The Resident's Expenses in Assisted Living
The total cost includes several components:
- Deposit erosion: 3–5% per year of the original deposit, linked to the CPI plus VAT, collected over the first 12–16 years of residence.
- Deposit substitute: Monthly payment if the full deposit was not paid.
- Maintenance fees: Monthly payment for facility services, linked to the index and updated periodically.
- Property tax, water, electricity, internet, and phone: Usually paid directly to the relevant authority or the facility.
- Additional paid services: Services beyond basic maintenance.
- VAT on notional interest: Approximately 0.5% per year of the remaining deposit.
Planning Ahead
All expenses should be examined before moving in to ensure the financial arrangement is sustainable long term. Professional legal advice is strongly recommended before signing any agreement.
What is the deposit erosion rate in an Israeli assisted living facility?
The deposit in an Israeli assisted living facility erodes at a rate of 3–5% per year of the original deposit amount, linked to the Consumer Price Index plus VAT. This erosion is collected over the first 12–16 years of residence depending on the facility. After that period, erosion stops and the remaining balance is preserved for the resident or their heirs.
Can maintenance fees in an assisted living facility be negotiated?
Maintenance fees are typically set in the contract and linked to the index, but some elements may be negotiable before signing. Legal review prior to signing helps identify unreasonable clauses and protect the resident's long-term financial interests. It is strongly advisable to have an attorney examine the contract before committing.
