By JIM MILLER
(SAVVY SENIOR) Caring for an elder parent can be challenging in many ways, but it can be especially difficult financially if you have to miss work to provide care. A number of government programs and other tips that may be able to help caregivers monetarily while they care for their elderly loved ones.
All 50 states and the District of Columbia offer self-directed Medicaid services for long-term care. These programs let states grant waivers that 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. What’s called “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 or to start the sign-up process.
If an elder is a military veteran, they may be eligible for several different VA programs that provide financial assistance to family caregivers, including the following:
- Veteran-Directed Care: Available in most states, this program provides a needs-based monthly budget for long-term care services.
- Aid & Attendance or Housebound benefits: These programs provide a monthly payment to veterans and survivors 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.
- Program of Comprehensive Assistance for Family Caregivers: This provides a monthly stipend to family members who serve as caregivers for veterans who need assistance with daily living activities because of an injury or illness sustained in the line of duty.
If your elderly loved one has some savings or other assets, discuss the possibility of them paying you for the care you provide, or talk to other family members to see if they can chip in.
If they agree, consider drafting a short-written contract that details the terms of your work and payment arrangements, so everyone involved knows what to expect. A contract will also help avoid potential problems should your loved one ever need to apply for Medicaid for nursing home care.
Also, check to see if your loved one has any long-term care insurance that covers in-home care. If if they do, in some cases those benefits may be used to pay you.
Caregivers may also be eligible for tax credits and deductions as a family caregiver that can help.
For example, if your elder loved one lives with you and you’re paying at least half of their living expenses, and their gross income were less than $4,400 (in 2022) not counting their Social Security, you can claim them as a dependent on your taxes and get a $500 tax credit.
If you can’t claim them as a dependent, you may still be able to get a tax deduction if you’re paying more than half their living expenses, including medical and long-term care costs, and they exceed 7.5 percent 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.
Or, if you’re paying for in-home care or adult day care for your relative, so you can work, you might qualify for the Dependent Care Tax Credit which can be worth as much as $1,050. To claim this credit, you’ll need to fill out IRS Form 2441 when you file your federal return. ISI
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.