6 Ways to Limit Expenses When Caring for Aging Parents
Written by Silver Sage Magazine
More than 40 million people take care of an aging loved one. More than 42% of caregivers spend an average of almost $7,000 a year of their own money on caregiving expenses.
Here are six of the best ways for reducing your costs as a caregiver to a family member:
- Your Loved One Becomes Your Dependent
As a caregiver, you can claim a dependent as a deduction on your federal taxes if you both meet the IRS requirements. An added bonus for the single taxpayer is that adding a dependent allows you to move you up to ‘head of household,’ even if your relative lives in a separate house. Head of household status means your 2017 personal deduction increases by a whopping $3000.
Want to find out if you qualify? Answer these free and simple questions at the IRS: https://www.irs.gov/faqs/irs-procedures/for-caregivers.
If your loved one requiring care is enrolled in Medicaid, caregivers may be able to get paid through a “waiver” program; which allows people to receive care at home instead of a facility (e.g. hospital, etc.). Program rules differ and name of program (e.g. Self Consumer Directed Care, etc.) differ by states. Contact your state Medicaid program to find out what rules you have: https://www.medicaid.gov/state-resource-center/index.html. Under the waiver program, Medicaid recipients can choose their own home health aide, which can be a family member. (Check state rules.) Typically, the caregiver receives minimum wage; however that amount again, depends on where you live.
The application process can be time-consuming. The person needing care needs a detailed, written plan of exactly what services need to be provided and an estimated budget. The plan must be approved by the state Medicaid office.
- Long-Term Insurance
Private long term insurance coverage can help pay for caregiving services in your own home. Depending on the specific insurance, a policyholder may be able to use a portion of the benefit to hire a family member. But, call your insurer carrier to find out the details of the coverage before you get too excited.
- Veterans Services
The Veterans Administration (VA) offers a program in 28 states, called Veterans Directed Care, for vets who require “nursing home level care” but prefer to get care in their own home. Individuals who have health coverage through the VA may also be eligible for a stipend, which can be used to pay for services such as a personal caregiver.
Rules are strict and documentation is required. Best thing to do is contact your local VA about the program: https://www.acl.gov/programs/veteran-directed-home-and-community-based-services/veteran-directed-home-community-based
- Personal Care Family Agreement
Oftentimes, one sibling may be in a better geographic position to help more than other siblings. In this case, it can be a good idea to come up with a family contract whereby, the caregiving sibling receives something for their time (e.g., money, meals, babysitters for their own children, etc.).
A “personal care family agreement” should spell out details of the plan including: a description of the type of care to be provided, the number of hours a week the sibling will work, and how and how much the sibling will be compensated. It’s always a good idea to run the contract by an elder care attorney: https://www.naela.org/Public/About_NAELA/Public_or_Consumer/Find_an_Elder_Lawyer/Find_an_Elder_Lawyer.aspx.
- Paid Caregiver Leave
Some companies offer paid caregiving leave as a form of FMLA. A few states (Hawaii being the first) are even starting to offer caregiver benefits. And other states (think CA, RI, NJ, NY, DC) now require some employers to offer some level of paid leave for caring for an ailing family member. If you’re not sure about your company or state – ask. The human resource department or your state (https://www.hhs.gov/aging/index.html) aging office should have the answer for you.
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