Thanks to advances in medicine and science, the average life expectancy has increased over time. In fact, the global average has more than doubled since 1900, and it is showing no signs of slowing down.
That gives us the invaluable gift of more time with our loved ones. However, it also increases the odds that we will need some form of long-term care as we age.
That’s where home caregiving comes in. While it helps provide comfort in your loved one’s old age, it can also be a significant financial burden. AARP research suggests that family caregivers spend more than $7,200 annually on out-of-pocket care costs.
However, financial assistance may be available to support you as you care for your loved ones. You can find money to help lessen the financial burden without compromising the quality of care you are providing to your loved one.
The Financial Reality of Family Caregiving
While family caregiving often starts with the best of intentions, it can quickly become a financial burden greater than anticipated. Family caregiving usually comes with significant out-of-pocket expenses as you pay for medicine, accommodations, doctors’ appointments, and more.
Family caregiving is often unpaid labor. In fact, many caregivers actually lose money when they care for their loved ones. They usually reduce their work hours, take unpaid leave, or quit their jobs entirely to care for their loved ones properly. Caregivers may drain their savings and rack up debt to cover the cost of care, causing some to even file for bankruptcy.
To help avoid that fate, you must understand what support programs are available to help you care for your loved ones. These programs can reduce financial and emotional stress, allowing you to focus on supporting your family rather than worrying about how you will afford the items you need to care for your loved one properly.
Government Programs Offering Financial Relief
In the United States, several government programs provide financial assistance at the federal and state levels.
For example, some states allow family members to become paid caregivers through their Medicaid program. This can be called a consumer-directed personal assistance program, and the requirements to participate vary from state to state. Contact your local Medicaid office to learn more.
Your Local Area Agency on Aging can help you navigate your options and understand what is available near you. Some federal and state initiatives may provide compensation or tax breaks for eligible caregivers, while others may offer caregiver stipends or reimbursement through local aging agencies.
What is available depends on where you live, so it’s essential to do your research to understand what you may qualify for.
Tax Credits and Deductions for Caregivers
Caregivers may qualify for select tax deductions, including the child and dependent care credit or credit for other dependents. You can also deduct medical expenses to help ease the financial burden. Just make sure to keep all your receipts and documentation, as you will need to provide them for your taxes.
When correctly claimed, family caregiving can reduce your taxable income under IRS guidelines. Explore whether you can claim a dependent parent on your taxes to maximize the available benefits.
Tax credits and deductions can be complex, and financial advisors or tax professionals can help. They will explain eligible deductions or credits, suggest new deductions, and help you organize all your documents in a centralized location.
Writing off eligible caregiving expenses can increase the amount you get back from the government during tax season or reduce the amount you need to pay to them. While you still shoulder the upfront cost, it is a welcome surprise if you can recoup some of it.
Employer Support and Workplace Benefits
Family caregivers can also turn to their employer to see if they have any resources available.
- Leave: Your company may offer paid family leave to give you the time you need to care for your loved ones.
- Flexible Work Arrangements: You can work remotely, flex your hours, or take advantage of other accommodations to help you work more effectively and care for your loved one without compromising your pay.
- Workplace Benefits: Employee Assistance Programs can provide free counselling, referral services, and more. There may also be dependent care accounts you can enroll in on a pre-tax basis to secure funds while lowering your taxable income.
Each employer is different, so you must review your policies and available benefits. You can also connect with your HR department to ask questions and develop accommodations that work for you.
Understanding what policies and resources are available and how you can take advantage of them will help you maintain your income while still providing the necessary medical care to your loved ones.
Grants and Community Assistance Programs
Local Area Agencies on Aging are valuable starting points to help you find caregiver resources. They often have lists of partners tailored to your needs and may be able to point you toward financial and other support.
Two of the most common options for family caregivers are grants and groups.
- Grants: Grants are monetary gifts that you do not have to pay back, and local nonprofit organizations and government agencies may provide funding to help with medical supplies, home modifications, and respite care.
- Groups: Many faith-based organizations and community groups may provide small financial gifts, personal care items, clothing, food, or volunteer support.
Your local community may offer other options, including adult daycares, adult foster care programs, and more. Research local organizations, call your church, or reach out to your local government offices. They can help connect you with local resources you may not have been aware of.
Long-Term Care Insurance as a Financial Lifeline
For eligible individuals, long-term care insurance can be a great option to help cover the cost of care for loved ones, easing the financial burden on family members. Policies can help cover a variety of services, including:
- In-home care
- Adult day care
- Nursing homes
- Assisted living centers
You have options within long-term care insurance policies, providing you and your loved one with control over the type of care they receive while reducing the financial burden. When you pair long-term care insurance coverage with caregiver support programs, you will have a more balanced care strategy that benefits everyone in the long run.
How to Plan Financially as a Caregiver
As you navigate the reality of being a family caregiver, it’s important that you make a strong financial plan.
- Start by creating a written budget. Be sure to include healthcare costs, insurance premiums, and caregiving expenses. You can also include hidden costs, such as higher gas, utility, and grocery prices.
- Meet with a professional. Financial advisors can help you understand whether it is financially feasible for you to care for your loved one without additional support. Long-term care insurance specialists can explain policy options that align with your care needs and savings goals.
- Establish a plan. Early planning reduces stress and helps families maintain their caregiving responsibilities over time. You won’t be surprised by the unplanned financial expenses of home caregiving.
Family caregiving, while rewarding, can also be incredibly stressful, isolating, and expensive. You don’t have to go through it alone, so don’t be afraid to call on professionals or leverage local resources to support you.
Trusted Resources for Family Caregivers
If you’re not sure where to start, consider the following trusted resources.
- The National Alliance for Caregiving provides research and policy advocacy on behalf of caregivers.
- AARP Family Caregiver Support Program offers tips and support for family caregivers.
- Medicaid.gov can provide more information on self-directed or consumer-directed care options.
- Local health department websites will have more information about state-specific benefits.
- Eldercare Locator can help you locate services for older adults and their families.
- Family Caregiver Alliance offers resources to help improve the quality of life for caregivers and their patients.
- The U.S. Department of Veterans Affairs offers services to those supporting veterans.
This is just the beginning of the resources available for family caregivers.
Conclusion
Family caregiving is both gratifying and financially demanding. However, even in the face of the complex reality, many caregivers wouldn’t have it any other way, knowing they can provide support and peace of mind to their loved ones.
Thankfully, you don’t have to do it alone. Using available assistance programs and long-term care insurance plans can help preserve your financial stability. Effective planning helps ensure caregivers receive the support they need without compromising the quality of care their loved ones deserve.
Connect with a long-term care insurance specialist at Lavine LTC Benefits to help understand your options and protect your financial future as you navigate the reality of home caregiving.