Caring for an ill parent brings many challenges; emotional, logistical, physical and financial.
On the financial front, in spite of our government funded health care system, caring for an ill parent does result in costs that are not covered by provincial health care programs. Some of these costs include:
- Lost wages for time taken to care for your parent
- Private care from a registered nurse or personal support worker (PSW)
- Medication not covered by provincial health care plans
- Medical devices to facilitate quality of life
In this article I outline a range of sources of funds that can help fund some of the costs associated with caring for an ailing parent.
Private Insurance Plans
Your parent may be a member of a private insurance program that funds a portion of some of these expenses. This could be the health benefits that accompany pension plan benefits, or stand alone privately paid for coverage. I have seen children fund health care expenses all the while the parent had insurance coverage that would have paid for some or all of those costs.
Also inquire if your parent purchased Critical Illness, Disability or Long Term Care insurance. They may be eligible for benefits through these plans.
Tax Credits
Attendant Care Credit
If your parent qualifies as disabled and requires the services of an attendant to enable them to function, they may be able to claim some or all of the costs of the attendant. The attendant must be at least 18 and not a spouse. The deduction cannot be claimed where the expenses were claimed for the Medical Expense Tax Credit (explained below).
Disability Tax Credit
This credit is available for disabled persons and is 15% of $7,239 or $1,086 for 2010. The credit can be transferred in certain cases.
Medical Expense Tax Credit
A credit for medical expenses not covered by other sources is available. The amount of the credit is for expenses in excess of the lesser of $2,024 or 3% of the person’s net income in 2010. The credit can be transferred in certain cases. Provincial credits are also available.
Infirm Dependent Credit
Where your parent is dependent on you due to physical or mental infirmity you may be able to claim this credit. The amount of the credit depends on your parent’s net income and is a maximum of $633.45 in 2010 (15% X $4,198). Provincial credits are also available.
Caregiver Tax Credit
This credit is available to taxpayers who are providing in-home care for a relative over the age of 65. The amount of the credit will be related to the dependent’s net income and is a maximum of $633.45 in 2010 (15% X $4,223). Provincial credits are also available.
Government Pensions
If your parent has been a contributor to the CPP during their working lives and are less than age 65 they will probably be eligible for some CPP disability pension. To receive the pension they will need to meet the CPP definition of disability. The maximum current CPP disability pension is just over $1,100 per month and is considered taxable income. Your advisor can assist you in describing the specifics of the program and how an application can be made.
Private Pensions
If your parent was a member of a private pension plan and has not yet started receiving benefits, most pension plans will provide an early pension if they meet the plan definition of disability. The pension sponsor should be approached to determine the specific benefits provided.
Caring for an ill parent is a big responsibility that can at times feel overwhelming. Hopefully this information will help you tap into additional financial resources that will relieve some of the financial burden you and/or your parent may be facing.
Rona Birenbaum is a certified Financial Planner and is licensed to do financial planning. Rona is registered through separate organizations for each purpose and as such, you may be dealing with more than one entity depending on the products purchased. Rona is registered through Caring-for-Clients for financial planning services. This website is not meant as a solicitation for financial advisory services. Financial advisory services are available through the facilities of Queensbury Strategies Inc. Financial Planning is not the business of or under the supervision of Queensbury Strategies Inc. and Queensbury will not be liable or responsible for such activities.