If you’re taking care of an elderly family member, you may be in a precarious position. For many families, care-giving can quickly grow into a heavy financial burden, especially if you’ve had to quit your job to provide care. However, there are a number of government programs, tax breaks and other options that may be able to help you financially. Here are some options to explore.
State assistance: If your elderly relative is low-income, many states have programs that help pay for in-home care services, including paying family members for care. In Oklahoma, the program is called the Consumer Directed Personal Assistance Services and Supports (CD-PASS) service option, and is available only to ADvantage (Medicaid) members is select counties. This option empowers ADvantage recipients and allows him or her to become the employer and hire their own caregiver, which would be compensated by the state. To learn more, call 800-435-4711 or visit okdhs.org.
Veterans benefits: Available to wartime veterans and their spouses, the VA’s Aid and Attendance pension benefit can help pay for in-home care as well as assisted living and nursing home care. This benefit can also be used to pay family caregivers. To be eligible, the person must need assistance with daily living activities like bathing, dressing or going to the bathroom. And their annual income must be under $13,563 as a surviving spouse, $21,107 for a single veteran or $25,022 for a married couple – after medical expenses. The person’s assets must also be less than $80,000 excluding their home and car.
To learn more, go to benefits.va.gov/pension, or contact your regional VA office, or your local veterans service organization. For contact information, call 800-827-1000.
Tax breaks: If you pay at least half of your elderly relative’s yearly expenses, and their gross income is below $3,950 in 2014, not counting Social Security, you can claim your relative as a dependent on your taxes, and reduce your taxable income by $3,950. For more information, see IRS Publication 501, “Exemptions, Standard Deduction, and Filing Information,” at www.irs.gov/pub/irs-pdf/p501.pdf, or call 800-829-3676 and ask for a copy.
If you can’t claim your relative as a dependent, you may still be able to get a tax break if you’re paying at least half their living expenses including their medical and long-term care costs, and what you’re paying exceeds 10 percent (or 7.5 percent if you’re 65 or over) of your adjusted gross income. You can include your own medical expenses in calculating the total. See IRS publication 502, “Medical and Dental Expenses” (www.irs.gov/pub/irs-pdf/p502.pdf) for details.
Long-term care insurance: If your relative has long-term care insurance, check to see if it covers in-home care. Some policies permit family members to be paid, although they may exclude people who live in the same household.
Family funds: If your relative has savings or other assets, discuss the possibility of him or her paying you for the care you provide. If they agree, consult with an elder law attorney about drafting a written contract that details the terms of your work and payment arrangements so that everyone involved knows what to expect. A contract will also help avoid potential problems should your relative ever need to apply for Medicaid for nursing home care.
Other assistance: To look for financial assistance programs your relative or you may be eligible for, visit BenefitsCheckup.org, a free, Web-based service that helps low-income seniors and their families identify federal, state and private benefits programs that can help with prescription drug costs, health care, food, utilities, and other basic needs.