The welfare ministry has decided to stop providing assistance to people over 65 years old who own their own homes, including condominiums, with a certain value, and instead extend loans to them with their homes as collateral, sources said Monday.
Under the new program, the maximum loan amount would be set at 70 percent of the estimated value of stand-alone houses and 50 percent of condos, the sources said.
The system, which will apply to those who have homes valued at more than 5 million yen, will be introduced next fiscal year starting in April, the sources said.
The government will collect the loans by selling the collateral after the owners die, as a kind of reverse mortgage, they said.
The central government will bear 75 percent of the loan extension fund and prefectural governments the remaining 25 percent, they said.
Among households with social aid recipients over 65, some 40,000 owned their own homes as of July 1, 2002, according to the ministry.
The new system is expected to reduce welfare costs by several billion yen a year, according to the sources.
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