Taking Financial Ownership
A young woman and her mother

How to Handle the Cost of Caring for an Elderly Parent

This article was originally published on RATESDOTCA

Your parent or parents have cared for you all your life, but now the roles are reversed, and as their health and mobility deteriorates while they age, you may have taken it upon yourself to care for them.

And while the COVID-19 pandemic may have exacerbated the situation for many families, according to Statistics Canada, about one in four Canadians (7.8 million people) provide care to a family member who has a long-term health condition, disability, or problems related to aging.

With the responsibility of caring for an elderly parent comes many challenges. Being a caregiver is time-consuming, and it can create mental, emotional, and financial stress. And Canadians are worried about money. According to one 2020 survey, it’s the no. 1 cause of stress, with 38% of respondents saying so. Stress can have detrimental impacts on our lives, and 18% of Canadians say they have experienced health problems because of it.

But taking care of your parent means you need to take care of yourself, too. Managing your financial health and taking advantage of tax breaks and government assistance programs can alleviate some of the strain, and keep things balanced without putting your life on hold.

Keep track of your spending and save receipts

Offsetting any expenses you may incur while caring for a senior parent can help lighten the financial load. That requires a little bookkeeping to keep track what you’re spending to care for your elder family member and diligently saving receipts.

Budgeting is a critical first step to strengthening your financial position because it lets you make informed decisions about how you spend. However, some expenses you may pay for out-of-pocket to care for an elderly family member might include prescription drugs, transportation, or home renovations. That’s when applying for non-refundable tax credits can help by reducing your overall tax bill.

Take advantage of tax credits and caregiver benefits

There are a few federal programs available through the Canada Revenue Agency (CRA) that provide tax credits and caregiver benefits worth looking into to see if you may be eligible, including:

  • Medical Expense Tax Credit (METC). This non-refundable tax credit permits you to claim eligible medical expenses such as medical or dental services, therapy, medications, attendant care expenses and nursing home fees.
  • Disability Tax Credit (DTC). The DTC is a non-refundable tax credit designed to help people with disabilities or their caregivers by reducing the amount of income tax they must pay each year. The CRA must approve what’s known as a “Form T2201, Disability Tax Credit Certificate”. A medical practitioner must fill out, describe, and certify that you or your elderly parent has a severe and prolonged impairment to be considered eligible.
  • Home Accessibility Tax Credit (HATC). If you’re making your dwelling more accessible to reduce the risk of harm for seniors, through the HATC you can claim a maximum of $10,000 per year on eligible expenses for a 15% non-refundable credit. For instance, if you renovate your home to include things like grab bars, walk-in bathtubs, or widen doorways for a wheelchair, you may qualify for the HATC. The home must be in Canada, owned or co-owned by you or your elderly parent, and it’s where you or they ordinarily live.
  • Canada Caregiver Credit (CCC). This non-refundable tax credit is for caregivers supporting loved ones who have a physical or mental impairment, and who rely upon you to provide things such as food, shelter, and clothing. The amount you can claim depends on your circumstances.

The CRA provides a complete rundown of what you can claim as an elderly caregiver and how to include those claims on your income tax return.

There may also be provincial programs you can access if your parent needs assistive devices such as a wheelchair or hearing aids. For example, in Ontario, the Assistive Devices Program provides help paying for equipment and supplies for seniors with long-term physical disabilities. It’s worthwhile to look into what similar programs your province or territory has to offer.

Caregivers also need caring

Although caring for an aging parent can be rewarding, caregivers need to take a break now and again. That’s what respite care is. Essentially, when you need time for yourself, respite care ensures your senior family member will receive care at home, during a short stay at a long-term care facility, or through an adult day program.

Each province or territory provides different respite care or related programs that you can apply for, and costs may be covered by your provincial or territorial government:

There are also caregiving benefits available you may qualify for through the federal employment insurance program to care for your elderly parent if they are critically ill, injured, or needing end-of-life support.

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