Where will the money come from?
By Mary Bart
It often takes a “care crisis” for families to recognize what’s needed to look after a parent, spouse or sibling. However, most Canadians have no idea about how much supportive care at home or long term care along with the necessary equipment and supplies might cost.
The majority of us haven’t really thought much about where the money will suddenly come from when we get ill or frail in later life. Yet research shows that it just takes one fall that results in a broken hip, time off for cancer treatment or a dementia diagnosis to cause unexpected financial implications.
It’s been said that, “ funding caregiving is like needing a root canal.” You never plan for it, it’s uncomfortably expensive and sometimes hard to arrange. Caregiving at its core can also turns your relationships and other plans upside down in a flash. So, let’s take a look at a few of the key elements needed to build what I like to refer to as a Sound Care Budget.
Firstly, you need to have details and a good understanding of the current income and expenses that your care recipient has. What monthly income is coming in from pensions, salaries, rental assets etc. and how much tax is usually paid on that income? On the expense side is there a mortgage, loans, car payments, service agreements, insurance policies and property taxes that need to be paid?
Don’t also forget to include costs for current health care and housekeeping providers, medications food, gas, gifts, entertainment, utilities and credit cards. (Visit https://www.nerdwallet.com/article/finance/budget-worksheet for a good spreadsheet that you can use).
Once you have a handle on current incomes and expenses, you can then start to exploring and adding in caregiving options and potential expenses.
Who will care
Perhaps care will be given by a combination of a family member or friend, a day care program, a homecare agency, a privately hired caregiver, a memory care provider, an assisted living or a long-term care facility.
Your can hire someone with experience to do this work for you, ask friends for referrals or contact a variety of organization and care agencies to see what they offer and what they charge for their services. This includes your provincial health plan
Depending on where you live, you may be pleasantly surprised at the care you can arrange for at no charge from the provincial government or shocked by expensive the support your loved one needs is going to be.
Also, you’ll need to get a handle on other care expenses such as:
• Incontinence products,
• Bathroom safety equipment
• Mobility aids (canes/walkers/wheelchairs
• Independent living products
• Specialty foods
• Medications (prescription and over the counter)
• Wound dressings
Look for websites under the home health care category that will help you to identify products and prices for the purposes of your draft budget. The next big question is: How much of it will be covered by the provincial government health plan or a personal medical insurance plan? Or, will you have to pay privately.
Ideally the care recipient has sufficient liquid cash to pay for their care but at times, assets will need to be sold, reverse mortgages secured and tough decisions made. In some cases a care recipient may move in with a family member or a friend or family member will move into the person’s home. Know that one in five (22%) people who are caregivers receive some type of financial support for their efforts.
Regardless, this is not the time for verbal agreements. Ask a lawyer to draft a contract and document everything, including agreed expenses and payments made, shared utilities, rent, food costs etc.
Any employment contract, family or otherwise, should detail the wages, benefits, time off etc. and what services will be provided (for example preparing meals, shopping, bathing, dressing, feeding, medication management, laundry, housekeeping, lawn maintenance, transportation, transfers to a chair or bed, attending medical appointments). This includes paydays, schedules, hours worked, vacation days, re-reimbursing for out-of –pockets expenses and the length of the contract.
Log all hours worked, what tasks were performed and know what even a family caregiver has the responsibility to report their income and pay taxes and other government mandated deductions.
Day to day management
Family caregivers also assume the role bookkeeper, financial and legal planner and are named in
their care recipient’s Power of Attorney (POA) documents. Set up a simple system that can be managed easily and accurately:
Purchase a hand-held filing binder or set up a Google docs file with easy access from your phone or iPad that has pre-defined sections. This will be your “Mobile Office” which may include:
• Health Care and insurance and veterans affairs account numbers
• Medications – past and present costs and where they’re filled
• Medical treatments – past and present and name of health care providers
• Alternate care providers that may require private payment such as naturopaths, RMT’s, chiropractors, osteopaths,
• Banking information and name of key contacts
• Bills paid and due—for household, insurance, automotive, credit or loans
• Out-of-pocket expenses (incurred by you or others)
• Phone numbers & email addresses of medical professionals, family, friends
• Legal documents, such as Power of Attorney
• CRA tax filling slips and previous tax returns
• Calendar for making appointments
Meet with their bank manager and review accounts and consolidate if possible and setting up on-line bill payments options. Keep track of all expenses each week/month. Some prefer to use a dedicated credit card which eliminates the need to keep and log paper receipts.
Hire a tax service to do your loved ones annual personal taxes. This takes the responsibility off of you and you know it will be done correctly.
Let’s now take a look at how 3 families are doing managing their caregiving budgets:
Meet Jane and Stewart: Two of her four adult children, Jane and Stewart have agreed to take responsibility for their Ruth (94) who needs 24/7 care. The family believes that she should remain in her home of 54 years. Jane provides 5 days of live in care and then drives 3 hours to be at home with her own family on the weekends. Stewart lives nearby and moves in to provide 24/7 care for the weekends. The other two siblings have a mountain of reasons (excuses) for why they cannot be help but disagree on a salary for either Jane or Stewart despite the fact that their mother’s assets can more than afford to cover those payments. The problem is that all four siblings never agreed on a payment contract ahead of time. Over the last two years, the fights about compensation have gotten to the point that not even their lawyer and accountant can’t get the matter sorted out. This has torn the family apart and also upset their mother at a fragile time in her life. Bottom line: Get an agreement in writing with family members before care begins.
Meet Prakash and his mom: A 45-year-old man with a young family, Prakash has just learned that his mother has Alzheimer’s disease. She has been happily living in an assisted living facility that’s 4 hours away from him. He hasn’t visited in over a year. Recently he’s learned that his mum just sits in a chair all day and her dementia is progressing quickly. She’ll need to be fed, dressed, bathed, put to bed. In other words 24/7 care, which this facility can’t provide.
Prakash visited and decided to move his Mom closer to him, and into a government run long-term care facility. He’ll use the money his mum was paying for the assistive living facility to hire extra help from a home care agency. Moving her closer and into a long term care facility will save thousands of dollars each month, travel costs to visit her and will not waste money on services she’s no longer using. As Prakash says: “It is so sad to see how my Mother has changed.” Lessons learned: 1. Visited regularly and get updates 2. Expect ongoing changes as health challenges appear.
Meet Sam: Louisa can’t work and needs ongoing support after nasty accident 6 years ago. Sam can only afford to send his sister to a 5-day a week day care program that includes a bus to pick her up and return her each day. This will give same respite and a needed break during the day. Louisa is looking forward to this new plan, especially taking the bus every day. Sam is now investigating the availability of a PSW to help Louisa with meal prep and laundry.
The bottom line
Have care budgeting conversations with your loved ones now so you have time to work together to find ways to budget and pay for care when needed. As the saying goes, “if you fail to plan, you’re planning to fail.”
Mary Bart is the chair of Caregiving Matters, an internet-based charity that offers education and support to family caregivers.
The Canada Caregiver Credit (CCC) is a non-refundable tax credit that may be available to support a spouse or common-law partner, or a dependent with a physical or mental impairment. To learn more, go to: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html
Preventing financial abuse and fraud
Whether the abuser is a caregiver, a family member, friend or stranger money and assets are often stolen or misplaced. Fraud and theft can often start slowly with small amounts so being mindful for the potential for abuse is key. Even within trusting families, it’s good to have a second set of eyes on bank accounts, money spent and necessary paperwork.
Here are a few questions that need to be asked (either to the care recipient or the person named in their POA documents).
Q) What was the financial situation before caregiving began?
Q) Who now manages the money?
Q) Who has signing authority over the bank accounts and assets?
Q) Is this person still trustworthy? Is this still a good relationship?
Q) Are there odd, unusual or new cash withdrawals or credit card charges?
Q) Has the Will or the Power of Attorney document been recently changed or has someone requested changes be made?
Q) Has the family caregiver submitted false receipts for reimbursement?
Q) Has the family caregiver wanted or received reimbursement without any receipts?