Advertisement
Be prepared for the financial burdens of caring for aging parents by learning about the innovative strategies that could provide relief for your family.
Did you know that 1.8 million Canadians are “sandwiched” between multiple care responsibilities, including looking after their children and aging parents? This shift in caregiving responsibilities from parent to child (especially while having kids of your own) can have significant financial implications for the entire family. In Canada, where healthcare costs continue to rise and the senior population is one of the fastest growing age groups, the burden of caring for an aging parent can be substantial.
Advance Care Planning Awareness Day is April 16. It is meant to instigate conversations between family members and close friends about their wishes. Talk with your loved ones about what would happen if you or they weren’t able to make decisions.
According to a survey conducted by the Petro Canada CareMakers Foundation, the average annual out of pocket expenses of caring for an elderly parent in Canada is $6,000, depending on the level of care needed. This financial burden totals $48 billion a year for Canadians. The costs increase with expenses such as home healthcare services, medications and home renovations.
In addition to the direct financial costs, caring for an aging parent can also have a significant impact on the adult child’s career. Many caregivers must reduce their work hours or leave their jobs entirely to provide the necessary care, resulting in lost income and potential career advancement opportunities. Reducing work hours or having to leave a job to care for a parent causes “63% of caregivers to report experiencing financial hardship connected to their caregiving duties,” according to the National Caregiving Survey. This particularly affects women as more than half of women in Canada are caregivers, which leaves fewer females in the workforce as our population ages. Not to mention the emotional and physical toll of being a caregiver can also be significant. Adult children may find themselves balancing the demands of their own families, work and personal lives with the responsibilities of caring for an aging parent, leading to feelings of stress, guilt and burnout.
Now, it is not all doom and gloom. As the first-born daughter in a large Portuguese family, I have seen caregiving done well and with a few bumps along the way. To help alleviate some of the financial burden on both the parent and the adult child, here are some tips I have learned.
In Canada, there are several government programs and benefits available to support caregivers, such as the Canada caregiver credit and the Home Accessibility Tax Credit (HATC). These programs can help offset some of the costs associated with caring for an aging parent. Let’s explore the credits a bit deeper.
This is a non-refundable tax credit that is available to anyone who has provided care to a spouse, common-law partner or dependant at any time during the year. To clarify, a dependant can be:
According to the Canada Revenue Agency (CRA): “an individual is considered to depend on you for support if they rely on you to regularly and consistently provide them with some or all of the basic necessities of life, such as food, shelter and clothing.”
The amount that can be claimed for the Canada caregiver amount varies depending on your relationship to the person you are making the claim for. Working with an accountant or financial advisor would be the best approach to ensure you are utilizing the right credit amount on your tax return. Additionally, the CRA may request a signed letter from a medical practitioner showing when the impairment began and what the duration of the impairment is expected to be.
This is also a non-refundable tax credit that is available for expenses incurred in 2016 and beyond. Costs can be for work performed or goods acquired in the process of a renovation. The HATC can be claimed by what is called a “qualifying individual” or an “eligible individual.” Let’s explore what these definitions mean:
Your parent can be a “qualifying individual” and claim the credit if they:
Spouses and children can be an “eligible individual” if they:
The rules for what you can and can’t expense do get quite complex, and professional advice is recommended when considering utilizing this credit.
Caring for someone can be a lot of work—emotionally, physically and financially. Caregivers often need a break to recharge. And it’s a good thing to do. Respite care services provide temporary, substitute care for the person in need, allowing caregivers to take time for themselves and own families. This can help prevent burnout and improve the overall quality of care that the caregiver is able to provide.
Families I’ve worked with are surprised to learn that there are community organizations and support groups that offer free or cost-effective assistance to caregivers, such as respite care services and caregiver education programs. Some examples include the Alzheimer’s Society with its art and music day programs, the short-stay program from the Province of Ontario and adult day programs at local hospice facilities. (Check your provincial or territorial government website to see what may be available to you and your family.) By accessing these community organizations and support groups, children can temporarily take a break from their caregiving responsibilities and focus on their own well-being. This can help reduce stress and improve overall quality of life for both the caregivers and their parents.
Also consider the Care Givers as Partners program in Ontario, which can help families learn about the specific needs of the person they are caring for, as well as how to manage stress, navigate the healthcare system, and access support services. Education programs like this one can also connect you with others in your community who are in similar situations. By tapping into these resources, caregivers can receive valuable support and guidance that can help alleviate the financial and emotional stress of caring for an aging parent.
Newsletter
I understand it can be a vulnerable discussion. Advance care planning is a crucial process that allows individuals to make decisions about their future healthcare needs in advance when they are still able to make decisions. It involves personal values, beliefs and preferences with loved ones and care providers.
Advance Care Planning also helps to foster open communication and understanding within the family, creating a supportive and united approach to caregiving. Ultimately, it allows families to provide the best possible care for their aging parent, honouring their wishes and ensuring their comfort and well-being.
By planning ahead and discussing potential care options while being open and honest about anticipated costs and budgets, both parties can work together to find solutions that meet everyone’s needs while minimizing financial strain.
As someone who works in the deathcare industry and has witnessed firsthand the financial strain of caring for aging parents, I urge you to take advantage of the government tax credits available, explore community resources and respite care options, and engage in advance care planning. By proactively seeking out these resources and support systems, you can alleviate some of the financial burden while ensuring the best possible care for your loved ones. Don’t hesitate to reach out to your accountant and financial advisor for help with your specific situation. Your effort to plan for the care of your parents will provide you all with peace of mind in knowing that you are prepared for the challenges that may lie ahead.
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
When Philippe Alberigo spoke to MoneySense in 2014, he’d saved over $100,000 by age 22. He had a goal...
Should you be paid as a power of attorney? Learn about the compensation rules in Ontario and how to...
Inflation is down, wages are up. But the economic recovery has been uneven, with “two contradictory trends” shaping Canadians’...
Parents, here are the CCB payment dates for 2024 and 2025, along with how much you can expect to...
Here’s how Canada’s retirement pension plan works, who’s eligible for CPP, when you can start receiving CPP, and CPP...
Canadians have reporting requirements for foreign assets, income and tax paid. Here’s how to claim each of these on...
If you are struggling with the higher cost of living in Canada and you need more income, you could...
A Certified Financial Planner provides perspective on the TFSA vs. RRSP question for a couple in their late 50s...
Driving for Uber or writing on Fiverr? Here’s what you need to know about filing your taxes.
Did you really mean DEATHCARE INDUSTRY ?? I’ve never heard of this before.