaged or a protection order exists.

Common mistakes and reasons for refusal

The most frequent refusal combines age with a lack of security. At 86 a seven-year personal instalment loan is rarely insurable and the bank declines. Offering a mortgage, or having a 55-year-old child take out the loan, changes the analysis entirely. Another classic reason is a file that funds a permanent deficit with no identified source of repayment.

Families often sign the residence contract before costing the shortfall, sell the house in a hurry at a poor price, or overlook the fact that the capital gains exemption on the former main home requires a sale within two years of admission and an income condition. Mixing the parent's and children's accounts also complicates the later estate settlement.

Alternatives to credit for the first months

Several options avoid borrowing. Letting the house provides a regular income. A temporary stay lets the family test the home before selling. A home approved for social aid, or a résidence autonomie (sheltered housing for more independent residents), costs less. Associations linked to a specific illness, and the ONaCVG for veterans and war victims, offer targeted help.

A partial surrender of an assurance-vie is often cheaper than a loan: after eight years, gains benefit from an annual allowance of €4,600 for a single person. For a home that is now empty, a viager libre sale (a life annuity sale with vacant possession) or a vente à terme (sale with the price paid in instalments) brings an immediate sum followed by scheduled payments, without waiting for a cash buyer.

Questions families ask about EHPAD funding

Can we borrow for a parent aged 90? Yes, if you offer solid security, in practice a mortgage on an unencumbered property, and plan repayment from its sale. With no property, the answer is usually a loan taken out by a child on their own income.

Does social accommodation aid force a sale of the house? No. The département can, however, register a legal charge on the beneficiary's property and recover the sums advanced from the estate. Keeping the house is possible, but it will be called upon on death.

Over what period should we plan? Cost at least three years and allow for a move to a heavier GIR level, which raises the dependency charge. A plan covering only a few months often forces a second, rushed round of financing.

Does a child who pays the bill get the tax reduction? No, it belongs to the resident. The child may instead deduct maintenance paid to the parent, within the rules of the maintenance obligation and with receipts.

Is borrower insurance compulsory for a mortgage-backed loan? No law requires it. With a first-ranking mortgage many lenders do without; on death, the heirs repay the capital from the sale proceeds.