Caregiving — Part 3 of 5

Caregiving is expensive. Forty percent of primary caregivers in Canada pay out-of-pocket caregiving expenses of between $100 and $300 a month. And in the U.S. unpaid caregiving has been valued at an estimated $306 billion annually. But caregiving doesn’t just affect your budget in terms of how much you have to spend. It can really take a whack at your income. Twenty–five per cent of caregivers say that caregiving responsibilities have affected their job performance. Another 25 percent have had to quit work, retire, turn down promotions or change jobs. While governments have acknowledged the impact on our wallets, the steps taken have been small.

In 2004 in Canada, Employment Insurance started providing up to six weeks of compassionate care benefits for employees who take time off to care for gravely ill family members with a significant risk of death within 26 weeks (6 months). You can get up to 55 percent of your average insured earnings, to a maximum of $413 per week following a two-week waiting period. However, the benefit is taxable and deductions are taken off the top.
Make sure you claim the Caregiver Amount on your tax return if you provide in home care for parents or grandparents who are 65 before the end of the tax year, who live with you. You can also claim the Caregiver Amount if you’re caring family members between the ages of 18 and 65 who are dependant due to mental or physical infirmity.

In the U.S., Medicare has a resource (link: you can use to learn what you need to know about caregiving issues from checking current coverage to long-term and hospice care issues.

Don’t be surprised when you have to get involved in your parents’ financial lives. As parents’ physical and mental health becomes more of an issue, caregivers often need to step in.

Find out where they bank and where their investments are held, along with the names of their financial advisors. You don’t need to know what’s in the will, just where the will is. If one isn’t already in place, make sure your care-receivers execute a will and powers of attorney so they don’t lose their ability to name a trusted representative to be in control of their financial and medical affairs. Even if you have joint ownership of assets such as a home with your parent, you won’t be able to make changes until someone is appointed to represent your parent’s interest.

Manage the cash flow. Arrange for automatic payment of expenses such as utility and insurance bills and for direct deposit of pension and benefit checks. Set up a joint account with telephone or on-line banking privileges so you can do a quick check to make sure everything in the account is going smoothly (no overdrafts!).

Get Tax-smart. Many health and age-related expenses can be claimed. Know what they are since certain items can only be claimed if prescribed by a medical practitioner (including doctors, naturopaths and dentists).

By 2010, sixty percent of people over 50 will have a parent living so it’s a good bet that you and at least one parent will be retired at the same time. So, how do you deal with the financial crunch of caring for your loved ones just when your income has stagnated? You might want to consider arming yourself with some Long Term Care (LTC) insurance.

LTC provides coverage for people with a prolonged physical illness, disability or cognitive disorder (such as Alzheimer’s disease) who are no longer able to function independently. This can include care at a nursing home, help at home or care at an assisted living facility such as an adult day care center. Without insurance, these services can hit your wallet hard. A year’s stay in a nursing home averages around $36,000. In-home nursing care visits three times a week, two hours a visit, will run to about $9,500 a year.  LTC is meant to defray these costs to avoid depleting your savings.
All LTC policies are not created equal. Some pay benefits to cover a period of stay in a nursing home. Others cover nursing home and home care. Some cover services in adult day care centers or other community facilities. Most companies will not allow the benefits to be used to pay a natural caregiver: your wife, husband or children — anyone related to you; benefits can only be used for professional services. Some companies like Desjardins will not penalize a natural caregiver so that if you must take time off work to look after your dad, his LTC benefits could help you make ends meet while you’re not being paid at work. Shop around!

Benefits are based on an inability to independently perform various activities of daily living (ADLs) including bathing, eating, dressing, toileting, transferring (moving in or out of a chair, wheelchair or bed), and continence. Policies specify an “elimination period,” which can be from 0 to 100 days. Choosing a policy with a zero-day elimination period will cost the most. During the elimination period, you’ll have to pay the cost of care out of your own pocket.

LTC is less expensive the younger and healthier you are. If you have an impairment, you likely won’t get coverage for your lifetime. Assuming you even get coverage, you’ll have to make do with benefits that last somewhere between two and five years. That’s the main reason why you want to buy LTC (or get your parents’ covered) sooner rather than later.

Long-term care policies offer a number of optional provisions such as inflation protection, waiver of premium or discounts when two spouses buy policies at the same time, so shop around.

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