Thursday February 29, 2024
Financial Help for Family Caregivers
Caring for an elderly parent can be challenging in many ways, but it can be financially difficult if you must miss work to provide care. Fortunately, there are several government programs and other tips that may help you receive financial assistance while you care for your parent. Here are some options to explore.
All 50 states and the District of Columbia offer self-directed Medicaid services for long-term care. These programs let states approve waivers to allow income-qualified individuals to manage their own long-term home-care services. In some states, that can include hiring a family member to provide care.
Benefits, coverage, eligibility and rules differ from state to state. Program names also vary: "consumer directed care" in one state, may be called "participant-directed services," "in-home supportive services" or "cash and counseling" in another. Contact your state Medicaid program to ask about its options and requirements.
If your parent is a military veteran, there are several VA programs. The eligibility criteria will vary, but these programs provide financial assistance to family caregivers, including:
- Veteran-Directed Care: This program is available in most states and provides a needs-based monthly budget for long-term care services. The veteran manages their own budget and hires their own caregivers, which many include family members. (VA.gov/geriatrics/pages/Veteran-Directed_Care.asp)
- VA Aid & Attendance or Housebound Benefits: This program provides a monthly payment to veterans and their surviving spouses who receive a VA pension and who either need assistance with activities of daily living (i.e., bathing, dressing, going to the bathroom), or are housebound. (VA.gov/pension/aid-attendance-housebound)
- Program of Comprehensive Assistance for Family Caregivers: This program provides a monthly stipend to family members who serve as caregivers for veterans who need assistance with daily living activities resulting from an injury or illness sustained while in the line of duty. (Caregiver.va.gov/support/support_benefits.asp)
Find out if your parent has long-term care insurance that covers in-home care. Long-term care insurance pays primarily for assistance with everyday tasks and does not require a licensed health care professional to provide the services. Some policies will pay benefits for care rendered in an in-home setting. Contact your parent's insurance provider to see if you are eligible to make a claim.
Some additional options for financial support include having your parent pay you for the care you provide if they are financially able to do so. Another option is to have other family members provide help. Check with your family members to see if they would be able to help take care of your parent and allow you to work beyond part-time. Alternatively, your family may be able to pay for your time or other caregivers.
If your family agrees to offer financial support, consider drafting a written contract that details the terms of your work and payment arrangements. A contract sets out everyone's expectations and will also help avoid potential problems should your parent ever need to apply for Medicaid for nursing home care.
There are also tax credits and deductions you may be eligible for as your parent's caregiver. For example, if your parent lives with you and you are paying at least half of your parent's living expenses, and your parent's gross income was less than $4,400 in 2022, not counting Social Security, you can claim your parent as a dependent on your taxes and potentially receive a maximum of $500 as a tax credit.
If you cannot claim your parent as a dependent, you may still be able to get a tax deduction if you are paying more than half of their living expenses including medical and long-term care costs, and those expenses exceed 7.5% of your adjusted gross income. You can include your own medical expenses in calculating the total. To see which medical expenses you can deduct, see IRS Publication 502 at IRS.gov/pub/irs-pdf/p502.pdf.
Furthermore, if you are paying for in-home care or adult day care for your parent to allow you to work, you may qualify for the Dependent Care Tax Credit. Depending on your income, this credit may be worth as much as $1,050. To claim this credit, you will need to fill out IRS Form 2441 (IRS.gov/pub/irs-pdf/f2441.pdf) when you file your federal return.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.